Word of mouth gaining respect of marketers

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Word of mouth is walking the talk.

A flurry of news timed to a conference that drew more than 400 participants-including a who's who of major consumer marketers-demonstrated that the nascent discipline is becoming an established branch of the marketing mix.

Johnson & Johnson, Motorola, Samsung, American Express and Procter & Gamble Co. were among those represented at the conference in Orlando, Fla., last week.

Perhaps the most important development was the release of research showing that word-of-mouth efforts don't need to deceive consumers to be effective. The question of whether participants in word-of-mouth campaigns should disclose their commercial affiliations has been a hot-button issue for consumer- advocacy groups and even the Federal Trade Commission.

Research released by Northeastern University assistant professor Walter Carl demonstrated a clear business interest for marketers that insist the ordinary Joes they enlist to spread goodwill about their brands disclose their commercial affiliation. Rather than being put off by the notion of a friend or relative engaging them with a commercial message, participants didn't seem to care. More than three-quarters of respondents called the affiliation a "non-issue."

Ethics code

And, Mr. Carl found, people who knew of an agent's commercial affiliation were more likely to register positive feelings toward both the agent and the company. The rate at which messages were passed along was 70% higher when that relationship was disclosed, he found.

"There's a sense if there's an organized word-of-mouth marketing program there must be something interesting about it," he said.

Mr. Carl conducted the study with BzzAgent, a Boston-based firm that maintains a network of consumers willing to engage in word-of-mouth programs on behalf of agencies and marketers. BzzAgent didn't initially require disclosure, but now does.

Much of the conference, organized by the Word of Mouth Marketing Association, focused on establishing standards and an ethics code, as well as how to institutionalize the discipline within marketing organizations. Word of mouth has garnered more attention from marketers in recent years as a cost-efficient alterative to traditional advertising and a way to amplify ad messages.

Dave Balter, founder-president of BzzAgent, said brands "are asking the right questions and managing this as a medium." Fifteen percent of Fortune 500 companies have executives responsible for word-of-mouth initiatives by his count. "We're out of the nascent phase," said Mr. Balter, who recently closed a round of venture-capital funding that brought in close to $14 million for his 5-year-old company.

Marketers are keenly interested in measuring word-of-mouth. Intelliseek was merged last week into BuzzMetrics, with Nielsen Media Research parent VNU taking a majority stake in the new company. And former Roper CEO Ed Keller, co-author of the book "The Influentials," announced a company, the Keller Fay Group, to track how word-of-mouth is spread offline. Keller Fay's signature product is TalkTrack, a service that will ask 100 Americans each day about the conversations they have about brands, media and purchasing decisions. Its first client is Publicis Groupe's StarcomMedia-vest Group.

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