Word-of-Mouth Marketing 101 Peter Storck SVP, Business Intelligence, House Party WOMMA/MRA Webinar Series January, 2011
Jan 12, 2015
Word-of-Mouth Marketing 101
Peter Storck
SVP, Business Intelligence, House Party
WOMMA/MRA Webinar Series
January, 2011
WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption
WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption
WOM & WOMM
• WOM:
– Consumers providing info to
each other
– Intuitively, the best advertising
– Only recently harnessed
• WOMM:
– Giving people a reason to talk
– Making it easier for them
WOM & WOMM
• Can‟t
– Create or script WOM
• Can
– Make consumers happier
– Listen to them
– Leverage their desire to be first
– Facilitate sharing
– Inform influentials
– Activate advocates
– Recognize the power of both good
and bad WOM
WOM Can’t Be Faked• Fake WOMM
– Unethical
– Backfires
• Legitimate WOMM
– Respects consumers‟ intelligence
– Authentic, transparent, honest
• WOM
– Self-policing
– Pushes marketers to satisfy
Only honest marketers with confidence in
their products should practice WOMM
Elements of WOMM
• Educating people
• Studying how/where/when opinions are shared
• Indentifying influencers
• Harnessing peoples‟ desire to be insiders
• Providing tools for easy sharing
• Listening and responding to supporters,
detractors, neutrals
Digital Social Media …
• A subset of WOMM
– less than 2%
• 90% of consumer
conversations about
brands occur offline(Keller Fay)
WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption
Types of WOMM
• Buzz
• Viral
• Community
• Grassroots
• Evangelist
• Product
• Influencer
• Cause
• Conversation Creation
• Brand Blogging
• Referral Programs
• Co-Creation
FORD FIESTA MOVEMENT
Managed by Undercurrent
Gave 100 social media enthusiasts
a Fiesta for 6 months prior to release
Asked to create a mission each month, and
share in social media
Meals on Wheels, alligator adventures,
elope
Generated:
6.5 million YouTube views
500,000+ Flickr views
3 million+ Twitter impressions
50,000 opt-ins, 97% non Ford-owners
Seeded, and Sold 10,000 Fiestas in first six
days
Product SeedingProviding samples to influential consumers
11
CHILI’S BAR AND GRILL
Managed by Zuberance
Identified biggest brand advocates by email,
Facebook, Twitter and site surveys
Engaged 125,000 advocates, who:
Posted 75,000 reviews, 40,000 on Yelp
Generated 9 million influence impressions
Shared 110,000 free appetizer offers, yielding
50,000 new opt-ins
Chili‟s was able to:
Energize and reward loyalists
Get referrals to their friends
Referral ProgramsCreating tools that enable satisfied customers to refer their friends
12
OLD SPICE
Managed by Wieden + Kennedy
Ran funny commercial with “Old Spice Guy”
that then went viral on YouTube (over 28
million views)
Followed-up with hundreds of Old Spice Guy
videos in just 2-3 days, responding to fans‟
Twitter questions in near real-time
Generated 135,000,000 views
Sales of Old Spice body wash increased
107% the following month
Went viral, multiplying their reach at little cost
This is not easy
Viral MarketingCreating messages designed to be passed along, often electronically
13
OBAMA PRESIDENTIAL CAMPAIGN
Led by Chris Hughes, a co-founder of
Created the highly interactive,
my.barackobama.com:
User Dashboard
Social network
Event listings
Blogs & Forums
Calls to action
Grassroots MarketingOrganizing volunteers to engage in personal or local outreach
14
Site generated:
2 million profiles
200,000 offline events
400,000 blog posts
35,000 volunteer groups
Campaign generated:
120,000,000 YouTube views
5,000,000 Facebook fans
1,000,000 text subscribers
Brought organizing volunteers to a
whole new level
BURGER KING’S WHOPPER SACRIFICE
Managed by Crispin Porter + Bogusky
Offered a free Whopper coupon to
customers willing to de-friend 10 people
on Facebook
23,000 coupons distributed
Generated redemptions, but little
engagement/conversation, questionable
