May 31, 2006
The debate over which type of word-of-mouth is more damaging continues
First a refresher - the Keller Fay group came out with a study that found that 92% of word of mouth (wom) happens offline and that positive wom outnumbers negative wom 6 to 1. I argued that online negative word of mouth might have a more devastating effect on buying decisions because the buyer is in a more active buying mode when searching for information than when being the recipient of positive wom at a cocktail reception.
Pete Blackshaw wrote a great piece commenting on the same study and concluding that "incidental" word of mouth - which is mostly negative and online - might indeed have a bigger impact on buying decisions than positive offline "intimate" word of mouth. Walter Carl from Northeastern university responds with a call for more research. Interestingly enough, he also lists the primary motivations for people to spread negative WOM - altruism, anxiety-reduction, advice-seeking, and vengeance.
All in all I wonder if the studies take into account that online negative word of mouth repeats itself - so while I may only have left one bad review of Mercedes online, the fact that 5,000 people read it , and that search engines keep sending 20-40 people a day to read it, is the same as if I would have told the story 5,000 times, and still tell it 20-40 times a day.
Consumer generated content (CGC) for an 11 year old boy...
links for 2006-05-31
California rules that the shield laws apply to bloggers as well as traditional media
May 30, 2006
[self promotion] # 11 on list of top marketing blogs - 6 weeks in a row!
This blog has now been on the top 25 list of marketing blogs maintained by the Viral Garden for 6 weeks in a row (standing at #11 for the last two weeks). The list is based on traffic as gathered from Alexa.
Thank you all!
Another interesting conversation leading up to the innovative marketing conference
If you have not heard the transcript of the Skypecast conversation we had with Pete Blackshaw and Max Kalehoff from Nielsen BuzzMetrics and Chris Tolles from Topix on the threats and opportunities of online marketing in the context of consumer generated content - make sure to go to the Corante/Columbia University 2006 Innovative Marketing Conference's home page and download the MP3 file of the conversation from the sidebar.
While there, also make sure you check on the latest list of speakers. It is packed with awesome people who have shaped the field of marketing and are likely to shape the future of marketing.
If you have not signed up yet - make sure you do so - we still have some spots left!
May 26, 2006
Mood brightener anyone?
Here is a product that addresses a real "unmet need" in the marketplace!
May 25, 2006
Participated on another cool podcast - For Immediate Release
David Rogers, the composer and Associate Director for the Center on Global Brand Leadership at the Columbia Business School, and I were interviewed by Shel Holtz and guest co-host Dan York this morning for their For Immediate Release podcast. It was an interesting discussion on how we are trying to start the conversation leading up to the 2006 Innovative Marketing Conference through Skypecasts and how we are also attempting to have the conversation continue after the event.
Let employees search the web for personal reasons!
Letting people do personal stuff at work most likely increases their productivity! Sure, the study says that they spend a little over 3 hours on personal stuff - but whoever still measures productivity in terms of hours is solidly grounded in the Industrial revolution age and doomed for extinction...
May 24, 2006
Join us for a lively Skypecast @ 4pm EST tomorrow!
What are the risks and opportunities of marketing your brand in the context of consumer generated content - think Xanga, Myspace, Topix, or Google News & Yahoo! News.
As you may know by now, and in the weeks leading up to the Innovative Marketing Conference - June 8-9 in NYC - we will be hosting a series of provocative Skypecasts in which we will chat with conference participants as well as allow our audience to shape the conversation at the physical event. In this Skypecast we will sit down with Chris Tolles, Pete Blackshaw & Max Kalehoff for a discussion on the pros and cons of online marketing in the context of consumer generated content. (more info at: skype.corante.com)
Spoof advertising - what do you do when this happens to your brand?
Caption on this one says "Nearly 50% of automobile fatalities are linked to alcohol. 10% of North Americans are alcoholics. A teenager sees 100,000 alcohol ads before reaching the legal drinking age."
Caption on this one is " "Drink provokes the desire but takes away the performance" -William Shakespeare"
And it's not just Absolute...here is another good one from Adbusters
There are some good examples of consumer generated content...
Meeting people's unmet needs through product design...
