Friday, February 17, 2006

Do You Believe? A Social Critique of Organized Peer-to-Peer and WOM Marketing Efforts and Its Practical, Business Implications

In my research on organized word-of-mouth and peer-to-peer marketing efforts I have written about some of the social and ethical concerns that have been raised by the increasing use of organized programs to stimulate brand-related word-of-mouth and "buzz." In my experience the critiques generally revolve around four issues:

1) participation of minors (under 13) as participants or targets of marketing efforts (family protection and consumer watch groups are especially concerned here);

2) disclosure (whether people are aware they're talking with someone who is either being paid or rewarded for their participation in an organized program; this relates to stealth and/or shill marketing);

3) the commercialization of chit-chat (everyday conversations and/or relationships becoming more commercial in nature), and relatedly;

4) "corporate colonization of the life world" (the thesis that corporations and business interests have an ever-expanding presence in our daily discourse and premises for decision-making).
One person who has raised some of these important critiques of organized peer-to-peer, WOM, and buzz marketing programs recently interviewed me about my research. Her name is Kate Kaye, a free-lance writer and author of Sales Pitch Society and the Lowbrow Lowdown website. She and I have had a number of fascinating discussions where we have found areas of common ground as well as points where our perspectives diverge. One issue we talked about concerns whether the social critiques stem from the form of organized WOM marketing efforts (peer-to-peer in the context of everday life), the content of the message that's being shared (corporate brands), or is it a complex interaction of both?

From my reading of Sales Pitch Society she is especially concerned that, among other things, everyday people are unreflectively becoming "brand vessels" by participating in corporate-sponsored marketing programs. In making this critique she compares and contrasts corporate-sponsored peer-to-peer marketing efforts with grass-roots evangelical efforts (whether the goal of the latter is to spread the teachings of Jesus or to protest globalization). She argues that in grass-roots, evangelical efforts people deeply believe in the message they're spreading. But she wonders if the same applies to corporate-sponsored or affiliated WOM marketing program participants. She writes:
What does that say about our society and the mindset of the people living in it if they do feel strongly about the sponsored word they’re spreading? What does it say about them if they don’t? (Sales Pitch Society, p. 31)
This question about belief in, and loyalty to, the message is one that some marketers may not always reflect on. Kate makes a compelling case to consider it on moral grounds, and I'd like to suggest there are practical business reasons for doing so as well (ah, see how easy the corporate colonization sneaks in)...

Companies that want to employ WOM and peer-to-peer marketing initiatives should think about whether the people who are participating in the program really believe in the brand, their membership in a community of others who participate in the organized program, both, or if deep belief in the brand is even desirable.

More concretely it comes down to perceptions of credibility (trustworthiness, sincerity, and competence/expertise). Companies should think through:
- whether the participants are sharing their opinions and recommendations just because they're getting paid or rewarded for it (a possible inference that others might make, especially when there is no existing relational connection to contextualize their involvement in the program);

- if the participants have a stronger belief in the community of participants with which they are affiliated more so than the brand they're talking about (especially if there is a concern that there are competing loyalties or that participants don't possess sufficient category expertise to warrant a knowledgeable recommendation);

- or if the company even wants to work with people who are highly loyal to a particular brand (because they may be seen to be too invested in their recommendation, might come across as too "strong" in their views, or might not interact enough with others outside a well-defined social network).
There is some empirical work that has been done to test out the effectiveness of different philosophies and business models when it comes to belief and loyalty to the message, but much more to do. However in addition to the empirical work we need to create and maintain a space for critical work that explores the moral dimensions and social consequences of the increasing use of WOM and peer-to-peer marketing efforts.

Kate is currently writing a companion, follow-up piece to Sales Pitch Society (for which I was interviewed and look forward to read). Interested readers should also check out her LowbrowLowdown posts on the Word of Mouth Marketing Association's Conference in Chicago (04/08/2005) and Commercial Alert's letter to the FTC (11/04/2005).


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Friday, February 10, 2006

Industry-Academic Collaborations; Picking Up on Comment by Spike Jones

As part of The Basement's discussion about the "To Tell Or Not To Tell?" report, Spike Jones, from Brains on Fire, made the following comment on Matt Galloway's post regarding the the validity of the report to the broader world of word-of-mouth marketing (WOMM):

Hey Matt,

Good post. And, as you probably know by now, I'm not a BzzAgent fan, but I am - on the other hand - a Dr. Carl fan.

