Tuesday, January 31, 2006

Word-of-Mouth & Avoiding the Silo Mentality

Jonah Bloom, the executive editor of Advertising Age, writes a compelling piece that appeared yesterday on AdAge.com (free subscription required; also available here). After praising the Word of Mouth Marketing Association (WOMMA) for making "smart moves" -- 1) engaging bloggers by inviting them to blog about the recent WOMMA Basic Training conference and to participate in the ongoing discussions about the role of word-of-mouth, 2) taking a firm stand on ethics by standing against shill and stealth marketing, and 3) anticipating concerns raised by the FTC -- he also challenges WOMMA to avoid a marketing "silo mentality." He writes:

The once concern with all of this is that with the emergence of such a strong association and what seemed from the conference to be something of a new-members club of executives, we could be yet again witnessing the cultivation of a marketing silo rather than the full integration of a new philosophy and skill set.
Bloom's essay is important for at least two reasons. First, it helps us understand that WOM is not just a sexy campaign but rather a larger philosophy of monitoring existing consumer-to-consumer conversations, creating spaces for consumer conversations and listening to them, early and ongoing engagement, relationship-building, shared control with consumers and other stakeholders, creating products and experiences that are worth talking about, etc.. (Of course, the sexy and creative campaigns can be an activity that grows out of the larger philosophy). Second, Bloom's essays recognizes the need to adopt a systems approach to how organizations communicate both internally and externally (that is, a way of seeing how all the parts and processes are interdependent and need to work together in order to be effective). Bloom argues, and I agree, that without integrating WOM principles into the whole of an organization, WOM will be seen simply as a boutique activity.

At the WOMMA conference Bloom facilitated a panel discussion on the challenges and opportunities when companies seek to integrate WOM into their corporate philosophies. Panelists included representatives from Intuit, BzzAgent, and Conference Calls Unlimited.

Disclosure: I am a member of WOMMA's Advisory Board.


Wednesday, January 25, 2006

To Tell Or Not To Tell?: Question About If Inundation and Repetitive Experiences With WOM Agents Decreases Credibility

Over the past few days I've had the chance to talk with bloggers, journalists, and authors about findings in the "To Tell Or Not To Tell?" report. One issue that has surfaced in a couple of the interviews relates to what happens if, and/or when, people start to become inundated with agents who participate in organized WOM marketing programs; will non-agents become less accepting of the message? [Note that "agent" is being used here generically to refer to any participant in an organized WOM marketing program].

I wanted to reproduce a specific exchange I had over e-mail about this issue (it's actually a follow-up to my last post with Isaac from Chapell Associates). What follows is the question and then my response.

In the Ad Age article covering the release of your study, you're quoted as saying:
“There’s a sense if there’s an organized word-of-mouth marketing program there must be something interesting about it...There’s a sense that a company wouldn’t do this unless there was something interesting or new about the product.”
Correct me if I'm wrong, but part of this seems to be that consumers aren't used to being approached as part of a WOM program - so it seems important and exciting. This makes sense to me, but it makes me wonder: if WOM became more prevalent, and consumers got many a "recomendation" via WOM agent, would they be less accepting of the messages?

This is, to some degree, a question of inundation - how much WOM are consumers willing to accept? Are repeated experiences with WOM likely to increase or decrease their trust of the recommendations provided by WOM agents?
Here's my response:
Thanks for your question and you raise a valid point. First, let me respond with some background to the quotation that appeared on AdAge.com. I was asked to explain why I thought the number of pass-alongs (how many people a person told after talking with a WOM agent) was higher when there was disclosure. I think there may be three reasons: 1) conversational quality scores were also higher when there was disclosure (that is, those conversations were rated as more informal, personal, relaxed, and in-depth); 2) credibility scores were higher, specifically that there were higher ratings of trustworthiness (being genuine and ethical) and goodwill (feeling like the other person had their own interests at heart); and 3) there's a sense of being "in the know" when you receive information that's part of an organized WOMM program (because it might be a new product or something especially interesting about an existing one in order to warrant being part of an organized program). The AdAge quotation came from my explanation of this third point.

I provide this background because I think organized WOMM programs will only be effective when they incorporate the three bedrock principles of all WOM: trustworthiness, goodwill, and relevance. That is, WOM works because we feel the other person has our best interests at heart and we view them as a reliable, trustworthy source of relevant information.

In terms of your question about how much WOM are people willing to accept, I think we need to reflect on how WOM is being used here. WOM can be seen as part of a larger philosophy of engagement, listenting, responsiveness, involvement, etc. as well as a specific set of activities or tactics (such as a campaign). I think you're talking about the latter in your question and I don't know what the threshold is for exposure to organized WOMM campaigns. But again, I think it all goes back to if people perceive the program is facilitating the exchange of relevant, credible information within the context of a trusted relationship.

