January 2007
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More than 50% of respondents to Compete Inc.'s recent Spark! study, titled "Embracing Consumer Buzz Creates Measurement Challenges for Marketers," indicate that they use CGM to make or narrow their decisions, while 23% say they use CGM to confirm a decision and 15% claim to use it to determine their top choice. According to Compete, consumers are relying heavily on messages from other consumers to influence their buying decisions.
Other findings:
* 71% of car and travel consumers are influenced by CGM.
* Just 35% of those same consumers say they are influenced by brands.
* Auto buyers (35%) prefer customer ratings and reviews over company websites (32%) and car dealers (32%).
* Two-thirds of travelers prefer consumer reviews.
* Approximately $2 billion in travel spending is influenced by CGM.
Learn more (Compete)
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According to DoubleClick, the latest company to release research supporting the importance of "influencers," online marketers should use new and emerging media to influence word of mouth among consumers. The company's December 2006 research report, titled "Influencing the Influencers: How Online Advertising and Media Impact Word of Mouth," indicates that influencers are more likely than other internet users to consider online advertising a key part of their shopping research -- which makes reaching them via advertising a surmountable task.
Other findings:
* 23% of non-influencers say they spend 5+ hours a day online, compared to 39% of influencers.
* Influencers say they are more likely to take actions to control their exposure to advertising -- using DVRs, pop-up blockers, etc.
* 76% of influencers say they pay attention to advertising when they are shopping for relevant products compared to 63% of non-influencers.
* Influencers are more likely to do internet research after viewing an ad, to talk about ads of interest with their friends, and to acknowledge that ads often contain valuable product information.
Learn more (DoubleClick)
Learn more (Spanner Works)
People are more likely to contribute to an online community when a moderator is present and when the messages are interactive and posted at a slow rate, claims a November 2006 University of Missouri-Columbia study. Even the "quiet" presence of a moderator assures potential posters that the community will not fall apart or be "hijacked" by people with malicious intentions. Alternatively, participants are drawn to communities where there are high levels of interactive postings, but only if the response rate is slow enough to give "lurkers" a sense of opportunity to add something to a discussion.
Because online communities have the propensity to become either inclusive or exclusive -- to the detriment of increased participation -- it is important that companies, marketers, and brands understand which features encourage participation, and to cultivate those features in their own online communities.
Learn more (M.U. News)
Companies using buzz management techniques as part of their marketing mix are better served by instigating more dispersed buzz than by allowing the buzz to stay siloed in just one area, according to David Godes and Dina Mayslin's 2004 Marketing Science article, titled "Using Online Conversations to Study Word of Mouth Communication." The authors, who set out to prove the viability of using online conversations to measure word of mouth, ended up finding this causality. They also investigated the relationship between online and offline communications -- especially as they relate to word of mouth.
Research findings:
* People make offline decisions based on online information.
* Online conversations may be a proxy for offline conversations.
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* The internet has significantly impacted how consumers talk about and recommend brands.
* Word of mouth -- a trusted source of information -- is amplified online to reach significantly larger audiences.
* "Brand Advocates" have emerged online as primary influencers, with at least a two to one rate of converting an actual friend or family member to buy the same product or brand.
* Brand Advocates are incredibly valuable to marketers because they are better connected consumers with a larger sphere of influence.
Sound familiar? It should. Yahoo! and comScore Networks' recent research report, titled "Engaging Advocates Through Search and Social Media," has proven some of the basic tenets of the word of mouth marketing philosophy. With all of this proof piling up, it's getting harder and harder to ignore the power of word of mouth marketing.
Learn more (Yahoo!)
Learn more (MediaPost)
Learn more (ClickZ)
Learn more (WebProNews)
Learn more (MarketingVox)
That coming-of-age leap from tween (ages 8-12) to teen is marked by more than just egocentrism and a pronounced fear of the opposite sex. It is also when most youngsters become fully immersed in e-communication and social networking, according to an October 2006 study by WOMMA member companies Harris Interactive and Alloy Media + Marketing. According to the study, not only are teens relying on social media to fuel their friendships, but they are also using online communities to practice social behaviors and explore aspects of their identity that might not be "safe" offline.