Here's my question about the study: Do you think the results would have been different if they didn't use BzzAgents? Something triggers my radar here. The BzzAgent model is a unique one, that much I agree on, but I can't help but think that this study was funded to validate that model instead of looking at the world of WOMM outside of BzzAgent.
I wanted to respond to Spike's comments about the purpose of the study, its funding, and the broader generalizablity or applicability to other business models because these are all important issues in any research project, but especially with academic-industry collaborations. But first I want to thank Spike for being a "fan" and say how excited I am to use the Brains on Fire case study for Rage Against the Haze in my WOM class this summer (to learn about their case study go to the Brain's On Fire website, click "Work" then "WOM" then the first case study in the lower-left-hand corner) :-)

Purposes of the Study. There were three purposes for my most recent collaboration with BzzAgent: 1) To test a new set of outcome metrics that are more consistent with the WOMMA Terminology Framework (credibility effect related to other information sources, inquiry, purchase, use, and pass-along; by "new" I mean that my first study didn't include these); 2) knowledge of institutional identity (meaning were the conversational partners aware that they were talking with a person affiliated with a marketing company and did this make a difference in the outcome metrics?); and 3) differences between the everyday WOM behavior of agents/program participants and their institutional (or campaign-related) behavior. (Additional articles or research reports will discuss findings from the other areas beyond disclosure of institutional identity).

I mention these multiple goals because they are informed by a theory I'm developing about organized WOM (more generally), the testing of a specific business model, as well as a test of the WOMMA Terminology Framework (to my knowledge this is the first academic-industry study to explicitly situate the study in the Framework's terms; disclosure: I was on the drafting committee for this Framework). So two things here: 1) yes, one purpose of the study was to test aspects of the BzzAgent business model, but it would be incomplete to just say that; and 2) the sword cuts both ways in terms of validation as part of an academic research project. That is, findings might invalidate the business model as well as validate it. Results get reported whether they are favorable or unfavorable to that model (and the TTONTT report has both).

Funding. Initial funding came from an internal grant I received from Northeastern's Research & Scholarship Development Fund (thanks to the Provost's office), and this covered the cost for the conversational partners' portion of the study. BzzAgent covered all the costs on their end related to the Agent participation. Of course, even if the company funded the full study as part of an academic research project then the same principles of reporting results that would validate or invalidate a particular business model would still apply. Exceptions sometime apply to any proprietary information but this factor gets disclosed as it becomes relevant and doesn't compromise the integrity of the results for this study.

Speaking of funding, I have another parallel study ready to go that seeks to investigate the same outcome metrics and WOM communication dynamics for "everyday people" without any organized WOMM program involved. So far I have only had funding for university students so if any company or foundation out there wants to further our understanding of everyday WOM through a nationally representative sample, just let me know! :-)

Generalizability or Applicability to WOMM. Any study has limitations and the unique business model investigated here is no exception (I discuss some of the more relevant limitations on p. 20 of the report). To validate the findings they need to be replicated with the same business model at a different time, and with different business models (and I'll be the first to acknowledge the value of doing so). Further, the results need to be peer-reviewed as is standard practice with academic work, which is why TTONTT is called a "summary report" and Footnote 1 states that academic journal publication constitutes official reporting of the results. And in specific response to one of Spike's questions: I do think we should expect to see differences in some of the outcome metrics and how program participants are viewed (for example, as existing customers, as category experts, etc.) depending on the business model, so this is another reason why additional models need to be studied.

But here are some ways I think the study does have applicability beyond the specific BzzAgent business model:

- I think the importance of disclosure applies to WOMM firms that have their own ongoing community of participants (like BzzAgent or Tremor or Vocalpoint) as well as those who work with different sets of category influencers for each campaign (like Matchstick or M80 or Brains On Fire) [Addendum, 02/11/2006: Please see Spike Jones' comment to this post about my grouping of these companies]. Further, I would suggest that companies who work with their own existing customers as part of organized programs (without an outside company to help them) would still benefit from campaign disclosure. (I mention some of this in point #10 on p. 18 of the report.) I think disclosure issues may be slightly different based on different models, but this will be the subject of a later post.