Tom Guariello over at the Truetalk blog has a funny post on the recent hype surrounding customer listening and meeting their "unmet" needs through design, and how many people, in this case the SVP of Innovation at Pepsico (or her flacks) misuse all this rich terminology - based on a originall rant by Niti Bhan at Perspective.
New study finds no link between ad performance and magazine reader time
A new study by Starch Communications research found that there is no connection between ad effectiveness and reader "engagement" with magazines - i.e., the frequency with which they read the magazine, the total time they spend with the magazine, how much of an issue they finish, etc. (via adage).
This is so counter-intuitive that at first it seems almost impossible. After all, with high engagement comes a whole lot more impressions. That being said, maybe this proves the point that advertising only works on those people who are susceptible to that particular brand message at that particular point in time - either because they have an active need or because some other channel triggered their attention to the brand first.
May 23, 2006
Cheap advertising - or an expensive peep show?
"One million Swarovski crystals were needed in all to cover our breath-taking model with these sparkling little stones, thus creating an erotic overall-artwork.
With each purchased stone you uncover the artwork a little bit more and you help to overcome frontiers and make the earth sparkle!"
So goes the copy on the Million Crystal Body web site - and it goes on with "This way, we create a world-spanning community of people who appreciate high-quality aesthetics."
One Euro gets you one stone removed from the model's body. 50 Euro gets you a banner ad on the site.
Cheap advertising or a really expensive peep show? You can be the judge...
(via MIT Advertising Lab)
More on online vs. offline word of mouth - incidental vs. intimate WOM?
Pete Blackshaw - who also was a panelist at Beyond Blogging 2006 last Friday and got to listen to the same keynote address by Ed Keller which promted my last post - has a different alternative to differentiate between the offline word of mouth and the online word of mouth.
In his post he introduces the "2I Framework" - "Intimate" word of mouth, which happens between people who are familiar with one another, and "incidental" word of mouth, which which has no basis in an existing (or trusted) relationship and which is what happens to the vast majority of web based word of mouth. He too argues that the impact of online, search-based word of mouth may go far beyond the power of offline word of mouth, especially when it consists of negative word of mouth. And when negative comments are online - it does not matter whether they came from an "influential" or an "average Joe!"
Again, I do believe that the fundamental question is to understand what stage of the buying cycle the buyer is in when searching for information online or when looking for recommendations offline. If he or she is in the early stages of the buying cycle while surfing for information online - trying to narrow down the list of potential choices to two or three - then online negative word of mouth would have a dramatic impact on that buying decision, no matter how much offline WOM is happening about a given product. Of course, given the recent Yahoo!/OMD study "the role of online research on offline purchases" results, the answer to that question is not that easy if indeed the shape of the traditional purchase "funnel" changes into a "tumbler!"
Pete brings up another good point - that with the increased amount of artificial WOM happening offline, the "trust" part of the equation with friends and family may erode - resulting in people becoming disproportionally influenced by other consumers.
Hey, it's the "theory of weak links" for WOM!
links for 2006-05-23
It's fun to be in the Top 25 Marketing Blogs for 5 weeks in a row!
May 22, 2006
More and more "edgy" ads released by agency/company
After a version of the Volkswagen Passat ad was released a few weeks ago on YouTube where one of the characters with ego problems says "because mine is only yeah big" instead of the official version where he says "because I am overcompensating for my shortcomings," here comes another example of a vendor/ad agency planting a seemingly unapproved ad version online. This time the Durango ad, banned for TV, has two guys in a bathroom arguing about "Mine's bigger, no, mine is" (and 7 inches makes a difference - via Adrants).
While these are fun to watch, it can be dangerous for companies to release what could be construed as consumer generated ads. Although there is of course a major difference between the two, take the Sony PSP graffiti as an example of one such campaign that backfired.
Most word-of-mouth buzz is positive and travels offline - but don't get rid of your online WOM efforts just yet!
Other findings from the research include:
- Positive mentions outnumber negative mentions 6 to 1
- 92% of brand conversations are happening offline, of which 20% happens over phone
- Only 9% of conversations are "mostly negative"
- People are more likely to pass along good mentions than bad ones - so good news travels faster than bad news!
