Welcome, Guest [Sign In]

February 2007 - Strategy Magazine
Media

Pass it on: Canada's WOM ROI earns its own budget line

by Patti Summerfield
page 28

People always have and always will talk about companies and brands. What has changed is how marketers can influence these conversations and better measure their impact.

Why is word-of-mouth so crucial now? Patrick Thoburn, cofounder of Toronto WOM outfit Matchstick, says it's because consumers don't trust companies. "A recent study from North Carolina-based Yankelovich saw that 76% of consumers don't believe that companies tell the truth in ads. That's why we're trying to leverage the conversations that take place among trusted friends within their social networks."

It's a given that peer-to-peer, third-party recommendation and endorsement of brands can be more valuable than paid advertising. And while the ways and means we communicate may become less personal, human nature doesn't change. Whether it's via message boards or IM, people still share their opinions. Breaking through with mass media continues to get harder. But as cyberspace makes it easier to reach a wider audience via digital dialogue, word-of-mouth (WOM) is attracting big-name followers such as Unilever, Procter & Gamble, Nokia, Philips and AOL. And that's forcing some science on the process.

"Any media form at this point has to have direct ROI. WOM has always been considered a viable concept. If you get WOM, that's wonderful. If you get positive WOM it's very good. What has changed is the capacity to organize, manage, and measure it," says Dave Balter, founder and president of Boston-based BzzAgent (bzzagent.com). "What we're talking about is helping marketers understand that this, as a media form, is able to be done in an extremely measurable way."

Becky Bolt, AOL Canada's senior manager of corporate communications, says the launch of its new AOL Radio service late last year was the perfect opportunity to explore the WOM marketing arena and start a conversation with consumers. It also wanted to be one of the first brands to harness WOM in Canada.

AOL's WOM program is part of an integrated effort that includes advertising, PR, and outreach to music blogs to promote AOL's free radio service, which offers 200 commercial-free channels. (AOL does place ads on the radio's onscreen tuner rather than within the content.)

The campaign involves 1,500 buzz agents. Five weeks into the 10-week run, Bolt says 1,600 buzz hits (brand conversations) were reported with 90% of the feedback very positive. In addition to spreading the word, AOL is finding that the WOM effort with BzzAgent is also a great way to fine-tune the new product. "It's also good to read the negative feedback so we can respond to it, or to make sure we're clearly communicating to the consumer that yes, this is really free - not free with an asterisk."

Bolt, happy with the results, says AOL will continue to use WOM as part of the mix for other web-based products.

Although many believe WOM is only effective for the introduction of new products or services, Balter says WOM is a strong vehicle for providing continuing support of a brand, as evidenced by BzzAgent's North America-wide program (November and December 2006) for Philips' Sonicare electronic toothbrush.

Quick Search