Getting People Talking

Word of Mouth

The Debate

• To paraphrase George Orwell:-“All consumers are not created equal”

• It seems that consumers are not an amorphous mass whom we can blanket bomb with commercial messages that they will all meekly respond to, as traditional advertising models would have us believe

• Instead, there are some consumers who will pick up on information and pass it on to their social network thus acting as powerful brand advocates, or influencers

• Word of Mouth Marketing is an attempt to harness this people power and make it work for advertisers and their brands, but how can media be part of this?

Summary of Findings

• The need for Word of Mouth has risen as the belief in traditional forms of advertising have declined

• Word of Mouth is all about TRUST-When people feel vulnerable-When they’re going through changes in lifestage-When they need advice about something from an

expert – but someone they know, not an impersonal advisor

• Certain consumers are more likely to be conveyors of WOM

-These people are known as Influencers – about 10% of the population

-However Influencers are generally different for each category

Summary of Findings

The Internet, particularly the rise of User Generated Content, has played a fundamental role in the move towards WOM marketing

However, magazines can also play a part in generatingWOM

-They are seen as close and trusted friends-Editorial viewpoints are often taken as the readers own-Magazine readers are also more likely to be among the 10% of Influentials who generate WOM

Contents

• The Spread of “Word Of Mouth” (WOM) - And the rise of the Internet

• Why is WOM so important?

• Influencing the Influencers

• WOM Marketing - How Media can be used to propagate WOM

In the Beginning

About 350,000 years ago, Hominid hearing apparatus was tuned to hear sounds made in speech for the first time

Today, Word of Mouth is instrumental in 83% of purchase decisions

Why Do We Talk?

• Before we could write, the only way for humans to communicate was via speech

• So for hundreds of thousands of years, talking was our most important social connector

- Information – danger, food, water- Social – history, love, kinship, enmity

• Word of Mouth today fulfils the same role- Provides people with information- Reinforces social bonds- Builds on oral tradition

How Does Word of Mouth Work?

Spontaneous – sharing an experience“I went to an amazing restaurant on Friday night”

Prompted – speaking in response to a need“If you’re looking for a new buggy, I’d recommend the Maclaren”

Secondary – relating experience of another person“I’ve never tried it, but my mum has and she didn’t think it was that great”

What Propagates WOM?

• Family

• Friends

• Colleague

• Trusted Independent

• Aspirational Endorser

Different Types of WOM

• Word of Mouth is deemed to be all communication which takes place about brands on a Consumer to Consumer basis

-This can be split into two main types: Buzz and Advocacy

• BUZZ - Talking about something new, cool, different,

provocative - Something to be passed on to gain social currency- This can have a positive effect on a brand but not necessarily lead to sales

• ADVOCACY- Focused on the brand and its merits

(positive or negative)

This is more likely to have a greater short-term sales effect

Why Is WOM Most Important?

Lifestages

Transition = Point of Vulnerability = Need for new information

Why Has The Role of WOM grown?

• As life becomes more complex and choice proliferates, people are relying more than ever before on recommendations

- WOM now 1.5 times more important now than it was 25 years ago

• 89% of women believe recommendations by friends and family• 70% of women learn about new products or services from

another woman

Recommendations Make People Feel Confident And Keep Them Connected

WOM Growth

Where do you get most of your informationabout new products and services?

Late 70's Late 90's0

10

20

30

40

50

60

70

80

90

100

Friends & Fam-ilyAdvertisingEditorial

Internet 2.0

• The internet has caused a seismic shift in people’s ability to find information and communication with each other

• The next phase of web development – “Internet 2.0” sees the consumer taking control:

-Blogging-Community sites like MySpace and Face Book-User generated content as on You Tube or Flickr-Chat Rooms and Forums for consumers to comment on anything and everything!

• Suddenly anyone can get their voice heard and air their opinions to millions of others

-Advertisers want to harness this power -(And try and steer it to their benefit)

Why Is WOM So Important?

