Monday, October 24, 2005

On Affiliation with a Buzz Marketing Agency, Disclosure, and Shopping in a Supermarket -- Part 1

John Cass and Matt Galloway made two very interesting comments to my blog post about the issue of buzz marketing and disclosure, especially in light of the Commercial Alert letter to the FTC seeking disclosure requirements for WOM marketing firms like P&G's Tremor. John made the following comment:

I was thinking the P & G example is a little bit like going to a supermarket where someone asks you to test a product, say a dip or a new type of microwave sandwich. If I ate the product, liked it, bought it and went home and told all my friends. Commercial alert is suggesting the company would ask me to inform everyone I spoke with about the new product that I received a free product at the supermarket. Somehow I don't think that type of product testing and promotion is against the FTC rules. What do you think?

Thanks for the comment John! I agree with you that I don't think the the supermarket situation would violate FTC rules about deceptive advertising. Why? The identities and affiliations of all the parties are clear and transparent, and thus the potential for being misled about the affiliation is low. The customer in the store knows that the person giving you the sample is employed by the store (or, in some cases, is from the company making the product) and the purpose of the interaction is to provide the customer with a product sample.

But what you're writing about is whether the person who tries the product at the supermarket through a free sample marketing campaign needs to tell the other person how they learned about it. This is different. In the supermarket example the person talking about the product DOESN'T HAVE an institutional affiliation with the store or with the company making the product. With buzz marketing, the person telling others about the product DOES HAVE an institutional affiliation.

And not only is there an institutional affiliation in buzz marketing, but this affiliation is not marked by the context cues (meaning no one is in uniform, one may not be in a "commercial" setting, etc.). In fact, the context cues often suggest an "everyday" conversation (the scare quotes are used to mark the fact that I'm using the term "everyday" as a contrast term to "institutional" talk where either the product/service/brand being discussed is part of an organized WOM marketing campaign, and/or the person doing the talking is affiliated with a buzz marketing agency). The/an explicit purpose of a buzz marketing campaign is to stimulate discussion about the brand/product/service and the person talking about the product has made a conscious alignment and affiliation with that process. The context cues of everyday interactions would not usually suggest participation in such a process. So with buzz marketing campaigns there is greater opportunity for people to feel like they are being misled (even though there may be no intention to mislead).

Thus, I don't think the free-sample-in-the-supermarket example matches the situation for buzz marketing and disclosure of identity.

Now to the first part of Matt's posting (thank you for your comment as well!). Matt writes:

I've been thinking a lot about disclosure in the BzzAgent/Tremors WOMM model. I'm currently reading Grapevine and I've heard Dave Balter speak on this and I've read some of you stuff from previous WOMMA events. Dave says (usuallu citing some study conducted by you) that the effectiveness of a BzzAgent isn't effect by the disclosure of their association with a WOMM program . This makes sense to me as I think it is more about the trust of the listener and the tone, context, sincerety, etc. of the WOM Unit.

So the question from this first part of Matt's comment is "does it matter?" The "it" meaning how a person learned of a product or service. The free-sample-at-the-supermarket analogy is a useful starting point here: For example, if someone tells me about a great new food item it doesn't matter to me whether that person bought it on their own, tried it, and told me, or if that person got the sample in a supermarket, tried it, and told me. I imagine many people would agree that it doesn't matter in the supermarket scenario.

If we apply this to buzz marketing, does it matter if people learned about something from a participant in a buzz marketing campaign? Would that person's recommendation count just as much? This was a question asked by GfK/NOP World. According to their study, 76% of the people surveyed said it didn't matter to them if a product was recommended as part of a buzz marketing campaign as long as the person, who they knew and trusted, thought the product was good. 19% of the people surveyed said they wouldn't trust the recommendation because they got the product for free. The take-away here is that some people seem to think that receiving the free sample affects the credibility of the recommendation (I wonder if this would also apply to the supermarket situation; this wasn't asked in their survey), while most others either don't worry about the fact the recommendation results from a buzz marketing campaign or feel that any bias is outweighed by the existing level of familiarity and trust they have in the person.

So, based on this survey, participation in a buzz marketing campaign doesn't seem to matter to the credibility of a recommendation. In the near future I'll be reporting data from a study that looks at the effects of institutional affiliation and participation in a buzz marketing campaign in much more detail.

Matt had some additional comments -- about what a buzz marketing agency's policy should be about the issue of disclosure -- which I'll take up in a subsequent post...


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