Monday, February 12, 2007

Predicting the Future of Connected Marketing

Along with a number of other folks, I've been contacted by Justin Kirby, co-editor with Dr. Paul Marsden of Connected Marketing: The Viral, Buzz, and Word of Mouth Revolution, to comment on whether or not the predictions for the future of connected marketing he made at the end of that book were right or wrong or have come true or not. He made the following 10 predictions in 2005 (my thoughts on each below):

1. Connected marketing will become more strategic, with the focus shifting from promotion (creating remarkable campaigns) to innovation (creating remarkable products).

I believe that CM will become more strategic. Some early companies seemed to experiment with WOM initiatives, especially more on the promotion end, because they may have had some extra money around from a media buy that wasn't spent. Other companies had a very intuitive sense of the role of WOM and factored this in to their strategic decision-making but weren't necessarily very formal or explicit about it. Now, however, I see much more thought going into how WOM initiatives are part of an integrated program. I would say that since companies may have experimented with promotional strategies early on that more money will be shifting into the insight and innovation aspects, but I think that smart companies will figure out that insight, innovation, and promotional goals are all important, at various times and to various degrees. Of course, my empirical base of information on this is anecdotal because there isn't yet continuously-tracked industry data about this. I'd love to see the Word of Mouth Marketing Association track the resource allocation of this, perhaps in concert with other industry associations.

2. ROI metrics will be mandatory for viral, buzz and word of mouth campaigns. ‘Advocacy rates’ and ‘sales uplift’ will become important parts of ROI metrics, displacing traditional measures such as campaign reach.

Indeed, that's definitely a take-away message from the second volume of Measuring Word of Mouth (published by WOMMA; disclosure: I edited the volume). There is increasingly more demand for accountability and ROI metrics. I still think campaign reach will be a factor, though, because companies will want ways to compare their WOM initiatives (especially more of the "promotional" variety) with other media and marketing channels and initiatives (and old habits are well ingrained). I think what you'll see is a metric that provides a sense of the relative value of a conversation versus another kind of media impression. I do agree with you that sales uplift will definitely be important and I think increasingly we'll see agent-based models used to help assess the role of WOM relative to other media and marketing channels to assess that. Further, we'll see greater refinement of advocacy metrics, especially those related to intention to recommend and actual recommendation behaviors.

3. Word of mouth tracking will become a key metric in brand tracking market research.

Yep, absolutely. And yep, we're seeing this as companies like Nielsen BuzzMetrics, Cymfony, BrandIntel, Keller Fay, etc. see their client lists grow. See Nathan Gilliat's blog for more details.

4. Buzz, viral and word of mouth marketing will be merged into the wider marketing mix, with online viral marketing adopted and integrated within advertising, word of mouth within promotions and buzz within PR.

Yes and no. I think buzz, viral, and WOM will be merged into the ongoing operations of the firm, across many different areas. Yes, online viral marekting will be integrated within advertising, but I think even more traditional advertising messages will need to take into account the pass-along effects of WOM in order to calculate their true value (there's a great article by Hogan, Lemon, and Libai on quantifying the ripple effect of advertisements and tying it to a customer lifetime value approach). But I wouldn't limit "word of mouth" to just promotions (I guess it depends on definitions here as you use "connected marketing" as the umbrella term and I use "WOM" as an umbrella term). For example, I consider WOM to also be a source of innovation and customer insight. I think PR will take up buzz strategies but equally important is figuring out ways to engage their stakeholders in a variety of environments, such as discussion groups, blogs, online and offline communities, etc.

5. Managing and avoiding negative word of mouth, online and offline, will be an increasingly important area in connected marketing.

Yep, absolutely. And not enough attention has been paid to managing NWOM. A good bit of this can be done in managing the service recovery process but also in tracking and learning from existing WOM, especially regarding innovation.

6. Online branded entertainment (advertainment, advergaming, alternate reality games) will be used more as key brand touch-points for entertainment brands.

I think so, but we're seeing it used beyond entertainment brands as well. Check out some of the case studies on the websites of PodDesign and M80 for example.

7. Techniques developed in connected marketing initiatives will be adopted for change management and internal communication.

Yes, indeed. Internal blogs can be a great knowledge management tool. Enabling and empowering employees (principles of WOM) is important so that they have the tools and skills to create effective relationships with customers and other stakeholders (though see Chapter 6 of the book Loyalty Myths [pp. 153-168] for some important cautions about the relationship between employee performance and customer loyalty and profitability).

8. Techniques developed in viral, buzz and word of mouth will be increasingly adopted in CRM programs as both retention and acquisition (turning buyers into advocates) tools.

It would be great to use CRM programs in this way. It's especially important to think about segmenting customers appropriately and designing CM initiatives that are tailored for them.

9. Cell phones will develop rapidly as an important medium for spreading connected marketing promotions, such as mobile invitations, SMS barcode discounts, etc.

Yes, I think we are starting to see this. I think it will be important to distinguish. though, how much of cell phones, as a medium, are being used in "push" versus "pull" programs.

10. Marketers will eventually be able to locate influencers by zip/post code, by which point they will be all chasing the same chosen few… Prepare for another paradigm shift in marketing?

Of course, influencers differ by product category, not just by zip/post code, but I think your point is that as methods to identify influencers become more "efficient" (from the firm's perspective) they may be overloaded with programs. I think what continues to remain important is providing programs that are strategically in line with the company's goals, relevant to the participants involved, and that leverage motivations for why people spread positive WOM (for example, altruism, status, personal and social expression after a delightful experience, reducing risk and uncertainty, etc.).

Interestingly I noticed that there were no predictions about any of the ethical concerns regarding disclosure, commercialization of chit-chat, and working with minors. These were hugely important issues for the industry, and will continue to be, so I'd add that in as well. I know you have a lot of thoughts on this so I'd encourage you to add it is as part of your assessment.

Good luck with your article. I'm anxious to see what others say and what your own reflections are!

UPDATE (2/13/2007): If readers of this blog would like to contribute their own thoughts on Justin's predictions then feel free to do so at the Connected Marketing site by contributing to this survey.

UPDATE (2/19/2007): My comment about the lack of predictions regarding ethics doesn't imply that Justin doesn't have a position on this important topic. Interested readers should read his final chapter in the Connected Marketing text where he addresses the topic of ethics and connected marketing programs. My comment was only pointing out that ethics wasn't mentioned specifically in the 10 predictions, not that Justin didn't cover the topic of ethics in his chapter.