Other findings:
* 74% of teens use email and instant messaging versus 26% of tweens.
* 53% of teens would rather talk to their friends in person versus 81% of tweens.
* 36% of teens say they have friends they've never met in the "real world," though most teens use social networking to enhance relationships with people they already know.
* 30% of teens say they are more honest with their online friends.
* The average teen has 75 friends listed on their online profile, 52 on their IM buddy list, 39 on their email contact list, and 38 on their cell phone, and the number of contacts is often regarded as a status symbol.
Learn more (Harris Interactive)
Learn more (WebProNews)
After launching its CBS Brand Channel on YouTube back in October and uploading more than 300 clips (25 of which garnered "top-viewed" spots in November), CBS proudly touted ratings jumps for many of its shows, especially those in the late night category. The clips received a total of 29.2 million views on the CBS Channel site, which claims an average of 857,000 views per day.
While CBS isn't ready to give YouTube all of the credit for its recent spike in viewership, the numbers indicate that CBS Channel viewers are becoming CBS broadcast viewers after watching the clips online. The viral nature of the clips also make it possible for viewers to send friends their favorites and to use word of mouth to increase views -- which is something YouTube says is bringing "a significant new audience of viewers to each broadcast."
Learn more (YouTube)
Learn more (Hollywood Reporter)
Face-to-face word of mouth messages pack more punch than printed word of mouth communications, according to a 1991 Journal of Consumer Research article titled, "Effects of Word-of-Mouth and Product-Attribute Information on Perspective." The article also reports that the effect of a word of mouth communication is diminished when a prior impression (from memory) exists or when very negative information is presented. The authors propose that things which seem unrelated to the judgment of a piece of word of mouth can be explained and understood using the accessibility-diagnositicity model, which takes into account internal frames of reference.
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Consumers who use social networking sites to browse for gift ideas would use the sites to find out about upcoming sales or to download coupons if given the option, according to a recent American Marketing Association survey. The AMA contends that survey results demonstrate a "narrowing gap between social networking and e-commerce," which makes a case for the power of product-mentions in reliable social networking contexts.
Survey findings:
* 49% of respondents would participate in shopping-related activities on social networking sites if such activities were available.
* 47% would visit a social networking site to search for gift ideas.
* 29% would buy products directly on those sites if they were able to.
Learn more (PR Newswire)
Learn more (USA Today)
Learn more (BizReport)
Whatever the product involved, people's brains respond better to well-known brands than to their less famous counterparts, according to German researcher Christine Born of Ludwig-Maximilians University, Munich, in her recent presentation to the Radiological Society of North America. Born and her team demonstrated that exposing their 20 test subjects to "weak" brands forced their brains to work harder, causing activation to occur in areas of the brain linked to negative emotions. Strong brands encountered less activation, and the activation that did occur was focused on areas of the brain associated with self-identification, rewards, and positive emotion.
This research makes a case for the importance of word of mouth in both creating and perpetuating brand familiarity. The more familiar consumers are with brands, the less work their brains have to do, and the less negative association occurs.
Learn more (Reuters)
Learn more (Economic Times)
Learn more (Playfuls.com)
Highlighting some of the differences between word of mouth marketing in the United States versus Europe, the Brand Science Institute's recent survey of 329 marketing executives hits on some of the most current trends and obstacles facing European word of mouth marketers.
According to survey analysis, word of mouth marketing in Europe is still in its relative infancy because marketing managers are weary of using a marketing tactic that "lacks clear and instantaneous measures of success," preferring to use traditional methods with less consumer reach instead. Also, marketers are reluctant to compare word of mouth in Europe to word of mouth in the United States because of cultural and linguistic differences. Those surveyed indicated that there is more fragmentation in the European industry, leading marketers to turn to their advertising agencies for word of mouth campaign design and management -- regardless of whether the ad agency has word of mouth marketing experience -- which leads to weak campaigns and increased failure rates.
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In their 2003 research paper, titled "The Effect of Word of Mouth on Sales: Online Book Reviews," Judy Chevalier and Dina Mayzlin from the Yale School of Management explore how online customer ratings and reviews affect the sales on Amazon.com and BarnesandNoble.com.
