March 2006
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While much attention has been paid to how Netflix's simple business model changed the video rental business, one unheralded feature could be the real reason for its success: recommendations. The site not only allows subscribers to rate the movies they love or hate, but to share that opinion with others in the Netflix community. Film industry officials are starting to pay closer attention to this influential form of consumer power. "The consumer gets this wonderful curatorial assistance," says Mark Urman of ThinkFilm. "They're told -- 'If you like that, you're really going to like this.' That builds the best kind of word of mouth, from people you trust."
Click to read the LA Times story
More than half of small businesses prefer recommendations passed on by consumers to each other to be more effective than paid advertising. That's the key finding of the latest Wells Fargo/Gallup Small Business survey. With fewer resources, the survey confirmed small business owners see more opportunity in talking to local merchants -- hairdressers, plumbers, or neighbors -- rather than spend money on expensive advertising. Online tools like wikis, blogs, and reviews are also becoming increasingly popular tools for small businesses looking to create buzz.
More info:
http://www.inc.com/criticalnews/articles/200603/ads.html
Stylehive is a new social bookmarking community that aims to do for shopping and products what Digg and Newsvine have done for news. The site invites people to share links and opinions with each other about new products. By providing a community for people to talk with each other, the users are essentially becoming influential trendsetters in style-oriented categories such as beauty, fashion, and home design. As with other consumer generated media, smart brands will be surely watching and monitoring the community for emerging trends.
Learn more
Jobs: MotiveQuest (Evanston, IL) seeks a Director of Research to manage and direct its word of mouth tracking team. Responsibilities include collection and analysis of online conversations. The company is also hiring a Senior Analyst and Analyst. Interested parties should contact the company via http://www.motivequest.com.
Make a new hire? Have an open WOM, viral, or buzz job opening? E-mail editor@womma.org and let us know!
Marketing guru Jack Trout recently posted an article on Forbes.com entitled "Is Word of Mouth All It's Cracked Up To Be?" The article generated a significant amount of buzz throughout the blogosphere. Here is a sampling of the responses.
Original Jack Trout article (click to read)
Responses:
* George Silverman
* John Moore
*Olivier Blanchard
64% -- more than half -- of all shoppers will never shop at a store again after hearing a friend's negative experience. That's the key finding of the Customer Dissatisfaction Survey from the Verde Group, Consumer Contact, and the Baker Retailing Initiative at Wharton. "If businesses want to stop the bleeding from negative word of mouth," said Wharton's Dr. Stephen Hoch, "It's clear that they need to invest in ensuring that each customer experience
is first rate."
Other key findings include:
* 31% of all customers who have a bad experience will tell at least one other person.
* On average, shoppers will tell four other people about their negative experience.
* As negative experiences are retold to others, they are often embellished and can become up to five times as damaging as the original story.
More info:
http://www.newswire.ca/en/releases/archive/March2006/10/c0764.html
While homegrown iPod ads have become commonplace, it is safe to say nobody expected Microsoft to produce one. But sure enough, a parody clip from Microsoft about runaway iPod packaging recently went viral. The only problem was that it was meant for internal audiences only and should not have been released in the first place. Instead of calling the lawyers, though, the company embraced the buzz generated by the clip. A spokesperson acknowledged, "It's natural to share funny things with friends ... we're happy to see others enjoy the laugh as well."
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See the ad
Marianne Richmond: Monkeys confirm influencer importance
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Gary Stein joins Ammo Marketing
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Download free preview of new book on consumer experiences
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As tools for collecting consumer sentiment grow more sophisticated, blogger Matt Galloway is experimenting with a decidedly retro method -- the telephone. Galloway recently launched Buzz-O-Phone, a free service that invites people to share their opinions "with a few hundred friends". Participants simply call a 1-800 number and rant for two minutes about a product or service. Galloway then selects the best ones and makes them available via podcast. Over 80 recordings have been posted since February 6, including the ones left on the virtual cutting room floor.