• Trust for big businesses is at an all-time low- And this includes their advertising

• Consumers are more ad-savvy than ever – they are no longer passively waiting to be told which products to buy

- Brand choice is huge & often overwhelming- Media fragmentation and consumer control

means they are also more easily able to edit out advertising they’re not interested in

Advertisers must find new ways of connecting and engaging with their

consumers, and new channels through which to speak to them

The Road to WOM

WORD OFMOUTH

MARKETING

Need for BreakthroughGrassroots Vehicle

Need for Remarkable Brands /Contagious Ideas

Need for Influential Consumers

Mass Marketing Less Effective

Low Credibility of Conventional Advertising

Established Brands / BusinessModels Under Threat

Number of Choices / BrandsUp

Low Credibility of Conventional Advertising

Tuning Out

Want Authenticity, intimacyRemarkability, edge

Rise of Word of MouthHeterogeneous Consumer

Distribution Concentration

Pace of Technology Faster

Less Time, Attention, Trust

Media Environment

Marketplace

Consumer

Fragmentation & Cost

Rise of Internet

Differentiation Low

Financial Pressure

Globalisation

The Decline of Trust

• Growth in WOM occurred during mid-90’s

• This coincided with a period when consumers lost trust in large organisations:

- Government- Businesses- Brands

• Instead they turned to family and friends as trusted sources

- Offer advice based on personal experience- NOT marketing spin or hype

Why Do People Trust?

A Person ‘Like Me’

Influencing the Influencers

‘Alphas’and‘Sneezers’: Influencing the Influencers

Traditional Advertising Model Communicati

on

Audience

Consumers are “Passive Receivers” who are served blanket advertising

‘Alphas’and‘Sneezers’: Influencing the Influencers

New Advertising Model

Communication

Audience

Reach Opinion Leaders and they will

pass the communication on to Opinion Followers

10%

90%

‘Law of the Few’

• Consumers aren’t a collection of isolated individuals but a community of interconnected people

• Brand perceptions shaped by many influences- Advertising- Word of Mouth- User imagery (aspirational people using

product)- Observed behaviour (watching how others do

things)

• Paid for communications can’t reach everyone- Instead influence the influencers and their

position in the hierarchy will help to position the brand in others’ eyes

Who Are the Influencers?

• Who they’re NOT:- Most affluent- Best educated- Elected officials- CEO’s of major corporations

• They ARE:- The 10% most actively engaged in social and

cultural dynamics of their community

• They are twice as likely than average to be asked their opinion on products and services

• They are also different for every category- Only approx 5% of people are “Pure” influencers

in every walk of life. The rest are influencers in 1, or

maybe more categories

Word of Mouth Marketing

Today’s marketing world is broken. We must accept there is no “mass” in mass media. We

must always remember the consumer is Boss… Consumers today are less responsive to

traditional advertising… they are embracing new technologies… and making purchase

decisions in environments where marketers have less direct influence.

Emergence of WOM As a Marketing Tool

Emerging marketing techniques being used currently, or intended to use in next 6 months

Email Market-ing

Word of Mouth

Search Marketing

Product Placement

Branded En-tertainment

0

10

20

30

40

50

60

70

80

%

Source: MPA

WOM Marketing

How to make it work:

Make it mutually beneficial

Give them a reason to talk

Empower consumers to share

experiences

Implementation of WOM

InfluenceThe

InfluencerProduct

InnovationBrand

Ambassadors

ReferralProgrammes

ProductSeeding

Get aCause

Listen toFeedback

Measure

How To Engage Consumers With WOM

• Keep it real and/or simple

• Be relevant and memorable

• Be personal

• Build a customer journey

• Provide support / expert advice

• Gain trust

• Provide brand experience

• Build connectivity

• Above all, show respect, and listen to feedback

The Honesty ROI: Honesty and Relationship, Opinion and Identity

• Honesty of Relationship- Be open about any relationship between marketer

and endorser

• Honesty of Opinion- Never tell consumers what to say

• Honesty of Identity- Disclose identity of origination of any

communication

• Research shows that being open about involvement in WOM marketing leads to better results than deception

Targeting the Influentials

Targeting Influentials

WOM in individual categories varies amongst different consumer groups.

The PPA’s Targeting Influentials study identifies who the Influentials responsible for generating it WOM are and how different product categories .

Then having identified the Influentials, what do their media consumption habits suggest might be an effective way of engaging with them?

Identifying the Influentials

Total (Existing Product) Total (New Product)

19

27

16

2221

19

Editorial/Programme Advertising

Friends and Family

Thinking about the following product area, where do you get MOST information about products and services?

% Agreeing

Source: BMRB Omnibus Survey/PPA Targeting Influentials 2008

Clothes Category

Identifying the Influentials

• Do you talk to lots of people about a category? (Connectors)

• Do you know a lot about the category? (Mavens)

• Is your opinion likely to convince others? (Sellers)

• Key Influentials are Connectors, Mavens and Sellers

Sellers

ConnectorsMavens

Influentials

Clothes Category

Source: BMRB Omnibus Survey/PPA Targeting Influentials 2008

Reaching Influentials

How likely are each of the following types of advertising to influence whether you would talk with others about Clothes?