Research findings:
* Customer word of mouth (in the form of reviews) has a causal impact on purchasing behavior.
* Customer behavior suggests that the perceived "fit" between the customer and the book is improved by using reviews to screen purchases.
* Longer reviews do not necessarily stimulate more sales.
* At both sites, customer reviews are predominantly positive.
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WOMMA is always hard at work trying to get our members the best data to drive their word of mouth efforts. With that in mind, we have partnered with IM MS&L and The Keller Fay Group to make the executive summary and first chapter of their new report, "Conversation Catalysts: The Word of Mouth Leaders," available for download by all WOMMA members via our Member Center.
WOMMA is anxious to extend this partnership opportunity to other research companies. If you have something you think might be valuable to WOMMA members and you want to discuss a future partnership with WOMMA, contact: editor@womma.org
WOMMA members: To get a free copy of this 38-page, data-packed document, simply log on to the Member Center and click on "Research Specials."
WOMMA's Member Center
The majority of the population converses about brands an average of 79 times per week, says a recent report from WOMMA member companies The Keller Fay Group and IM MS&L. According to the report, 15% of the population consists of "Conversation Catalysts," who talk about 149 brands per week on average. On the whole, these Catalysts have more conversational stamina than the rest of the population, participating in 184 conversations per week versus 114. While Conversation Catalysts mention more brands than others, the consumer categories they emphasize are consistent with that of the rest of the population. For example, both Catalysts (16 mentions) and average consumers (3 mentions) talk most often about entertainment and media brands.
Research findings:
* 37% of Catalysts are Baby Boomers aged 40 to 59.
* Catalysts' conversations are divided between those in which the Catalyst gives the most advice (38%), those in which someone else does (25%), and those in which advice is shared in both directions (37%).
* Catalysts rely heavily on online resources for the information that they pass along to their conversational partners.
Learn more (Business Wire)
Learn more (Keller Fay)
Learn more (NY Times)
Both active community "enthusiasts" and the quieter "lurkers" upped their spending on eBay Germany once they became involved in the site's customer communities, researchers Rene Algesheimer and Paul Dholakia reported in their November 2006 Harvard Business Review article, titled "Do Customer Communities Pay Off?" For their study, a randomly selected portion of eBay Germany customers were invited to participate in eBay's customer communities (those not invited served as the control group).
Research findings:
* Online-community participants bid twice as often on eBay as members of the control group, won up to 25% more auctions, and paid prices that were as much as 24% higher.
* Enthusiasts listed up to four times as many items for sale and earned up to six times as much in monthly sales revenues as control users.
* Compared to the control group, nearly 10 times as many lurkers (56.1%) and enthusiasts (54.1%) started selling after they joined/participated in customer communities.
* Increased buying and selling activity of community members generated approximately 56% more sales for the duration of the research.
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Retailers got in touch with their inner techies in an attempt to reach the two-thirds of adults who intended to do their holiday shopping online this year. According to the 2006 eHoliday Mood Survey conducted by BizRate for Shopzilla and Shop.org, 41.6% of retailers intended to use blogs or RSS feeds as part of their holiday marketing mix, while 79.5% planned to use viral marketing at social networking sites.
Once they lured shoppers to their sites, an increasing number of online retailers were willing to offer free and discounted shipping in order to "seal the deal." Two years ago, only 64% of online retailers offered shipping incentives, while this year 83% used shipping-based promotions.
Learn more (DM News)
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Learn more (Business Blog Consulting)
While customer satisfaction by itself doesn't necessarily up the odds of word of mouth success, incentives prompt satisfied customers to spread the word, according to Jochen Wirtz and Patricia Chew's 2002 International Journal of Service Industry Management article, titled "The Effercts of Incentives, Deal Proneness, Satisfaction, and Tie Strength on Word of Mouth Behavior."
Other findings:
* Deal-prone customers generate more word of mouth -- independent of incentives.
* Satisfied customers are a "necessary but not sufficient" component for positive word of mouth generation.
* Incentives might be an effective way to induce satisfied customers to make recommendations.
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