loyalty
Did catch attention, and appeal to some
Conversation CreationInitiating catchy ads, emails, promotions, etc. designed to start WOM
15
RED BULL STASH
Managed by Archrival
Hid thousands of Red Bull Energy Shot
stashes across the US; posted clues on
Encouraged stories and photo uploads to the
site
Invited finders into the “Final Stash,” a virtual
scavenger hunt offering a trip to NYC
Generated a surge in Facebook activity,
widespread sampling, online and offline buzz
Created high profile event, got people talking
Buzz MarketingUsing high-profile entertainment or news to get people talking
16
THE TRAVEL CHANNEL
Managed by Room 214
Indentified and monitored key advocates and
influencers in the blogosphere
Established active presences Facebook, Twitter,
Digg, StumbleUpon, more
Encouraged key influencers to start and join
conversations
Generated and tracked over 15,000 conversations 6
months, 80% favorable
Reached over 200,000 online community members
Engaged influencers, built community
Influencer MarketingEngaging opinion leaders and communities with your brand
17
DELL
Managed by Mr. Youth
Identified 2 brand advocates each on
college campuses across the US
Provided a Dell computer
and $1-2,000 to execute a marketing plan
Approved but self-designed
Campus-specific
Indigenous
Purchase-consideration rose from 14% to
27% on activated campuses
Non-activated flat
Harnessed evangelists, drove toward
purchase
Evangelist MarketingCultivating advocates to spread the word on your behalf
18
PHILOSOPHY
Managed by Bazaarvoice
Launched a blog in advance of Mother‟s Day
for consumers to upload and vote on stories
of their mothers‟ philosophies
Drove engagement with a $1,200 shopping
spree to the story with most votes
“Stories” blog made up 39% of traffic that
month
Its visitors generated:
81% more page-views
20% higher average order value
19% more items per order
Built blog, and they came
Brand BloggingBlogging and participating in the blogosphere
19
RANDOM HOUSE
Managed by Affinitive
Launched Random Buzzers, an online book
community for teens:
Connect with one another
Co-create projects
Engage with Random House authors
Write and share reviews
Read exclusive book excerpts
Over 60,000 members, with:
17,500 photos
4,000 reviews
5,600 comments
50,200 forum posts
Built community, and they came
Community MarketingForming or supporting communities; providing tools and content
20
PEPSI REFRESH
In lieu of Super Bowl spending in 2010, invited
consumers to suggest causes for funding
Funded causes with most votes
Donated at least $1 million a month
Gave another $1.3 million for ideas to clean Gulf oil
As of December 2010
Over 61 million votes cast
$14.6 million donated for 352 ideas, including
improvements to parks, playgrounds and schools
Returning to Super Bowl
Continuing „Refresh‟
Did good, rose in esteem
Cause MarketingSupporting social causes to earn respect and support
21
DORITOS CRASH THE SUPER BOWL CONTEST
Ran contest for consumers to create 2010
Super Bowl commercials
Third year in a row
Drove 4000 entries with prizes for top (4) vote-
getters:
Trip to Super Bowl
$25,000
Airing of spot
Up to $2 million if spot ranks in top 3
One placed first in 2009
Invited creative, multiplied attention to ads
Co-Creation MarketingInvolving consumers in marketing and creative
22
FEBREZE SET & REFRESH HOUSE PARTIES
Managed by House Party
Recruited target hosts for 6,000 parties, one with
Sandra Lee
Gave hosts microsites for piloting parties
Sent party packs with samples and branded favors
Generated over 500,000 hours of brand exposure ($9
eCPM-30‟s), among 7 million conversation partners
Drove large lifts:
Familiarity: 34 points
Favorability: 60 points
Purchase-Intent: 57 points
Recommendation-Intent: 58 points
Harnessed influencers & evangelists, co-created, etc.
In-Home MarketingEvangelist, Co-Creation, Influencer, Product Seeding, Referral, Buzz ...
