Thursday, October 20, 2005

Is Tremor’s Justification – “You Never Tell A Panelist What To Say” – a Cop Out?

USA Today published a story entitled “P&G ‘Buzz Marketing’ Unit Hit With Complaint” (written by Bruce Horowitz). Apparently, a consumer advocacy group – Commercial Alert – recently filed a complaint with the Federal Trade Commission that charges Tremor targets teens with deceptive advertising.

According to the article, the executive director of Commercial Alert, Gary Ruskin, suggests states that buzz marketing agencies are at fault for “perpetuating large-scale deception upon consumers” when people recruited to promote products via WOM don’t disclose their affiliation with the marketing agency.

Steve Knox, Tremor’s CEO, defended his company’s practices stating that their “panelists” are not paid cash but instead receive free samples or other kinds of materials. He is also quoted as saying “If we’ve done our work correctly, they talk to their friends about it” but Tremor does not tell their members to say they are part of Tremor “because you never tell a (panelist) what to say.”


Of course you shouldn’t tell a panelist what to say or how to say it. People should be sharing their honest opinions (one of those lessons we learned in kindergarten). However, if this quotation is a fair representation of Tremor’s position, it seems like it’s a lame justification for not having panelists be open about their affiliation. Further, their position opens up the perception that Tremor engages in stealth or undercover marketing (see WOMMA’s stance on stealth marketing, recently released in light of news stories about the legality and ethics of WOM and buzz marketing, but consistent with the association’s position from the beginning).

Buzz marketing and firm-facilitated WOM doesn’t need to be undercover to be effective. I am developing a theory of institutional WOM that contends that WOM encouraged by an organization (aka, “amplified” WOM) can be just as effective as “organic” WOM when two conditions are present: 1) sincerity, and 2) relevancy. That is, conversational participants need to trust that the other person is sincere and has their best interests at heart, and also that the information provided is relevant to their daily life and the conversational context (meaning that the WOM is talked about at relevant point in the conversation and in the history of their relationship). I am currently collecting data that will provide evidence for or against this theory. Stay tuned for results!

Two final comments:

1) Be sure to visit Commercial Alert’s website to read the comments posted regarding their complaint filed against P&G. This provides some fascinating insight into arguments for and against buzz marketing in a highly commercialized society.

2) The USA Today article mentions that “several smaller buzz marketing specialists” were also named in the complaint. I invite someone to follow-up with this to see what other companies were named. Please post anything you find in a comment or track back :-)

Content Added (10/20/2005, 7 pm EST):

Commercial Alert's Letter to the FTC The "several smaller buzz marketing specialists" are named in this PDF version of the letter. I think the spirit of the Commercial Alert complaint -- that people who voluntarily affiliate with buzz marketing agencies, or are paid by companies or agencies, should not mislead the people with whom they talk -- is sound and consistent with the WOMMA ethics policy. However their complaint unfairly lumps together companies that abide by the WOMMA ethics code with those that do not.

WOMMA's "WOM 101" Page distinguishing different kinds of word-of-mouth marketing (the Commercial Alert letter conflates "buzz marketing" with "guerrilla" and "stealth" marketing and fails to distinguish it from "shill" marketing).


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