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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Tags: WOM word of mouth Word-of-Mouth Marketing buzz marketing disclosure ethics

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!

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Tags: WOM word of mouth Word-of-Mouth Marketing buzz marketing disclosure

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.

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Tags: WOM word of mouth Word-of-Mouth Marketing buzz marketing disclosure

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.

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Tags: WOM word of mouth Word-of-Mouth Marketing

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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Tags: WOM word of mouth Word-of-Mouth Marketing buzz marketing disclosure

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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Tags: WOM word of mouth Word-of-Mouth Marketing buzz marketing disclosure

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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Tags: WOM word of mouth Word-of-Mouth Marketing buzz marketing disclosure

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!)"

Tags: WOM word of mouth Word-of-Mouth Marketing disclosure

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.

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...

Tags: WOM word of mouth Word-of-Mouth Marketing charity disclosure

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).

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This work is licensed under a Creative Commons License.




Tags: WOM word of mouth Word-of-Mouth Marketing

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.

Tags: WOM word of mouth buzz marketing disclosure

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

Tags: WOM word of mouth buzz marketing

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.

Tags: WOM word of mouth buzz marketing

WOMMA Basic Training Conference in Orlando

The Word-of-Mouth Marketing Association (WOMMA) will host their next conference -- Word of Mouth Basic Training -- in Orlando, FL, January 19-20, 2006.

I'll be speaking on Day 1. Here's the title and blurb for the panel, along with my fellow panelists:

Measurement 2: Why People Talk: Consumer Behavior and Word of Mouth

Walter Carl, Professor, Northeastern University
Kerry Stranman, Partner, Chief Strategist, MotiveQuest
David Fletcher, MD MediaLab, Mediaedge:cia UK

Learn how consumers interact in a word of mouth world. Discover what gets them talking, why they get active in discussions -- and why they don’t. Learn how to understand their motivations and how to measure them.

You can get a $100 discount by using the following code when you register: "speakerdeal"

Disclosure: I am an Advisory Board member for WOMMA and received an e-mail asking me to mention the conference on my blog, which I am happy to do :-)

Rumor, Gossip, and WOM: Response to Jeremy Depauw's Query

Jeremy Depauw posted the following query as a comment on my blog:

Am I correct if I think that WoM could also be risky as a rumors creator?

I'm really interrested in the ways organisations are able to make WoM a force instead of a weakness. I have to admit that during my Communication studies, most of the teachers used to focus on the negative way rumors and legends may interact with an organisation réputation and image.

It's really surprising to see that few information sources about Information Management (my resaerch fiel actually), as KM for example, don't consider WoM as you do. Maybe I'm wrong, but as far as I know (not so far by the way)it does not seem to be a major interest as a positive field of improvement in organisation IM.

I would be glad to have your opinion about that.

Thanks anymway.

Here's my response:

Hi Jeremy,

It might be helpful to differentiate rumour, gossip, and WOM.

I define a rumour as unverified information that is spread within and across informal, or emergent, networks. By emergent I mean those networks that are not prescribed by the organization chart but emerge organically. It sometimes takes a formal network or a formal source to authorize the information as legitimate. However, the grapevine communication is often faster, richer, and accurate, more often than not.

Gossip refers to evaluative, moral talk about an absent other. It tends to categorize others as a certain type of person, belonging to social categories such as jerks, studs, saints, etc.

In my research on WOM marketing, I define WOM as informal, evaluative communication about an organization, brand, product, or service, which may or may not include a recommendation. I further differentiate this between institutional (consciously managed by an organization) and everyday WOM. This obviously shows a bias towards "marketing" or "brand"-related content.

All three can be "risky" to the organization depending on how each is managed.

To the rest of your question, I think there IS a lot of interest for WOM and internal information management.

One of the foundational articles on informal, emergent networks is Keith Davis' article in Harvard Business Review from the 1950s ("Management Communication and the Grapevine"). But there are much more recent examples, such as the work of David Krackhardt (see his co-authored article in HBR from 1993 entitled "Informal Networks: The Company"). You may also be interested in the work of Rob Cross for his 2003 book entitled The Hidden Power of Social Networks: Understanding How Work Really Gets Done in Organizations. You may also want to read the work of Noshir Contractor who also is very active in this space.

Hope that helps!

Walter

How Much Can You Trust Buzz?

Scott Kirsner wrote an article that appeared in today's Boston Globe entitled "How much can you trust buzz?"

The article contributes to the ongoing discussion about social and ethical concerns surrounding buzz marketing and issues of disclosure. (See my previous posts on this: 10/24/2005 Part 1, 10/24/2005 Part 2, 10/25/2005, 10/28/2005, and 11/4/2005).

This article focuses on BzzAgent, and a book ("Grapevine: The New Art of Word-of-Mouth Marketing") recently authored by its founder and president, Dave Balter.

Apparently a number of volunteers affiliated with the agency, or BzzAgents, posted reviews on Amazon's website about the book, most identifying their affiliation with BzzAgent, but a small few who did not. According to the article, BzzAgent was able to determine that 3 of 4 people who didn't identify their affiliations were indeed part of the BzzAgent network. The article states that BzzAgent considers the activity of these agents "unacceptable" and that these Agents will face some type of disciplinary action.

Kirsner, the article's author, contends that since BzzAgent's business model is built on a word-of-mouth network, "it needs to get more serious about disclosure. It's one thing to ask agents to be honest and open, but BzzAgent would avoid more bad publicity, and do well by its clients, if it gave its disclosure policy some teeth -- kicking agents out of the network when they fail to disclose their connection."

