Monday, May 19, 2008

New Academic Research on WOM: The Role of Disclosure in Organized Word-of-Mouth Marketing Programs

As a follow-up to my earlier post, I am excited to announce the release of my latest journal publication on word-of-mouth marketing communication. This piece was published in the Journal of Marketing Communications titled "The Role of Disclosure in Organized Word-of-Mouth Marketing Programs". If this title sounds like a familiar topic for me you'd be right as it is the the academic version of my industry research report "To Tell Or Not To Tell?: Assessing the Practical Benefits of Disclosure for Word-of-Mouth Marketing Agents and Their Conversational Partners”" published in January 2006. At the time the research received a lot of attention in mainstream and social media being cited in Advertising Age, The Atlantic Monthly, The Boston Globe, and Business Week, among others.

The publication of the academic journal article also comes out at a fortuitous time and venue. By timing, I'm speaking of the latest legal and public policies coming out of the UK concerning the issues of transparency and disclosure in advertising and marketing practices By venue, I mean that the editorial board of the journal has a heavy contingent of UK and European-based scholars.

(By the way, see the Word of Mouth Marketing Association's position on this important topic. It turns out this new UK legislation was not targeted at organized word of mouth marketing programs in particular but it cast a much wider net in terms of unfair marketing and advertising practices in an effort to protect consumers from deception and other unethical practices).

OK, so to the content of the article. Here's the abstract:

Prevailing views of organized word-of-mouth (WOM) marketing programs suggest that disclosing corporate affiliation reduces perceived credibility and hampers campaign effectiveness. To test this view we surveyed WOM marketing agents and their conversational partners (CP) after a WOM marketing episode. Results indicate that when disclosure occurred – defined as when the CP was aware they were talking with a person participating in an organized WOM marketing program – agents were rated as more credible, CPs had fewer negative feelings about the agent’s corporate affiliation, and CPs told more people about the brand being discussed. These counter-intuitive results can be explained in part by the existing personal relationship between the agent and CP and invite us to consider how personal relationships may moderate the impact and potential business advantages of disclosure in organized WOM marketing programs.
If you read the To Tell or Not To Tell? report I STRONGLY encourage you to read the academic version of the article because it goes into a lot more detail and nuance about the research, the results, and the limitations.

The main difference is that the academic venue afforded more of an opportunity to underscore the importance that the underlying relationship plays in explaining the counter-intuitive results of the research. In fact the results that support the business case for disclosure -- higher perception of source credibility, higher relay rates when disclosure occurs (meaning more people were subsequently told about the product), and minimizing the potential for "backlash" if a person doesn't disclose but then the person they're talking with later finds out they were part of an organized marketing program) -- can be explained in large part by the pre-existing relationship between the people talking. The act of disclosure played a role in explaining the phenomena but not as much as the type of relationship between the people talking.

This implies that the same results may not be as salient when you're talking with someone you don't know very well, or at all, and disclose that you're participating in a marketing program. In these situations, because people may not know anything else about you as a person and your motives, then this disclosure may indeed diminish the program participant's credibility and diminish the perceived sincerity and effectiveness of the recommendation. And this is precisely the reason why there are consumer protections in place, and that's because non-disclosure may indeed make a difference in how people perceive the brand-related communication, even if there aren't any spurious motives (as in many things, perception is the reality).

But if you have an existing relationship (for example, friend, family member, co-worker) the act of disclosure is welcomed or a non-issue because this bit of information is contextualized by the history of all the other interactions the people have shared.

I believe there are a lot of significant implications to this research and underscores the importance of understanding the many contextual features that affect how people interpret each others' communication.

If you think you'd find this article interesting you can download it from the publisher's website here or a pre-press version from my download page (but if you're going to cite the paper be sure to cite the published version).