Sunday, December 11, 2005

How Much We Do Word-of-Mouth Marketing As Part of Our Everyday Interactions

What percentage of all our conversations include talk about an organization, brand, product, or service?

Based on my research with college students (18-29 years of age) the answer is about 17.5%, on average. This is a little higher than the 13.5% I found in an earlier study (see "March 2005" results in the chart and below for details).

I arrived at these numbers by asking people to record all of the interactions they have over a 7-day period with people of different relationship types (strangers, acquaintances, friends, best friends, family members, romantic partners or spouses, or co-workers) as well as those interactions that include brand-related talk (what I call a "word-of-mouth episode"). The percentage of all interactions that include a WOM episode is called the E/I ratio. Learn more about the Total Interactions & WOM Episodes Woksheet and definitions of interactions and episodes (link opens PDF file in new window).

The chart above shows the results. "E" stands for WOM episodes, "I" for interactions, "E/I" for Episode to Interaction ratio (see NOTE 1 below), and "N" for the number of participants in each sub-set.

It's not clear why the "March 2005" numbers (collected during weeks in February and March 2005) are lower than the other months, which may suggest seasonal variation. The winter months may explain lower numbers of interactions but it wouldn't explain why there would be a lower percentage of those interactions involving a WOM episode. Another explanation could be the small sample sizes. Although outliers have been removed, a few individuals in each sub-set could skew the results.

If you want to see how your numbers stack up, I encourage you to count the number of your interactions and WOM episodes. Start with a day and see how it goes. If you want to try for the full 7-days feel free to download the TIWOME worksheet. To learn how these numbers compare to those people affiliated with a buzz marketing agency, see my Management Communication Quarterly article (link opens to my download page where you can access a pre-press version of the article).

Thank you to all of the students who have agreed to participate in this research!

NOTE 1: The E/I ratio is the average of all the relationship type x day of week calculations rather than simply the result of dividing the total Es by the total Is. Taking the average of the reltype x dayweek calculations is a more precise metric because it takes into account the variations across different relationship types and days of the week. See my Management Communication Quarterly article for more details.

NOTE 2: Please note that "WOM" is defined here as talk about an organization, brand, product, or service, but WOM can also be understood as a medium of informal, peer-to-peer communication which could be about a range of topics. For example, gossip about other people or work could also be considered WOM, but is not counted in the "WOM Episode" numbers (interactions involving gossip would be included as part of total interactions however).


Creative Commons License

This work is licensed under a Creative Commons License.


Thursday, December 08, 2005

Clarification in ClickZ's Story "BzzAgent to Agents: Spill the Beans, Or Else"

Pamela Parker covered BzzAgent's latest change in disclosure policy in a ClickZ article entitled "BzzAgent to Agents: Spill the Beans, Or Else."

I just want to clarify a statement she made in the article:

BzzAgent says its new stance stems from a study conducted by Walter Carl, a professor at Northeastern University. The report found that disclosure created trust, combated a stigma about "stealth" marketing, and increased the depth of product-related discussions. Carl came to his conclusions by examining 270,000 word-of-mouth reports submitted by BzzAgent volunteers.

While BzzAgent's white paper did reference findings from a collaborative study we conducted (details forthcoming in the weeks ahead as I write up the findings for academic publication), it was BzzAgent who conducted their own internal analysis of the 270,000 word-of-mouth reports.

Reference to preliminary findings from our collaborative study are specifically called-out in the white paper. Otherwise, the results stem from BzzAgent's internal research or other third-party sources.

Thanks to Pete Blackshaw's post for raising my awareness of the ClickZ story.


Tuesday, December 06, 2005

Special Topics Course On Word-of-Mouth, Buzz, and Viral Marketing Communication

I am excited to announce that I will be teaching a special topics course entitled "Word-of-Mouth, Buzz, and Viral Marketing Communication" at Northeastern University in the Department of Communication Studies, first summer session (May and June 2006).

To support the teaching of this course, and learning about WOM, buzz, and viral marketing more generally, I have created a new blog. The "Word-of-Mouth Communication Study" blog will still be my primary blog on WOM, but posts related to that class specifically, and educational efforts regarding WOM, more broadly, will be on the new blog.