- 41% of conversations mention advertising
- 72% of opinions about brands are shared by family members and personal friends, 13% are shared by co-workers and 7% are shared by a professional or expert on the topic
- The Internet (12%), television (7%) and newspapers (5%) are the top three media channels most frequently referenced in brand-related buzz
- Email, instant message and online chat rooms/blogs comprise 6% of word of mouth
It would have been interesting to see how this data correlates with people's buying stage. While the study shows that most brand related buzz happens offline, people may be in a more advanced buying stage when looking for brand related information using a search engine than when seeing friends and family at a reception or dinner.
When I asked Ed Keller (CEO of the Keller Fay Group and author of "The Influentials") that question at a recent conference, he said that the study did not look at the correlation between online research and face-to-face brand messaging. While the research shows that 92% of brand related buzz happens offline, it could be that the effect of online word of mouth is disproportionately more impactful on buying decisions. The "buzzer" may be in an advanced buying stage when he or she is talking up a brand offline - but the recipient of the brand message may not be as receptive as if he or she were actively looking for brand related information online.
On that very topic, Yahoo! and OMD released a study last week that shows that 62% of buyers use a combination of online and offline sources to gather information before they buy.
It would also have been interesting to see what kind of brands people talk up in different situations. If it is true that most people identify or talk "through" their brands, then the brands they talk up with friends and family would likely be different than the brands they talk up during company gatherings. In fact, people's need to identify or talk through their brands could explain why so much word of mouth happens offline!
The good news is that offline "positive news travels faster than bad news." We should not forget, however, that online "negative news stays there forever," and that the impact of a bad customer review can have long lasting effects on brand purchases (according to the same Yahoo!/OMD study, 25% of people have posted online product reviews). Take my recent bout with Mercedes - which after much deliberation I decided to blog (also here, here, and here). When I wrote the posts, thousands of readers came to view those posts. But now, almost two months later, search engines are still sending over 20 people a day to read those posts - that is 140 people a week! And every now and then, someone will share their horror stories with that same brand in the comment section, or they will comment on how they would never buy a Mercedes Benz again - or in one case, an independent garage owner who had been servicing Mercedes for 20 years shares his story of how he is switching brands because of poor product quality and horrible customer service. So over time, what started out as an individual product rant has become a collection of (mostly disgruntled) customer reviews - nevertheless, something of a real useful service to potential buyers.
So while 92% of word of mouth may travel offline - don't stop your online word-of-mouth activities just yet - at least not until we understand the true impact on buying behavior!
links for 2006-05-22
hilarious site by condom maker Durex with "dickorations"
Answers to an email interview by the folks at Beyond Blogging 2006
customer service really should be part of the marketing department!
May 21, 2006
Business Week this week has an article on how P&G has mobilized 600,000 moms to chat up its products. Under the umbrella of Vocalpoint, which will take on assignments for P&G as well as other clients, P&G has developed the largest army of word-of-mouth agents yet.
A key requirement to becoming part of the Vocalpoint team of "buzzers" is to have a large social network. Vocalpoint mothers generally speak to 25 to 30 other women during the day, while the average mom talks just to five. In return for spreading the word about new products to friends and family, they get product samples and a sense of empowerment by being given a voice back to the manufacturer for which they are pitching products.
The results? For certain products in special test markets, they found sales to be double that of markets without Vocalpoint!
One of the main potential detractors of the program is that P&G does not require its agents to disclose their affiliation with the marketer - leading some to believe that this could result in "the commercialization of human relations and the undercutting of social trust."
Threats and opportunities of online marketing in the context of consumer generated content
Join us this coming Thursday at 4pm EST for a SKYPEcast discussion on the threats and opportunities of online marketing in the context of consumer generated content to your brand. We will be joined by three great people who will debate this issue prior to our upcoming Marketing Innovation conference in NYC on June 8-9. The participants for this week's discussion include Pete Blackshaw, CMO at Nielsen BuzzMetrics, Max Kalehoff, VP of Marketing at Nielsen BuzzMetrics, and Chris Tolles, CMO at Topix.net.