More info:
http://www.buzzophone.com
Customer reviews have a significant impact on what books consumers buy at online bookstores, with negative reviews carrying more weight. That's the key finding of a study conducted by the Center for Customer Insights at the Yale School of Management. Examining reviews at Amazon.com and Barnesandnoble.com, the impact of a negative review was found to be more powerful in decreasing book sales than a positive review is in increasing sales.
The study attributed this behavior to the credibility consumers place on the reviews. For example, multiple glowing reviews for a book may be perceived as hype generated by an author or publisher.
Disclosure: The study was co-authored by Dr. Dina Mayzlin, a member of the WOMMA Advisory Board.
More info:
http://www.cci.som.yale.edu/events/word_mouth.asp
http://www.som.yale.edu/faculty/dm324/papers.asp
A recent article in the Village Voice explored grassroots word of mouth marketing in the music business to promote new bands. Even as the article exposed harmful anti-consumer stealth marketing tactics, several marketers (all quoted anonymously) basically gave a virtual shrug to strong ethics guidelines, such as those outlined in WOMMA's Code of Ethics. One publicist was quoted as saying, "I will do anything. Whatever gets people talking about my client's product. There is no moral line."
WOMMA's take: We will continue to oppose stealth marketing and fight the good fight for strong ethical best practices in word of mouth marketing.
More info:
http://www.villagevoice.com/music/0609,sylvester,72318,22.html
BuzzMetrics-Intelliseek Merger Complete
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CarSpace Social Networking Site Launches
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User-generated content, which has become a large part of all online-based media, is moving offline. Three major brands -- Sony, Toyota, and L'oreal -- have agreed to ask consumers to create their commercials instead of the typical route of having them produced by an ad agency. All ads will be aired on the youth-oriented Current TV network, which is backed by former U.S. Vice President Al Gore. Current TV's Anne Zehern articulated the major change for marketers, noting they had shifted from "brand guardians" to "brand hosts".
More info:
http://www.adage.com/news.cms?newsId=48091
While marketers seek ways to use word of mouth marketing to generate good buzz, they must also be prepared and equipped to deal with the negative as well. That was a point raised by Jim Nail of Cymfony and Pete Blackshaw of Nielsen BuzzMetrics at the Search Engine Strategies conference. Strategies for dealing with negative buzz mentioned included reaching out directly to influencers who discuss the offending topic and provide them with real information that speaks to their concerns. The key is to get engaged early and not let the conversation continue unaddressed.
Learn more
Word of mouth can be a "useful approach" for attracting new customers. That's the word from Daniel Bone, Customer Insight Analyst for Datamonitor. Bone elaborated with seven reasons why word of mouth works:
1. Reduces decision uncertainty
2. More trustworthy and impactful
3. It's cheaper
4. Less hindered by social taboos
5. Effective and manageable
6. Speed and broad coverage
7. Complements other marketing activity
More info:
http://www.crm2day.com/experts/50192.php
Podcasting and RSS feeds have become popular tools for marketers looking to spread word of mouth, but they still have a way to go before reaching the mainstream. A study from Pew Internet & American Life showed that only 13% of respondents knew what the term "podcasting" meant while only 9% were reported to know about "RSS feeds." Personal Internet security topics such as "spam", "firewall", and "spyware" had the highest familiarity at 88%, 78%, and 78%, respectively.
WOMMA's spin: this level of widespread familiarity is still amazing for a medium that's just barely a year old.
More info:
http://www.emarketer.com/Article.aspx?1003851
Job: ElectricArtists (New York, NY) is seeking an Account Executive. Online marketing industry experience required. The position is based out of the company's New York office. More details available at http://www.electricartists.com.
>> Make a new hire? Have an open WOM, viral, or buzz job
opening? E-mail editor@womma.org and let us know!
Washington Post: Blog Buzz Helps Companies Catch Trends in the Making
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WOM Hits Fashion Week
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Top 25 Most Influential Business Bloggers
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