It will be interesting to hear BzzAgent's response to this article. Their policies have developed over the years towards increasing disclosure to the point now that disclosure is required of BzzAgents. They also have a disciplinary program in place, which they call Pest Control.

Kirsner's point goes beyond just BzzAgent, however, because it is calling for something that is not layed out explicitly in WOMMA's Code of Ethics. That code requires disclosure of relationship, opinion, and identity, but does not currently provide guidelines for its member companies on disciplinary behaviors.

Stay tuned to see how these issues develop in the coming weeks and months.

By the way, you can read my review of Grapevine that I sent to Dave Balter, and which he posted on the BzzAgent blog back in September. In the interests of disclosure, I am not a BzzAgent, I have collaborated, and am currently collaborating, with BzzAgent on research projects regarding managed word-of-mouth marketing programs (some of the findings from an earlier project are cited in Grapevine), and I am an Advisory Board member of WOMMA.

Tags: word of mouth buzz marketing

What WOM Tells Us About Organizational Decision Making

A reader of my blog recently posted the following comment:

Good morning,

I am a (young)resaercher in the field of Information Management and Mass Media Studies. I have discovered (few days ago)the field of WOM.

My question is: In what way this field could be invovolved in the comprehension of the organisation decision-making process ?

Thank you in advance for your answer.

Regards

Jeremy
Jeremy Depauw | Homepage | 11.10.05 - 2:58 am | #

Here's my response (and I invite others to post how they would respond):

Hi Jeremy,

This is an excellent question. I'll just start a response here and invite others to contribute. You ask about how WOM can help us better understand how organizations make decisions (if I captured what you are asking correctly).

I think one way to answer that question is to think of word-of-mouth as a process of consumer-to-consumer communication (or substitute any appropriate term other than consumer, such as user, stakeholder, citizen, constituent, etc.; I'll use stakeholders). Many stakeholders want to be more involved in the decision-making process of organizations, or at the very least, feel "heard" or "listened to" by the organization. Organizations of all flavors should sieze on the opportunity to be responsive to this desire and involve their stakeholders in decisions that affect the stakeholders (such as product design, policies, etc.) and figure out ways to become partners in these conversations among their stakeholders (blogging could be one example, being responsive to any feedback is another, creating educational resources that stakeholders will find relevant to their lives, etc.).

Thus, the organizational decision-making process would potentially become more open and clear to those outside of the organization (what many call transparency), or even to those internal stakeholders as well (such as employees). In this process I think many organizations are realizing the line between internal and external needs to be blurred to facilitate this communication. For example, employees of an organization can often be the organization's best ambassadors.

This is certainly not a comprehensive answer, but just a starting point.

Thanks for your question and I invite you and others to contribute their thoughts!

Walter

Measuring WOM: Advocacy Drives Growth in UK Companies

Be sure to check out a study conducted by Paul Marsden and colleagues at the London School of Economics (LSE) on how advocacy drives growth in UK companies (PDF download of report). In their study, they replicated the use of the net promoter score for UK companies as a way of predicting revenue growth (the net promoter score is a measure that indicates how likely people are to recommend to others a brand, product, or service in comparison to those who are neutral or would recommend against the brand; a higher score indicates that more people are spreading positive recommendations than negative recommendations).

Here are some points I found interesting (I've also included some additional comments gleaned from an e-mail conversation with Paul about the findings):

1) The research was able to correlate the net promoter score with revenue growth in the UK companies. This represents an important contribution because it increases confidence in the link between WOM and revenue growth, and the utility of the net promoter score to predict growth in a culture outside of the U.S.

2) The average net promoter score for UK companies was much lower than US companies (3% versus 11%). The study didn't go into details to explain the difference, but speculating, the difference might be explained due to cultural differences in terms of WOM communication practices. For example, Paul brought up the example in US political campaigns where those in the US might be more likely to advocate while those in the UK might be more reserved or express more cynicism or criticism.

3) Negative WOM recommendations (e.g., "Don't buy X"; NWOM), on its own, predicted growth but positive WOM recommendations (PWOM) didn't. These findings are consistent with existing research on social influence that would suggest NWOM has more of an impact than PWOM. Though see some contrary evidence regarding positive and negative WOM from Robert East's work (Kingston University).

4) The study contends that WOM drives growth rather than vice versa. This is a little trickier since the study uses correlational data to infer causation, but the article does provide compelling evidence to support its claim. For example, the net promoter score correlated with growth figures in the same year, but growth from the prior year (2002-2003) didn't correlate with the net promoter score for the following year (from 2003-2004). It seems an even stronger case could be made if we had the growth figures from 2004-2005; the goal would be to see if these numbers are correlated with the net promoter score from the prior year (2003-2004).

5) The LSE researchers hope to extend their research into WOM advocacy as predictors of productivty (the "likelihood that employees would recommend working for their company to friends or colleagues") and share growth (the "likelihood that investors would recommend investing in a company to friends or colleagues"). I'm looking forward to learning more!

By the way, Paul is also an Advisory Board member of WOMMA.

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

I am compiling a list of video clips about WOM, buzz, and/or undercover/stealth marketing to be used for teaching and illustration purposes. Here are two to get the list started:

1. 60 Minutes segment on "Undercover Marketing" (October 2003)

2. "Triumph of the Shill" segment in The Corporation (2003)

3. "The Merchants of Cool" "Under-the-Radar Marketing", Chapter 2 of Frontline video (2002)

NOTE: These three clips obviously focus on the ethically suspect practices of undercover and stealth marketing, but I'm interested in video clips of all different forms of word-of-mouth marketing.

Please add in ones you know of through a comment. Thanks!