No one feels greater pain in a "do more with less" economy than marketers. For many, social media seemed to be the silver bullet, but according to CMOs surveyed by IBM, metrics have been hard to come by. "Half of all CMOs feel insufficiently prepared to provide hard numbers [for a return on social-media marketing]," according to the study.
In this brave new marketing world, word-of-mouth, the overlooked stepchild of marketing, deserves renewed attention. The following are three useful insights around this timely tool.
A white paper by marketing-analytics expert MarketShare provides concrete evidence that consumer word-of-mouth about brands directly drives sales by amplifying the impact of advertising and marketing of all kinds.
The analysis looks at brands in four categories -- beverages, auto, investments and brokerage -- and seeks to determine how much impact "social voice" (defined as both online and offline word-of-mouth) has on marketing and sales, when compared with a range of other variables that might drive engagement and interest.
In the cases studied, social voice increased marketing effectiveness up to 54%, and a 10% increase in social voice resulted in a sales lift of up to 1.5%. Also, offline WOM had a more significant impact on buying outcomes than social media.
You've heard before that early adopters are among the most-influential people for your brand. Now there's evidence that Hispanics are the ones leading many of the nation's water-cooler conversations. In the second quarter of 2012, McKinsey's Quarterly Report indicated that Hispanic buying power was growing substantially. According to the report, it had reached $1 trillion by 2010 and is predicted to chart continued growth through 2015 to $1.5 trillion.
In recognition of the group's growing importance to advertisers, ESPN Deportes commissioned us to conduct a study of both English- and Spanish-speaking Hispanics to monitor word-of-mouth. The study revealed significant results for advertisers:
The CMO of Coca-Cola, Joe Tripodi, has called on marketers to deliver tools that measure the "expressions" generated by marketing, not just the traditional eyeball impressions delivered. This goal will be achieved in 2013 by data-fusion products being released.
A presentation that CBS Chief Research Officer David Poltrack recently delivered showed that the audiences of five programs -- "American Idol," "Modern Family," "Two and a Half Men," "Big Bang Theory" and "X-Factor" -- each reach more than 600 million brand conversations every week, more than twice the number of people in the entire population. The opportunity for marketers to turn those conversations to their own advantage, by seeding content that stimulates face-to-face influence, is enormous.
Indeed, TV and traditional online platforms, not online social-media networks, are the dominant drivers of word-of-mouth conversations. Perhaps the greatest achievement of social media has been to turn marketers' attention to the virtue of "shareability." In 2013, shareability will go mainstream as all forms of media trumpet their power to drive word-of-mouth. This will encourage marketers to plan more "talkworthy" advertising campaigns and cash in on ROI heretofore not possible.
So in 2013 and beyond, consider word-of-mouth as not just "nice to have," but a game-changing element of today's marketing mix. Creating a strategy to embrace it will be the way marketers win in coming years.