NEW YORK (AdAge.com) -- While working as a global marketing executive at American Express a few years back, Aliza Freud came up with an idea for her own company. Charged with running focus groups and compiling research data on products for the credit-card giant, she realized there was a significant disconnect between marketers and women.
SheSpeaks, Other Niche Agencies Get Marketers Listening
Focusing on a Specific Demographic Could Be Key to Staking a Claim
"It was clear that women were a very sizeable market," Ms. Freud said. "But when you asked them if they were happy with how advertisers and marketers spoke to them, 90% said they felt advertisers didn't understand them. To me that meant there was an opportunity."
And so the idea for SheSpeaks was born. Ms. Freud describes the agency, founded in February 2007, as a women's insight and word-of-mouth network. It works both sides of the marketer/consumer equation with a national network of more than 50,000 women between 18 and 60-plus, and creates communications programs, distributes samples, runs surveys, and tracks and measures results. It has worked for companies such as AOL, Philips and nail-care company OPI.
SheSpeaks represents the growing trend of demographic-specific agencies populating the expanding word-of-mouth landscape. A study by PQ Media found that marketers spent $1.4 billion on word-of-mouth marketing in 2007, up from less than $100 million in 2001. RepNation, which targets the teen-to-late-20s segment, and Mommy Clique are other recently formed specialty shops.
But is limiting itself to one specific demographic too much limiting for an agency trying to stake a claim? Many marketers and analysts say it's actually the best thing to do, including Peter Kim, a senior analyst at Forrester Research who specializes in word-of-mouth marketing. He said "mommy-blogger- and middle-aged-mom"-focused agencies in particular are forming in huge numbers.
"Is there a need for all of these agencies?" he asked. "I can't answer that. But when you see that many popping up it would lead you to believe there might be a market and some success with that demographic. You don't see a lot of senior-citizen word-of-mouth agencies popping up."
Ms. Freud argues that being highly focused on who you are helping a client target is what makes word-of-mouth effective. "Word-of-mouth works because you create a community that makes people feel special and connected to others that are like them," she said. "That's what allows them to engage, become brand experts and want to go out and spread the word."
Jim Nail, a Word of Mouth Marketing Association board member and chief strategy and marketing officer at TNS Media Intelligence, said that with so much activity going on in the word-of-mouth space, agencies need to be demographic-specific in order to differentiate themselves from the competition.
Paul Rand, CEO of Zocalo Group and another WOMMA board member, said the rise in specialty agencies will only help spur innovation within the segment. "They are forcing the development of new opportunities, tools, techniques and measurements, which is what's being demanded in word-of-mouth because it's maturing," he said.
Brandon Evans, managing partner of Mr. Youth, which spun off RepNation in 2006, said he thinks the industry lends itself well to highly focused agencies but thinks there's a limit to how many there should be. "Being able to specialize lets you build something the network finds more valuable, which ultimately the client will find more valuable," he said. "I don't think there's a need for a lot of different specialized agencies, but the ones that are out there play a key role."
Forrester's Mr. Kim said if he were a client looking for a word-of-mouth agency he would be suspicious of one that said it could connect him with anyone and everyone. "To create a genuine, authentic connection with a particular segment of the population you need an authentic and deep understanding of what their motivations and psychographics are," Mr. Kim said. "So if someone promises you they can connect you to mommy bloggers, millennial gamers as well as TV-watching seniors, you might want to be wary of that."