If you cannot attend, we will be recording the event and posting the discussion replay on the event's home page!
links for 2006-05-21
Great article on how consumers are the medium and the message
May 19, 2006
The new scarcities - should we care?
John Hagel thinks that the new scarcity in marketing is "attention" . Barry Diller thinks that the scarcity is talent. Joe Plummer from the Advertising Research Foundation thinks that the new scarcity is trust. When speaking with Doug Rushkoff, he says that scarcities are something made up by economists and that in the marketing value chain you do not have any scarcities...
What do you think? Should we care?
May 18, 2006
New research on word of mouth marketing
Some interesting findings from the study include:
- 34.7% of study participants stated that they plan to use WOM marketing
- Nearly 64% of all survey respondents noted that WOM is either "very important" or "extremely important" to their overall marketing plans
- Interestingly enough, nearly 59% of respondents said that they had active WOM plans with an active WOM campaign in market
- Nearly 90% (89.9%) of all study participants noted that WOM was ethical
- 80% of organizations reach out to both customers and prospects
The numbers are probably a bit skewed in the positive direction, as a majority of early WOM efforts involve the the launch of a corporate blogging strategy - which fairly often does not result in any real word of mouth activity because of poor implementation.
Another interesting finding, reinforcing the need for companies to integrate their customer service into their overall brand communications strategy, is that 82.2% of respondent said that the "type of service that customers received" is what gets people talking, while 53.3% thought it was "satisfied customers." Contrast that to 35.6% who think that what gets people to talk is "advertising they've seen."
BzzAgents may have proven that you can "manage" the word of mouth channel for simple products - but can you really "manage it" for complex B2B products?
One thing is for sure - if your post-sale customer experience is not a good one, you will get a ton of negative word of mouth, and in this business, the mantra "any news is good news" clearly does not hold true.
May 17, 2006
Sorry, you're from Massachusetts
If I heard that once, I heard it at least a dozen times last week. Can you guess where? No, not New Hampshire. How about Napa Valley, CA. I spent a fabulous week touring both the Napa and Sanoma valleys, sipping some mightly fine wines. I soon discovered that many wineries have a number of reserve bottlings that are available only at their tasting rooms, or through their wine clubs. From a marketing point of view the wine club is a great way to build a loyal community of repeat buyers. They offer limited bottlings of wines that are not available in local retail stores, sell them at a discount from the price charged in the winery retail store, and ship them direct to your home once a month. Sign me up!
If only it was that easy. My first encounter with the curse of Mass. was at Domain Chandon. After sampling their delighful Blanc de Noirs, I asked where I might buy some. I was told I could buy it right there, or join their wine club and have it delivered to my home. So as I filled in those two deadly letters, MA, in the address line of the application form I was told, "I'm sorry, you're from Massachusetts, and we can't ship to your state." In fact, there are 25 other states like MA, and a number of ZIP codes within Florida that prohibit wine shipments direct to your home. For some background on why, and what you can do about it if you think this is really dumb, go here to a site dedicated to help "free the grapes."
As I said, the "I'm sorry, you're from MA" routine followed me everywhere I went. No exceptions. At one winery the person behind the counter said, "you must have a friend in New Hampshire, we can ship there with no problem." If you're not from New England, I should tell you that the motto of New Hampshire, prominently displayed on their licence plates is, "Live Free Or Die." Which seems to apply equally to people and grapes.
Beyond blogging 2006
I am honored to have been invited to participate in the "Beyond Blogging 2006 - The Future of Communications" breakfast round table produced by Fleishman Hillard in DC this upcoming Friday morning. The organizers are really to be commended for how they are using the event blog as a way to initiate the conversation with potential attendees ahead of the actual event and for organizing some activities such as a webcast after the event for people who cannot not make it. So far they have over 600 registrations!
If you can, make sure to stop by - knowing many of the other participants it promises to be an interesting conversation!
Brands and customer service
We had a pretty interesting conversation at the Syndicate conference in NYC yesterday - where the topic was syndication and communities and what happens when your content gets remixed or mutilated in those communities. The panelists included Pete Blackshaw from Nielsen BuzzMetrics, Bill Schreiner from AOL amd Jason Levitt from Yahoo. Josh at Hyku has a recording of the session on his blog (here for MP3).