I also don't know if repeated experiences with a WOMM program lead to more or less credibility in a message or towards a specific person. But I think this one is easier to answer because it would probably be like any other experience and depend on the quality of the recommendation and the relevance of that recommendation to our lives. If people's experience with organized WOMM programs help them to make better decisions, feel more in the know, feel like they can help others better, etc., then I think repeated experiences will lead to higher credibility. If the converse is true then I think people will begin to lose any belief in the value of the organized WOMM programs.

One final comment, you write about people not accustomed to being approached by WOM agents, but I don't know if this is really how it works, at least based on my research. That is, it's not like agents are going around like a salesperson might, door-to-door, and trying to make contact with a certain number of people (granted, some participants might do this or some companies might encourage their participants to do this, but if they are, I think this is a very unwise approach). Rather, the brand-related talk is more likely to come up in relevant points of existing conversations. For example, based on some recent findings, only 24% of campaign-related WOM episodes were planned in advance by the agent, suggesting that 76% came up spontaneously, or at least without an existing idea that they were going to talk about it. And then we'd need to look at the 24% that were planned because an agent might be looking forward to telling someone about the brand, either because of a positive or negative experience with it (that is, as opposed to "plotting" a time to enter it into a conversation). So in sum, to the extent that agents are going up to people and talking about the brand when it's not relevant to the other person, or not a relevant point in the conversation, then I think there is a problem, and people will not accept this type of model and will have a strong desire to "tune out."
Thanks, and again, let's keep the discussion going!


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Saturday, January 21, 2006

Explanation for Counter-Intuitive Findings in "To Tell Or Not To Tell?"

I've had a great response from the blogosphere to my research report on disclosure and organized word-of-mouth marketing programs (see also the AdAge.com article). Some people are surprised by what seem to be counter-intuitive findings in the study, especially in terms of why consumers might not be more skeptical after learning of a person's commercial affiliation through their participation in an organized WOM marketing program. For example, Isaac from the Chapell Associates blog posted this:

I must to say I'm surprised by the report's findings. Intuitively, we like to think of recommendations as just someone liking a product and then telling others about it - "here, try this brand of coffee, I really like it," not "here, try this brand of coffee, the company that makes it tells me it's really good." To be totally honest: I can't see why consumers, having been told that someone has a commercial relationship with an advertiser, wouldn't be more skeptical of that person's recommendation.
Here's three reasons why I think credibility may be the same or higher when there is disclosure in an organized word-of-mouth marketing program (I presented some of these points in my talk at the WOMMA Basic Training conference on Thursday):

1) In a clear majority of the cases there was an existing personal relationship between the agent (a person participating in the organized WOM marketing program/campaign) and their conversational partner (the person with whom they were talking). In fact, the median length of time the two knew each other was about 6 years. That existing relationship implies a history of conversations about brand-related and non-brand-related topics. In those conversations that aren't related to the organized program the conversational partner builds up trust and credibility in the other person (the agent). Thus, the fact that the person/agent is participating in the program is contextualized by all the other conversations and history of their relationship. That is, in many cases, the conversational partner is likely to feel like it doesn't matter that the person is in the campaign because s/he has my best interests at heart, I know I can trust her/him becasuse of our other interactions, and I know s/he is providing information that would be valuable and relevant to me.

2) A second reason credibility is unaffected, or may even be higher, when disclosure takes place has to do with the fact that the act of disclosing affiliation might be interpreted as a marker of honesty and credibility. That is, the conversational partner hears the disclosure and realizes the person isn't trying to be deceptive or pulling something over on them.

3) Additionally, I don't think many of the conversations play out as the hypothetical scenario you created might indicate. You wrote:
"here, try this brand of coffee, I really like it," versus "here, try this brand of coffee, the company that makes it tells me it's really good."
I don't have actual recordings of the interactions but I do have narrative accounts. A more likely scenario might be:

"hey I got some new coffee from company x as part of this campaign I'm in. It's a bit strong for my taste but I think you'd like it."

Part of the point with my admittedly hypothetical scenario (I didn't use an actual excerpt because I wanted to keep it as close as possible to your example for illustration purposes) is that, while people do receive information about the product from the company, they also try it out for themselves and then tell others what they think about it. Thus, the participants are spreading WOM based on their own experience with the brand, product, or service not (just) what the company said.

Thanks for the comment Isaac!

Disclosure is a crucial topic in the word-of-mouth marketing industry so please pass-along the link to download the study to anyone who might be interested in reading the report. Let's keep the discussion going!


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Wednesday, January 18, 2006

To Tell Or Not To Tell? -- Research Report on Disclosure & Organized Word-of-Mouth Marketing Programs Now Available!

I am excited to announce that my research report on disclosure and organized word-of-mouth marketing programs is now available free of charge at my download page. The report is a result of a major industry-academic collaboration between BzzAgent, Inc. and Northeastern University.

My hope is that the report will stimulate discussion about the role of disclosure in organized word-of-mouth marketing initiatives and I invite thoughful commentary and criticism. If you are so inclined to blog about the report, please provide a trackback and a link to my download page -- http://www.waltercarl.neu.edu/downloads/ -- rather than uploading the file to your server. Also, please feel free to write comments to this post.