- I think the report points to the importance of the existing relationship as a factor in source credibility and perceptions of an ulterior motive. I'll be developing this in an academic article to tie in with research on the Persuasion Knowledge Model and the Social Consequences of Interpersonal Influence Model (opens into 3MB PDF file).

- It also points to the fundamental principles of all WOM, whether it is organic or organized: relevancy, trustworthiness, and goodwill.

- It provides a test of the WOMMA Terminology Framework and contributes new terminology to refer to "Participants." Specifically I think the Terminology Framework needs generic terms to distinguish between those who participate in organized WOMM programs or have an affiliation with a marketing company and those who do not. I propose we use "everyday people" and "program participants" (I used "agents" as a generic term in the TTONTT report but think "program participants" is even more inclusive).

- I think there are some other issues as well but stay tuned for more research on those!

Thanks to Matt and Spike for the opportunity to contribute additional thoughts!


Thursday, February 09, 2006

Response to Matt Galloway: "Should WOMM Agents Talk To Strangers?"

Matt Galloway over at The Basement posted about the "To Tell Or Not To Tell?" report on disclosure and organized word-of-mouth marketing (WOMM) programs. He wondered whether or not an implication of the report's findings was that WOMM agents shouldn't talk to strangers. He writes:

So while Dr. Carl's recommendation is to encourage disclosure, it seems to me that equally good advice is for agents not to talk with strangers.
Matt bases this conclusion on the findings that 1) trust is already lower in stranger relationships and 2) because there isn't a relationship history to contextualize the affiliation with a marketing company, it might be best to just avoid interactions with strangers.

I would like to agree and disagree. That is, I think interactions with strangers can be appropriate, but under certain conditions. First, I think stranger interactions should be avoided in terms of randomly going up to strangers and striking up a conversation specifically in order to generate WOM and without consideration of the other person's needs. This seems strikingly similar to invasive advertising models that WOM-friendly folks are working against.

Second, I think engaging in interactions with strangers that emerge coincidentally are more acceptable, as long as there is a) relevancy gleaned from category knowledge and/or experience, b) taking the other person's needs into consideration, and 3) disclosure of program participation. For example, suppose a participant in an organized program is at a store and somebody comes up to that person to ask them a question about something. I don't see any reason why a program participant wouldn't talk with that person as long as they say they are part of a program (assuming the program they are part of is relevant to the question being asked). Or in a situation where a program participant happens to overhear people talking about a product and helps them out. The trick here is that strategically positioning oneself as a "plant" or lurking around certain areas to wait for such "coincidental" conversations to happen seems suspect to me.

To illustrate this point consider situations where people are just genuinely motivated by altruism, even in interactions with strangers. For example, Steve Hershberger from ComBlu sent me a really interesting behavioral study on "Evangelist/Customer Impact in the Liquor & Wine Industry" (Steve said I could make it available for download; opens into PDF file). In the study they described one customer of a local wine shop who loved to be in the store and help others pick out wines. While he was shopping himself he would look around and if he saw someone struggling or looking lost he would go up to help them out. After trying to figure out what their needs and interests were he would make a relevant recommendation. (It was through some of these questions related to the use of the product, in this case, wine, where a level of trust was built). In a situation where the stranger was still skeptical he might even go so far as to buy a single bottle of the wine for a person out of his own pocket, just so the fellow consumer could benefit from the wine. The ComBlu case study goes on to report interesting findings about the business implications of such evangelist behavior (apparently the small store had four or five patrons who did similar things), but there are interesting points to learn here for organized WOMM campaigns.

This wine shop situation seemed appropriate because the person was sincerely passionate and knowledgeable about the product category (and not just about a single product that's part of the campaign), had the other person's best interests at heart, and provided relevant recommendations to a stranger who would clearly benefit from information. Now, if this person was also a participant in an organized WOMM campaign and discloses their participation right from the start, then why not talk to strangers? Everything here is consistent with the bedrock principles of WOM which are trustworthiness, goodwill, and relevancy (based on prior knowledge and experience).

So, to sum up, stranger interaction for organized WOMM programs seems acceptable under the following conditions:

1) the participant is sincerely passionate and knowledgeable about the product category;
2) provides relevant information and recommendations to people who would clearly benefit from the information; and
3) discloses their participation to the stranger right from the start.

I'm not naive to think that every WOM program participant will go through all of this, but I think some would. And if they don't fulfill these criteria, then Matt may just be right and program participants shouldn't talk with strangers.