In era of consumer control, marketers crave the potency of word-of-mouth

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Buzz marketing exists in a world of contradictions.

It's both a new way of thinking and a tried-and-true business practice. It's at the center of how messages spread, yet it doesn't fit squarely into any one particular communications discipline. It's commercial salvation to some, an insidious practice to others.

One thing that's certain is buzz, or word-of-mouth, is on the tip of the tongue of every marketer that's skeptical about just how effective its ad dollars are, particularly now that the age of interruption marketing has come and gone.

The new era of consumer control-marked by digital video recorders, portable devices like iPods and cellphones, and the proliferation of online media channels-is well-suited to take advantage of ordinary conversation, the kind of discourse that's actually heard above the din of competing marketing messages.

Over the past few years, a relatively small group of people and companies has given rise to a new trade by building on a couple of simple ideas: that everyday consumers are eager to talk about products and services they like, and that their endorsements are more credible, and thus more valuable, than traditional marketing communications like ads, public relations and direct mail.

Enter WOM as a versatile consumer-to-consumer marketing tool, both in and of itself, and as a way to add lift to the performance of traditional media. "It's cheap and effective," says Tony Kee, VP-marketing for video game maker Ubisoft, which uses "viral videos"-downloaded and passed around by gamers-among other community-building strategies. "We still use advertising for awareness, but for early buzz and endorsement, we use viral techniques."

Edgier brands like Ubisoft have known the value of buzz tactics for years, but what's new is that there's a full-fledged, multipronged effort to give WOM the trappings it needs to exist as part of a major marketer's processes. There are companies devoted to starting, harnessing and spreading brand-oriented chitchat (see related story below), and there are research companies formed to measure it. Perhaps most importantly, there's an effort to develop a common terminology and set of metrics for the practice.

At the center of this activity there's also a trade group, the Word of Mouth Marketing Association, whose membership has swelled to more than 200 marketers, agencies and research companies since 2004. About a quarter of that membership consists of marketers like DuPont, Best Buy Co. and SC Johnson-a proportion that could be as much as half by next year. That growth has come despite the fact that word-of-mouth doesn't fit neatly into marketer organizations and budgets.

"There isn't a clear marketing spend," says WOMMA CEO Andy Sernovitz. "This is not just about the marketing department. It could come from product design or customer service."

As a result, it's tough to put a dollar figure on the buzz industry or even to call it an "industry." While some specialty agencies and research shops have popped up, much of the revolution WOM is fomenting is within long-existing marketing institutions. Some of this is on the marketer side, where there are more rumblings of marketing or PR budgets being dedicated specifically to WOM; Dell has even named a word-of-mouth marketing manager.

But the more dramatic changes are evident in the large PR agencies, which are hustling to make sure what they see as a golden opportunity isn't snatched away by their historically dreaded foes, the ad agencies.

"It's a land grab," says Paul Rand, partner-global chief development and innovation officer at Omnicom Group's Ketchum, New York. Mr. Rand's agency has created Ketchum Personalized Media, devoted to new buzz-friendly outlets like blogs and podcasts. A rival, Edelman, is focusing on blogs too, but the independent PR giant has also created an account planner role focused on WOM strategies.

With few exceptions such as Starcom MediaVest Group's Reverb unit, ad and media agencies haven't been as aggressive in diving into WOM. "It just feels more like PR," Mr. Sernovitz contends.

As WOM's credibility within marketing circles has grown, so have more general concerns about whether some buzz techniques-such as campaigns in which consumers are paid to spread their opinions-provoke legal and ethical concerns. Last month, consumer advocacy group Commercial Alert formally asked the Federal Trade Commission to investigate Tremor, Procter & Gamble Co.'s teen-targeting word-of-mouth unit.

Says Edelman Exec VP Rick Murray: "We don't want to be the next spam."

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