A particularly interesting point was made by Pete Blackshaw when he said that brands should put their customer service at the center of their brand universe. Customer service is where people give you real feedback about their brand "experiences," and most often when things start going negative, as was the case when Jeff Jarvis started documenting his negative experiences with Dell on his blog - it starts off in the customer service department. In fact, Pete said, "the value of the customer service department may be 10 times as valuable as bean counters account for..."
This is something I could not agree with more, and in fact we have argued this point many times - going as far as recommending that customer service becomes an integral part of the marketing function. You cannot spend dollars on creating demand and making promises to prospective customers and then not deliver. The brand promise and the brand experience needs to be consistent across all customer touch-points - and one of the most crucial touch-points is your customer service department.
Another interesting point was made by someone in the audience - saying that the youth market has no interest in communicating with brands but that they communicate through brands. I am not sure that this is an exclusive youth market characteristic, as I think that most people could care less about the brand outside of how it makes them feel about themselves when using/wearing those brands.
May 14, 2006
links for 2006-05-14
VW Pasat advertising - an unauthorized version with virility used to create virality
May 13, 2006
First Skypecast went flawelessly...
Our first in a series of Skypecasts leading up to our Marketing Innovation Summit in June went flawlessly yesterday. You can listen to the recording of David Rogers, Associate Director for the Center for Global Brand Leadership, interview experiential marketing expert Prof. Bern Schmitt by downloading the Skypecasts' MP3 recording..
Also of interest for the upcoming event is that we will be having a team of bloggers who will blog the event live on a Fast Company marketing BlogJam. Bloggers who will make up the team so far include:
- Shel Holtz from a shel of my former self
- Nevile Hobson from Nevon Chris Carfi from the Social Customer Manifesto
- Renee Hopkins Callahan from IdeaFlow and the Corante Innovation Hub
- Lois Kelly from Foghound (she will also be interviewing PR Guru Larry Weber for an upcoming Skypecast
- John Winsor from Under the Radar Giovanni Rodriguez from the good seed and Future Tense
- David Rogers from the Schmitt Blog
- Paul Gladen from the Chief Innovation Officer
- and Rob O'Regan, former editor in chief of CMO Magazine.
May 11, 2006
Who needs a CMO anyway?
Marketing communications guru Larry Weber may have been one of the first to publicly question the need for a C-level executive in marketing when during his keynote address at the Syndicate Conference last year he said: "Whenever a business category gets messed up, we get a C title. Now marketing is so messed up, we've got CMOs."
Triggered by the recent Spencer Stuart survey, Marc Babej and Tim Pollack (disclosure: both acquaintances/friends and contributors to the Corante Marketing Hub ) tackled the question in dept in their most recent "Unsolicited Advice" column which gets published weekly on Forbes.com.
In their analysis they conclude that the reason that an average CMO's tenure is shorter than that of a CEO's is because their job is ill-defined, and they proceed by making a recommendation for what a CMO's job description should be - "responsible not only for marketing communications but also (sorry to be stepping on toes) for product development and sales."
More specifically, they believe that a CMO's responsibilities should include: ensuring the company's products and services are in tune with customer demand, directing new product development and ensuring the continuing appeal of existing offerings, marketing communications, achieving top-line growth objectives, and meeting corporate margin goals.
While they bring up some great points, some of them deserve some further discussion. First off, let's start with an area of responsibility that was omitted from the list but that arguably should be part of a CMO's responsibilities. A CMO should be responsible for all customer "touch points," and that should include customer service. You can work for years to build an awesome brand, only to squander it after a few months of poor customer service (and following that with poor communications makes the demise event faster - as witnessed by Dell, Kryptonite, Mercedes, etc.). The CMO needs to be held accountable, and have the responsibility, to ensure that the customer experience is consistent across all customer touch points.
This next point may just be a semantic difference, but from a company's products and services point of view, the focus should not be on meeting customer demand but on meeting customer needs - both explicit needs as well as latent needs. Finding the latter and building successful offerings to meet those is an especially tricky proposition, but one which if done properly, often results in disruptive, breakthrough, and market-creating product innovations. Customers will not tell you, nor could they, how you should build such products. You "invent" them first and then find ways turn the latent market needs into active active needs.