24
WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption
Unethical WOMM
• Stealth
– Deceiving people about the involvement of marketers
• Shilling
– Paying people to advocate without disclosing it
• Infiltration
– Taking over a forum under false pretenses
• Comment Spam
– Using automation („bots) to post on blogs
• Defacement
– Vandalizing property to promote a product
• Spam
– Sending bulk messages without clear permission
• Falsification
– Knowingly disseminating false information
Botched WOM
A Food Brand
Greenpeace criticized brand‟s
environmental practices in
YouTube video
Brand forced YouTube to
remove it
Consumers trashed the brand
on Facebook and Twitter
Brand responded with anger,
sarcasm, de-friending
Brand caused more damage
than video would have if left
alone
WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption
Spend Bringing Accountability
• Data collected online and off
• Generational reach
• Respected 3rd Parties
• Increasingly precise, reliable, standardized
– WOMMA‟s role
– Focused on ends, not means
• Enabling cross-media comparison
– Reach (CPM-Impressions)
– Engagement (CPM-30‟s)
– Awareness & Attitudes (Costs Per)
– Action (Costs Per)
WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption
Study After Study Builds the Case
• 90% of consumers trust product recommendations
from friends (Nielsen)
• 61% of conversations about products impact
likelihood to buy (Keller Fay Group)
• Customers acquired through WOM monetize 3-5
times more (Hill/Wharton, et al)
• WOM customers have nearly twice the long-term
value (Villanueva/ U of Navara, et al)
• Many more
WOM Drives FavorabilityFavorability of a Software Product
Among House Party Participants vs. Control, at 6 and 12 Months After:
57% to 67% Higher
G0 6M n=1270, Panel 6M n=661, G1 6M n=75, G0 12M n=965, Panel 12M n=319, G1 12M n=102.
Favorability: Please indicate how favorable or unfavorable your impression is of the following product
ChatThreads, Proprietary and Confidential
92.7% 93.7%89.3%
89.2%
55.5% 56.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
6M 12M
G0 G1 Panel
WOM Drives Media Receptivity
G0 6M n=1270, Panel 6M n=661, G1 6M n=75, G0 12M n=965, Panel 12M n=319, G1 12M n=102.
82.0%79.0%
69.0%
78.0%
50.0% 49.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
6M 12M
G0 G1 Panel
Aided Ad Recall among Participants and Control, at 6 and 12 months:
38% to 64% Higher
Which of the following features of [the product], if any, does [the brand] mention in its TV advertising?
Check all that apply.
WOM Drives Purchase
62.4%
68.2%
52.0%
59.4%
20.1%
27.9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
6M 12M
G0 G1 Panel
G0 6M n=1270, Panel 6M n=661, G1 6M n=75, G0 12M n=965, Panel 12M n=319, G1 12M n=102.
In the past [six/twelve] months have you already purchased [the product]
ChatThreads, Proprietary and Confidential.
Purchase Rate among Participants vs. Control, at 6 and 12 months:
2-3 times higher
WOM Drives Recommendations
G0 6M n=1270, Panel 6M n=661, G1 6M n=75, G0 12M n=965, Panel 12M n=319, G1 12M n=102.
73.7%71.5%
60.0%
48.0%
10.0% 9.1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
6M 12M
G0 G1 Panel
In the past 30 days, have you recommended [the product] to anybody?
ChatThreads, Proprietary and Confidential.
Recommendations among Participants vs. Control, at 6 and 12 months:
5-8 times Higher
WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption
WOMM Is Taking Off
• Continuing fragmentation,
clutter, avoidability of traditional
• Rise of digital social media – tools
and usage
• Increasing evidence of WOMM‟s
viability and power
Despite Recession,
WOMM Growing Fast
SOURCE: PQ MEDIA
Does not include in-store product sampling; coupons & loyalty programs; event marketing & sponsorships; public relations not
associated with WOM, such as crisis management; and social network and consumer-generated media advertising.
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2008 2009 2010 2011 2012 2013
Spending Growth ($M)
10.2%
Growth
12.8%
Growth
14.9%
Growth
16.7%
Growth
18.3%
Growth
COMBINED ANNUAL GROWTH RATE 14.5%
17.4
12.2
9.5
9.49.2
8.6
7.5
6.2
4.1
3.6
3.3
3.2
5.8
Shares of WOM spending by category
CPG
Food & Drink
Finance & Business
Electronics & Telecom
Retail
Auto & Transportation
Entertainment & Media
Apparel & Accessories
Healthcare & Pharma
Sports & Gaming
Travel & Leisure
Home & Garden
Other
Brands WOMMing
Across Categories
SOURCE: PQ MEDIA
WOMM Over the Next Few Years
• More standardized measurement
• More proof of superior long-term ROI
• More precise targeting
– Though targeting is built-in
• Better fusing of online and off
• Less shilling
• A staple in the marketing mix