Below is a summary of the main findings...

• For approximately 75% of the conversational partners (the people with whom the word-of-mouth marketing agents engaged in word-of-mouth communication) it did not matter that they were talking with someone affiliated with a marketing organization. Instead what mattered was that they trusted the agent was providing an honest opinion, felt the agent had their best interests at heart, and were providing relevant and valuable information.

• None of the key outcome metrics (credibility, inquiry, use, purchase, and pass-along/relay) were negatively affected by the agent disclosing their affiliation. In fact, the pass-along/relay rate (the number of people a person told after speaking with a word-of-mouth marketing agent) actually increased when the conversational partner was aware they were talking with a participant in an organized word-of-mouth marketing program.

• In over 75% of the cases where a person learned about a brand or product from another source of information (such as a print, radio, TV, or web advertisement), talking with the marketing agent increased the believability of that other source of information. This finding was also unaffected by agent disclosure.

• Prior to the enforcement of the word-of-mouth marketing organization’s disclosure policy (where agents were required to disclose their affiliation in episodes involving an organized word-of mouth campaign), 37% of the conversational partners reported they did not know of the agent’s affiliation.

• For about 5% of the conversational partners who were not aware of the agent’s affiliation with the marketing organization there was a negative “backlash” effect when they found out. These negative feelings could be directed toward the agent, the interaction with that agent, the brand being discussed, and/or the company who made the brand, product, or service. There were virtually no negative feelings, however, when the conversational partner was aware of the agent’s affiliation.
... and key conclusions:
• Participation in an organized word-of-mouth marketing program does not undermine the effectiveness of word-of-mouth communication.

• Disclosure has practical business benefits. It does not interrupt the “natural” flow of conversation.

• Word-of-mouth marketing organizations should adopt a clear policy that requires disclosure. This policy should be implemented with a combination of both education about the practical business benefits of disclosure as well as enforcement procedures.

• Word-of-mouth marketing organizations should pay special attention to interactions with strangers and acquaintances as these relationship types were the least likely to know about agent affiliation and also more likely to have negative feelings when they did not know about agent affiliation.

• Policies regarding disclosure should go beyond requiring agents to disclose affiliation and should have special considerations to make clear the market research aspect of the business model.

Many thanks to all the agents and conversational partners who participated in this study!

Click on the links below for other posts on this blog regarding disclosure and word-of-mouth marketing:

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

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

- How Much Can You Trust Buzz?

- Do You Know of Video Clips about WOM, Buzz, and/or Undercover/Stealth Marketing?

- Faked Out By BK?

- Campus Ambassador Programs, Buzz Marketing, and Disclosure

- On Affiliation with a Buzz Marketing Agency, Disclosure, and Shopping in a Supermarket -- Part 2

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


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Monday, January 16, 2006

Sneak Peek at "To Tell Or Not To Tell?"

To coincide with WOMMA's Basic Training conference I'll be releasing a major report on disclosure and organized word-of-mouth marketing programs.

Starting January 18th copies of the report can be downloaded free of charge at my download page. A special page will be set up on my blog for comments and discussion of the findings.

My talk at the conference is entitled "To Tell Or Not To Tell?: Managing Effective Word-of-Mouth Marketing Programs Based On Why People Talk (and Listen!)"


Tuesday, January 10, 2006

Free Pass to WOMMA Basic Training Conference for a Worthy University/College Student

It turns out I had a winning bid for the charity auction to the Word of Mouth Marketing Association conference. I'd like to donate it to a student who otherwise wouldn't be able to attend the conference. Ideally this could be any interested student in a university or college, but given travel and hotel costs, it might be a student in the Orlando area. If you fit the bill send me an e-mail! If no one eligible contacts me in the next few days I'll donate the pass to WOMMA to use at their discretion.

Disclosure: I am a member of the WOMMA advisory board.

Thursday, January 05, 2006

Put Your Money Where Your WOMMouth Is!

Anyone interested in attending the Word of Mouth Marketing Association "Basic Training" conference in Orlando? It costs $795 if you're already a member or $1,095 if you're not a member. Or, you can bid your way in with all the proceeds going to a number of great charities (American Red Cross, The Prostate Net, Habitat for Humanity, Electronic Frontier Foundation, etc.). WOMMA is auctioning 20 passes on eBay and right now the bids are well below the prices quoted above. To learn more about the charity auction visit this page on the WOMMA website.

I just put in a bid for the Leukemia & Lymphoma Society. As a WOMMA Advisory Board member I won't need the pass if I win it so I'm happy to give it to someone who wouldn't otherwise be able to go. I'll know in a couple days and will provide an update on my blog.

Also, I'll be releasing a summary report from my latest research project on the practical benefits of disclosure in organized word-of-mouth marketing programs. The title of my report will be "To Tell Or Not To Tell? Assessing the Practical Benefits of Disclosure for Word-of-Mouth Marketing Agents and Their Conversational Partners." More details in the days to come...