Having a CMO responsible for product development instead of product definition and product marketing may not be such a good idea either. The product definition process is a process that should be driven by the CMO's product management team in partnership with the technical/product development team. But once a product is defined, including cost targets and time-to-market targets, the product development process itself should be run by a dedicated and independent product development executive, not the CMO. In fact, having the CMO in charge of product development may result in more "me-too" products, not more competitively differentiated products. Another unintended consequence of having the CMO run the development show, especially true in high tech and if the CMO is also in charge of sales, may be an abundance of one-off product versions/special editions built specifically to satisfy end-of quarter requirements. Such situations eventually lead to costing a company millions of dollars in wasted upgrade and migration resources, not to speak about the fact that it can also severely limit a company's ability to innovate in the future.
While CMOs should be held accountable for achieving top-line growth objectives and corporate margin goals, hopefully that is an accountability that they share with the rest of the executive team.
May 10, 2006
How to avoid burnout...
It basically comes down to doing the same thing that will ensure ongoing creativity, imagination and ultimately innovation - make sure you take breaks, and make sure you talk to others about things that are not related to what you're currently working on!
May 9, 2006
CMOs get a lot of lip service in the executive suite
According to Advertising Age, a survey released by Spencer Stuart yesterday finds that CEOs are falling short in working with marketing.
While 85% of the 278 executives who were surveyed said that it was either "extremely critical" or "very critical" for CEOs to communicate with marketing, only slightly more than half found that happening in practice. In fact, only 18% said that CEOs were excellent at at that! The survey also found that CEOs are not very good at holding other executives accountable for ensuring that they partner with marketing.
Often times, it is the CMO who sets the direction for the company, and when that happens with little support from the CEO or the rest of the executive team, you get what's happening at many companies...they look rather rudderless.
May 8, 2006
Series of Skypecasts leading up to the marketing conference
In the weeks leading up to the 2006 Innovative Marketing Conference - June 8-9 in NYC - we will be hosting a series of provocative Skypecasts in which we will chat with conference participants as well as allow our audience to help shape the conversation at the physical event.
These should be fun...make sure you attend! We will announce more of them in the near future.
Google competitors in search advertising still have a long way to go
It's not a secret that Yahoo, Microsoft and a slew of other smaller players are trying to play catchup with Google in selling ads on web searches as well as on content-specific sites - in fact Business Week dedicated a pretty good article to it last week (requires subscription).
We have been a user of Google AdWords for awhile and recently started playing with Yahoo's solution as well as with other solutions from smaller players.
The solutions from the smaller players were generating a lot of traffic, but we found a lot of the traffic to be garbage - coming from sites that do not even have content. That is especially the case when you enable foreign sites to carry your text/link ads.
While Yahoo has a powerful UI, it is not very intuitive. But perhaps the biggest issue with Yahoo's solution is it's human interface - the editors who are setting up things for you and who are approving or denying your ads. When you set up an account you fork over $150 for someone to help you set up an account. Not only does that process take 3 days, in our case everything was set up wrong. We wanted to advertise our upcoming Marketing Innovation event, but instead all the ads were set up to promote Corante as a place to find information about technology and science events. After trying to get them to fix it for a week, and after pre-paying another $475, we decided to toss out most of the original ads and recreate new ones ourselves. Of course, that takes up to 3 days to get approved by their editorial staff. Since this is a conference, and since a lot of people go to conferences to network, we thought that advertising the conference in the context of marketing job searches would make sense. The editorial staff did not think so and rejected all the job based keywords because of the word "job".
Now what is the value of having editorial control over the keywords? Having editorial control over content is understandable, but if someone wants to sell diapers or wipes in the context of searches for Mercedes, who cares?
May 5, 2006
Social networking sites draw tremendous traffic
According to Comscore, and as of March 2006, 23% of US Internet traffic visit Myspace...(see earlier post for some more stats on MySpace)
(via software only)
Why is live at work so different?