Here is the course description:

CMNU914 -- Special Topics in Organizational Communication: Word-of-Mouth, Buzz, and Viral Marketing Communication

Have you ever loved a company, product, or idea so much that you couldn’t wait to tell others about it? Seen a horrible movie lately and told your friends not to go? Tried a new type of food because a friend suggested it? Heard a story about a town that named themselves after a start-up internet company? Passed along an e-mail about a funky chicken you can command at your will? Posted or read an online review to a consumer website? If you answered yes to any of these questions you engaged in word-of-mouth communication and may have also wittingly or unwittingly participated in an organized word-of-mouth, buzz, or viral marketing campaign.

Word-of-mouth, buzz, and viral marketing is a hot topic now as organizations of all kinds – for-profits, not-for-profits, academic institutions, you name it – struggle to break through a mediascape cluttered with advertisements, deal with a growing distrust of corporate-affiliated messages, figure out a consumer market that demands greater control and engagement, and try to understand how new communication technologies amplify peer-to-peer communication and influence, both in the online and offline worlds.

The purpose of this course is to introduce advanced undergraduate students to the word-of-mouth, buzz, and viral marketing industry. Students will learn about the theories and practices that inform this industry through readings of popular press books and academic journal articles, guest lectures from leading industry figures, analysis of existing word-of-mouth, buzz, and viral marketing campaigns, analysis of key companies operating in the word-of-mouth space, and learning industry best practices in designing, executing, and measuring organizationally-facilitated attempts to manage word-of-mouth and consumer generated media.

Specific topics include:

· Terminology issues: distinguishing word-of-mouth, buzz, and viral from other marketing and advertising practices
· Similarities and differences between organic (everyday) and amplified (institutionally-facilitated or sponsored) word-of-mouth.
· Historical overview of academic research on word-of-mouth
· How peer influence works. Are there really a small, select group of people who lead the rest of the population’s opinions? What is the role of relationship networks?
· Tracking online and offline word-of-mouth
· Metrics used to measure word-of-mouth and determine ROI
· How to build principles of effective word-of-mouth into business practices
· Emergence of the word-of-mouth industry associations
· Ethical controversies surrounding the industry: commercialization of chit-chat, undercover and stealth marketing, shilling

Pre-Requisites: Middler-year and above


Monday, December 05, 2005

The Practical Value of Disclosure in Word-of-Mouth Marketing Campaigns

Today BzzAgent has released a white paper (link opens PDF in new window) arguing for the practical value of disclosure in word-of-mouth marketing campaigns.

Their report is based on analysis of more than 270,000 reports filed by their WOM volunteers (BzzAgents) over three years, preliminary findings from our collaborative research project investigating dyadic (two person) or multi-party perspectives on the same WOM episode, and other third-party sources.

In short, BzzAgent concluded that "disclosure increases the validity of WOM interactions without reducing the breadth of campaign reach" (p. 2). More specifically they found that:

- Disclosure does not reduce WOM activity.
- Disclosure creates peer trust.
- Disclosure combats “stealth” stigma.
- Disclosure supports perceived product value.
- Disclosure increases depth and reach of product-related discussions.

I am currently in the process of writing up the results of our collaborative study for academic publication and will be releasing additional findings over the coming weeks and months. I will also be sharing some of these findings in my presentation at WOMMA's WOM Basic Training conference in January 2006.

It should also be noted that the findings from their white paper also led to changes in their disclosure policy. Here's a comment from BzzAgent's PR person that elaborates on their new policy:

BzzAgent also issued a press release today announcing the impact the conclusions in the whitepaper had on the company's business.

Specifically, the positive relationship between agent transparency and campaign performance has inspired us to strengthen our disclosure policy. Here are the changes BzzAgent volunteers can expect to see:

1.) New volunteers will be required to accept a Terms of Service prior to completing their registration.
2.) Agents that complete a report will be given the option of clicking a "disclosure check box" prior to submitting their WOM report. This box verifies that the conversational partner was aware of the agent's participation in the WOM campaign.

Please be sure to disclose. It's the right think to do from an ethical standpoint ... and now we know that it's also vital from a performance standpoint. Agents that do not disclose their affiliation will be required to participate in an online disclosure training -- similar to the BzzAgent "boot camps" -- prior to being offered access to future campaigns.

Keep in mind that the primary benefit to transparency is agent credibility. Revealing you are part of a BzzCampaign contributes to the legitimacy of everything you say and it underscores the validity of your opinions.