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WOM Campaigns (word-of-mouth marketing) as Drivers of Revenue

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WOM Campaigns - social conversations

WOM Campaigns – social conversations

Ad spending budgets continue to be under scrutiny as BTL (below the line) marketing and advertising strategies like buzz marketing or word-of-mouth marketing – more specifically well planned and executed WOM campaigns – keep proving to be cost-effective and extremely successful drivers of revenue.

WOM is still a relatively small sector, but it is growing fast. Spending on word-of-mouth (WOM) marketing from 2007 to 2008 rose 14.2% to $1.54 billion, and is expected to hit $3 billion by 2013, according to a report based on extensive WOM research from PQ Media.

By category, consumer package-goods marketers spend the most on WOM campaigns. Other leading product categories are food and drink, finance, business-to-business services, electronics, telecommunications and retail.

Why the surge in WOM? The number-one way that consumers make decisions is through word of mouth. Brands realize that consumers are willing to engage with them in conversation, and they realize that they have no choice but to participate if they want to be a part of the consumer decision making process. And WOM campaigns bear huge buzz opportunities across media platforms, both online and offline. Research shows that by far most (over 90 percent) of the brand-related WOM conversations that take place occur in the offline space. Increasingly, the goal of what brands and ad agencies do is to generate word of mouth.

According to research, some 3.5 billion brand-related WOM conversations take place daily in the U.S. And because clients are interested in knowing what’s being said about their brands, they have started to listen to the online conversation more frequently. There is also a direct correlation between advertising expenditure and word of mouth. As a matter of fact, word of mouth can be seen as an early measure of ad effectiveness and, across the board, the area that is most highly associated with sales lift is word of mouth because intent to buy reveals itself in word of mouth.

word of mouth offline

word of mouth offline

These figures are an eye-opener for a lot of people and they highlight the importance for brands to understand the full range of opportunities they have to listen and engage in conversations with consumers. There are many different ways and places to stimulate WOM including, for example, the workplace, leisure areas or in-store (not just supermarkets but gyms, malls, and even parks) as well as through traditional and emerging media channels. Clearly online is a major opportunity but it is not the only one to consider.

it's the journey

it’s the journey

Offline WOM More Prevalent, Positive and Credible than Online Buzz

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Word-of-mouth (WOM) conversations that take place in person and over the phone are overwhelmingly more prevalent than those online, according to research.

Also, face-to-face communication is more positive in tone, more likely to be judged highly credible and more likely to lead to strong purchase intent than online talk, the study found

Below, some of the findings issued

On average, 3.5 billion WOM conversations occur daily in the US. Offline WOM accounts for 92% of these (75% face to face; 17% by phone), and email, IM/text messaging and chatrooms/blogs account for a combined 7%:

Most Word-Of-Mouth is Offline

Most Word-Of-Mouth is Offline

Also:

  • Offline is the predominant mode of WOM across all age groups, ranging from 80% among the youngest group to 97% among the oldest
  • However, teens participate in a higher percentage of online WOM (17%) than members of other age groups.
  • Consumers under age 18 are also more likely than others to drive advice-giving in online talk. Though only 13% of offline advice-givers are age 13-17, 35% of advice givers in online conversations fall within that age bracket.
  • WOM expressed face to face and by phone also is viewed as highly “credible” more often than online talk (59% vs. 49%):
Offline WOM has more credibility

Offline WOM has more credibility

One possible explanation for the credibility gap is that online communications often occur between people who don’t know each other very well. But the study suggests that the credibility gap exists even in communications between people who are related or otherwise know each other.

Specifically, content from a spouse, relative or best friend is rated more believable when it is shared offline, either by phone or face to face, than online – via email, text messaging or blogs.

“Apparently, the value of eye contact, voice and perhaps even nonverbal communication provides a boost to credibility and to the likelihood that we’ll do something about what we’ve learned,” said Brad Fay, a coauthor of the study.

Other findings:

  • Offline communication has more purely positive content than online discussion (65% vs. 59%) and is less likely to contain negative or “mixed” content (23% vs. 30%).
  • A comparison between face-to-face communication and content on online blogs and chatrooms reveals an ever wider gap, with 66% of face-to-face communication “mostly positive” compared with 57% for blogs/chatrooms.
  • Offline WOM is more likely than its online counterpart to lead to strong purchase intent (50% vs. 43%).

About the study: Results of the Keller Fay/OMD study are based primarily on surveys of 18,486 Americans age 13-69, from late July 2007 through early February 2008.

True Indeed

True Indeed