A friend of mine, a brilliant programmer, a published fiction writer, and a successful solo entrepreneur, who had never worked in corporate America in his 20 year carreer, took his first salaried job 6 weeks ago.
Earlier this week, he called me for carreer advise - telling me that he felt like he had landed in Dilbert cartoon. "People don't "do" things, they sit around for weeks talking "about" what to do", he said, "and they use all these made-up words that do not even exist in the English Language, I am going crazy!"
My advise was to get out, which he did an hour later.
Why is it that live at work is so different from anything else around us? People behave differently than they do in their social networks. Is it due to human nature or organizational nature?
Hopefully changes are underway in that area...
May 4, 2006
May 3, 2006
Can word of mouth marketing be considered a "new" media "channel"?
Dave Baltar, the CEO of BzzAgent, along with the BzzAgent Director of strategy led a pretty interesting workshop on how to run a word of mouth (WOM) marketing campaign at Ad:Tech last week.
First let's look at some of the numbers that were bandied around - as some of them were quite interesting:
- 2/3 of the US economy is influenced by WOM - this is according to a McKinsey report
- 15% of all conversations contain a reference to a product - based on a recent Northeastern University research paper
- 40% of all WOM episodes include a reference to other media - according to their own research
- 80% of consumers trust WOM recommendations more than any other source - according to a Forrester report
This is all very much in-line with the research done by Everett Rogers on Diffusion of Innovation - some of which was first reported in the 60's and 70's
At BzzAgent, they now have close to 160,000 BzzAgents - volunteers who engage in conversations with friends, family, and acquaintances and make word of mouth recommendations for products in the context what happens naturally in their environment. In trying to develop and manage WOM as a real media channel, BzzAgent tries very hard not to turn their evangelists into "sales" people. In fact, the principles they adhere to include - no scripting, 100% volunteer, double opt-in, allow both positive and negative WOM, and ensure disclosure.
While WOM is not a "new" media channel, but one that has been in existence for as long as social networks have existed, if you look at BzzAgents' rate card, it looks like they have been able to turn WOM into a manageable and predictable media channel - and that maybe something new. For $65K they will deploy a 1,000 agents, which will generate 47,375 conversations over the period of 12 weeks. If you've got a little over $2M to spare, they will deploy 75,000 agents who will generate 3,553,125 conversations in a 12 week period.
If this is all working, and all indications are that it is, then there may be another hidden "lesson learned" here - one that companies should apply to their traditional sales force - have them be less scripted, and freer to improvise and create real dialogues with their prospects instead of delivering sales pitches. But that is not "new" either - David Weinberger and his co-authors of the Cluetrain Manifesto have been saying that for over a decade..
links for 2006-05-03
Why is the mainstream media ignoring Colbert?
BBC set of programs on how to measure happiness
contextual advertising for video
May 2, 2006
NY ad agency files suit against blogger for pointing out problems...
[UPDATE 05/05: The case was dismissed - see Unconditional Surrender by NY Ad Adency on the Media Blogger Association Web site]
After critiquing and pointing out that new ads from the Tourism Department for the State of Maine had a phone-sex number listed on them instead of the actual tourism office number, Lance Dutson from the Maine Web Report, found himself sued for millions of dollars by the ad agency who created the ads in the first place - Warren Kremer Paino Advertising .
The story was picked up by the Boston Globe and a variety of other traditional media outlets as well as many blogs. Thankfully, many sharp legal minds with great track records in defending similar cases have come to Lance's help.
As for the Ad Agency - they are getting some interesting Google search results at this point - which will likely not improve in the next few years!
(via Jaffe Juice)
Hypergrowth at MySpace - but with some trouble monetizing traffic through advertising
Shawn Gold, the VP of Content and Marketing at MySpace, gave an update on the MySpace business at Ad:Tech in San Francisco last week .
The numbers which he used to describe his business were absolutely staggering. Get this - every day they add 250K new users to the system, get between 15-20M logins, download 30M songs, and add 11M people to other peoples' friends lists! Oh, and they serve up 1B page-views every single day...
