081017 Word Of Mouth

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WORD-OF-MOUTH (MARKETING)

DIGITAL

Waggener Edstrom Worldwide |Ged Carroll |November 17, 2008

2WORD-OF-MOUTH:

• What is word-of-mouth (WOM)

• Why WOM?

• Key drivers of WOM

• Being on the receiving end

• Ethics

• Questions

WHAT IS WOM?

4WHAT IS WOM?

Word of mouth, is a reference to the passing of information by verbal means, especially recommendations, but also general information, in an informal, person-to-person manner. (Wikipedia)

Word of mouth is a pre-existing phenomenon that marketers are only now learning how to harness, amplify, and improve. Word of mouth marketing isn't about creating word of mouth -- it's learning how to make it work within a marketing objective. (WOMMA)

5CRITICAL PART OF MEDIA INTERACTION

WHY WOM?

7WHY WOM?

Consumers more receptive to referral-based advertisingHigh level of consumer trust in referral-based advertising•Edelman found that people most likely to trust ‘people like me’Marketers realising that WOM is an extension of loyalty•Fits in with Net Promoter measureMarketers finding greater efficiency in focusing on consumers who count

8ITS NOT FOR EVERYONE

Do you work in a highly regulated marketplace?•Ethical pharmaceuticals•Financial Services•Tabacco productsAre you likely to have determined badvocates?•Defense industry•Nuclear power•Animal welfare issuesDo you have a closed top-down culture?•Do you restrict access to websites in the workplace?

KEY DRIVERS

10KEY DRIVERS OF WOM

Organic• Focus on customer satisfaction• Improving product / service

quality & UX• Researching & tracking online

conversations• Identifying & researching

influencers• Responding to concerns &

criticisms• Opening a dialogue & listening to

people• Earning customer loyalty

Amplified• Creating communities• Developing tools to share their

opinions• Motivating advocates / evangelists

to actively promote a product• Giving advocates information that

they can share• Create a social object• Starting a conversation via

mar.coms• Direct outreach to identified

influencers

11THE LONE SERVER 11

12THE UNITED NATIONS STANDS UP AGAINST POVERTY

• The UN needed to create awareness and generate interest for an event designed to highlight and reinforce the pledge made by governments from 189 countries to work toward the eradication of poverty worldwide by 2015.

• Targeted more than 343 influentials via three digital press releases

• SEO that increased impressions and clicks by 20 percent

• Conducted blogger outreach that resulted in at least 338 blog posts

• 25,000 followed via Twitter• 290,400 connections via LinkedIn• 9,500+ views on YouTube and

UStream.TV

BEING ON THE RECEIVING END

14BEING ON THE RECEIVING END

• Unethical practices will be criticised

• Listening is as important as communicating

• Consumers benefit from the same network effects and efficiences as businesses

• Speed of response is of the essence• Attitude is critical

• Valuable feedback from passionate consumers

• Online criticism bleeds into the mainstream media, once it reaches critical mass

15BRING BACK EGGNOG LATTE

• Starbucks launches its Christmas menu in the UK on November 6

• Change in menu dropping eggnog latte (a beverage that has more calories than a Big Mac)

• By 6pm there were six groups with 200 members

• Starbucks boycott initiated

• “On third day of my Starbucks boycott, cost to Starbucks so far £9.30” – William Barrowman McIntyre

16BAD PHORM

Phorm is a company looking to provide relevant advertising based your web behaviourIt records all the web pages that you visitThe company didn’t respond fast enough•UK and US government investigations ensued•Partners pulled out of business relationships •Sustained organised badvocates•Mainstream press coverage in The Guardian, The New York Times

ETHICS?

19UNETHICAL PRACTICES

• Stealth marketing• Shilling (astro turfing)• Infiltration (sock puppetry)• Comment spam• Defacement• Spam• Falsification (lying, deception or fraud)

20UK LEGISLATION

• From end of May 2008: Consumer Protection from Unfair Trading Regulations 2008– No astro-turfing– No sock puppetry– Up to 6 months jail time– 8,000 GBP fine

21CASE STUDY: WORKING FAMILIES FOR WAL-MART

• Edelman and Walmart developed a blog following a cross-country tour designed for Working Families for Walmart ‘Walmarting Across America’• Called out on the blogosphere for a

lack of disclosure• Coverage in mainstream media

• New York Times• BusinessWeek

• Damage to both agency and client brands

• Subsequent efforts come under increased scrutiny

BIBLIOGRAPHY

23BIBLIOGRAPHY

• Word of Mouth Marketing Association• Wal-Mart’s Jim and Laura: The Real Story – BusinessWeek• The Common Craft Show