Magazines TV Radio Newspapers Internet

70 70

40 42

51

Source: BMRB Omnibus Survey/PPA Targeting Influentials 2008

Reaching Influentials

Which media do the Influentials in the Clothes category use?

Magazines TV Radio Nat. News-papers

Outdoor Internet

190

132

57

110

127

165

Source : TGI /WOM : Key Influentials and heavy users of medium

How Can Media Get People Talking

A Reminder

• Who do people turn to for WOM recommendations?- Family- Friends- Colleague- Trusted Independent- Aspirational Endorser

• Media has the potential to act as either of these

How Readers Relate To Magazines

Magazines are in the centre of “My World”, the same placeas close family and friends – the place where trust is highest

Me

Nuclear

Family

Extended

Family

Local

Community

City, countyNation

Super-RegionWorld

Magazines

Return on Involvement

• Readers are so involved with the opinions of the magazine that they are often adopted as their own

• Magazines contribute more than any other marketing channel to a person’s own recommendations to friends and family

• This effect is strongest amongst the 10% of the population who are Influentials

• So not only do magazines influence their readers purchase decisions, they also have an indirect impact on the readers circle of influence

Return on Involvement

Ma

ga

zin

es

In-s

tore

Te

levis

ion

Ne

wsp

ap

er

Co

up

on

Ra

dio

We

b

25

35

45

55

65

General Population Influentials sm

Magazines have more influence than any other marketing channel

% Saying Which Marketing Elements Contributed to Recommendations of Theirs in Past Year

Source: Roper Reports

Just How Influential Are Magazine Readers

• Almost half of Influentials in the USA (49%) are heavy magazine readers

• But only 1/3rd (32%) are heavy TV viewers

• So, an Influential is 22% more likely to be a heavy magazine reader, (index 122) and 21% less likely to be a heavy TV viewers (index 79)

Source: Roper Reports

It’s Good To Talk

The heaviest 20% of magazine readers are the most likely group to talk to others about Toiletries, H/hold Products, Clothes,

Pharmaceuticals

Toiletries H/hold products Clothes Pharmaceutical/Chemist products

90

100

110

120

130

Magazines Cinema Outdoor Internet Radio TV Newspapers

Talked to others about

Index

Base: All adults

Source: TGI

Experts

The heaviest 20% of magazine readers know a large amount about many of different topics

Toiletries Clothes Alcohol H/hold products50

100

150

200

250

Magazines Cinema Outdoor Internet Radio TV Newspapers

Know a large amount about

Ind

ex

Base: All adults

Source: TGI

Talk to Many Different People

Toiletries H/hold products Clothes Home furniture/furnishing

75

100

125

150

175

200

Magazines Cinema Outdoor Internet Radio TV Newspapers

Talk to many different people about

Ind

ex

The heaviest 20% of magazine readers talk to many different people about certain topics

Base: All adults

Source: TGI

Likely to Convince Others

The heaviest 20% of magazine readers believe they are likely to convince others about their opinions on a range of different

categories

Toiletries H/hold products Alcoholic drinks Food for home75

100

125

150

175

200

225

250

Magazines Cinema Outdoor Internet Radio TV Newspapers

Very likely to convince others about

Ind

ex

Base: All adults

Source: TGI

But What About the Internet?

• Recent Millward Brown research suggests that though Online WOM is more visible, offline is more powerful:

- Online WOM works best for certain products or services e.g. car insurance, digital cameras

- However, consumers are starting to seek expert recommendations using online sources

- Furthermore, offline is more often used to spread negative WOM

• Personal contacts are far more important for seeking advice - they are a trusted source who understands what is needed

- Online WOM is diminished by lack of knowledge about who’s giving the advice, and by lack of knowledge about who wants the advice

Summary of Findings

• The need for Word of Mouth has risen as the belief in traditional forms of advertising have declined

• Word of Mouth is all about TRUST-When people feel vulnerable-When they’re going through changes in lifestage-When they need advice about something from an

expert – but someone they know, not an impersonal advisor

• Certain consumers are more likely to be conveyors of WOM

-These people are known as Influencers – about 10% of the population

-However Influencers are generally different for each category