All that being said, and according to a recent New York Times article (requires subscription - via Don Dodge), MySpace, like many other social networking sites, is having trouble monetizing those 1B daily page-views. The culprits for this situation are manifold - it is hard to "target" ads on consumer-generated pages like the ones found on MySpace, advertisers are sometimes reluctant to have their brands associated with content which may sometimes be of questionable taste, and according to Google, when you add the inventory of consumer-generated sites like MySpace and YouTube to the overall online advertising inventory, you get a situation where supply outstrips demand.
One of the creative ways in which MySpace is trying to attract advertisers is by letting advertisers like Wendy or Best Buy create profiles on MySpace - much like users would - and then have MySpace members sign up as friends of the vendors. Wendy's Old Fashioned Hamburgers was able to sign up 100,000 "friends" that way - that's right 100K members!!!!
[shameless plug] If you are interested in this topic we will be having a session on the threats and opportunities of online marketing on brands at our upcoming Marketing Innovation Conference.
links for 2006-05-02
Stephen Colbert making fun of the president while looking him in the eye!
It is an honor to be listed in the top 25 marketing blogs!
May 1, 2006
Corante Marketing Innovation Event off to a great start!
Awhile back I mentioned our upcoming Marketing Innovation Event which will be held on June 8-9th in NYC, and which is produced in partnership with the Center on Global Brand Leadership and the Columbia Business School.
The first day - our CMO Summit - is reserved for CMOs and VPs of Marketing only - and will consist of a series of highly interactive discussions around the some of the fundamentals of marketing. The second day - our Marketer's Forum - which is open to the public will feature cutting edge thinkers and business leaders who will present new models for innovative marketing and lessons from companies that are leading the way towards a new marketing foundation.
So far we have assembled a really nice lineup of both attendees as well as speakers. One of the nice achievements so far has been our ability to assemble marketers from a wide variety of industries - including representatives from consumer packaged goods, high tech, automotive, travel, financial services, and the pharmaceutical industry. Combine that with a few international registrations and you end up with a mix that should really lead to innovative discussions.
There are a few great partnerships that we are about to announce, which would give the conference a dimensions that would go beyond the physical event - stay tuned for that! And if you'd like to register, visit our registration by clicking on the registration button in the sidebar!
We also launched a new weekly Marketing & Innovation Digest. I have added a subscription box for the email digest to the sidebar of this site, as I believe that the content will interest people that read this blog. It is also an easy way to stay up to speed on the latest developments of the upcoming conference.
You really do get what you pay for!
Other fascinating research by Stanford Professor Baba Shiv includes this study which essentially finds that discounts can actually change consumer behavior - not just buying behavior.
So say that you are buying a drug at a 25% discount - you could actually end up having less effect from using the discounted drug then if you would have bought the drug at full price! So not only do we associate a lower price with lower quality - which result in specific expectations about a product - we actually activate these expectations, which then translate into self-fulfilling prophecies that actually impact our behavior.
The same study found that advertising has the same effect. If a drug is promoted as being very efficient, then the effect of using the drug will be better than if it were not advertised that way. The implications of this finding are actually far reaching - as they affect overall consumer health.
Appealing to a buyer's primitive emotions
In the current issue of Business 2.0 (not yet online), Andy Raskin writes about interesting consumer behavior studies done by Stanford Professor Baba Shiv.
The research found that if you can keep someones cognitive side of the brain busy while they are making a "buying decision," they are much more likely to use their emotional impulses to make that buying decision. One of the tests used to demonstrate this fact involved two groups of people who were told that they would participate in a memory study. One group was asked to memorize a seven digit number while the other was asked to memorize a two digit number. Just before they were prompted to recall the numbers, they were presented with either a scrumptious piece of chocolate cake or a fruit salad. The group that had been asked to memorize a seven digit number was 50% more likely to choose the chocolate cake rather than the fruit salad. What happened was that the cognitive side of the brain - that part that can decide that "cake is bad for you" - was busy, leaving the more primitive side of the brain - where emotions like desire and fear reside - to make the decision.
Related research by the same Professor Shiv found that reminding people of their own mortality had the same effect.
The bottom line is that people do not behave like the rational subjects looking to fulfil their basic "needs" which economists use in their models.