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

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

The story behind the Benetton WOM Campaign

The story behind the Benetton Word-of-Mouth (WOM) Campaign

Benetton, Italy’s largest clothing company, launched yesterday, November 16, 2011, a highly controversial Word-of-Mouth (WoM) campaign. They coupled this campaign with the launch of their newly founded advocacy group for tolerance, the Unhate Foundation.

The campaign content included a film promoting Unhate.org, love and tolerance; photo composite posters and wall video projections of Presidents Barack Obama and Hugo Chavez lovingly locking lips; and, social media activity including the Kiss Wall where users can upload images of themselves kissing and are randomly paired up with others thus mimicking the main campaign theme. Other featured kissing pairs include President Obama and Chinese President Hu Jintao; the Pope and Ahmed Mohamed el-Tayeb, the Imam of al-Azhar mosque in Egypt; the leaders of North and South Korea; German Chancellor Angela Merkel and Nicholas Sarkozy, president of France; Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu.

Benetton Unhate Campaign – CNN Interview (subtitled in English) – Claudia Havi Goffan

The campaign was inspired by a kiss between Soviet leader Leonid Brezhnev and East German communist leader Erich Honecker in 1979. And this is just the first part of the three-part campaign. Benetton has a history of controversial advertising. Their campaigns that started on 1991, showed a black horse mating over a white one; a collage consisting of genitals of persons of various races; a priest and a nun about to engage in a romantic kiss; and the most famous of them all, a bloodied, unwashed newborn baby with umbilical cord still attached, which was featured in the reference book Guinness World Records 2000 as ‘Most Controversial Campaign.’

The White House stated that no advertising is allowed to use President Obama’s image while the Vatican condemned the campaign as well. The company’s deputy chairman, Alessandro Benetton, decided to remove it from all publications after complaints and an explanation that the campaign means not hating, and that embracing a loving attitude that can have a positive impact in the world.  The campaign is on every news site, blog, channel, all over the world. A true word-of-mouth marketing success.

The cost of such campaign via regular media purchasing methods would have meant an automatic dismissal amongst the management ranks of Benetton whose revenues had dwindled in the last quarter in Europe, where the company gets up to 80% of the total revenues. Their forecasted margins for the next few quarters look even bleaker with the expected increase in raw-material costs.

Shock tactics do work in advertising, and even though we haven’t heard much from the United Colors since their contentious ads and world take-over of their brand as one of the 90s’ most known and fashion forward, we know that Benetton has built their foundations on advertising equality and has come up with another genius concept here. We are sure there are already people reaching for their

Benetton WOM Campaign - Obama & Chavez Poster

Benetton WOM Campaign – Obama & Chavez Poster

phones to complain. This is a love it or hate it campaign. Their target market is very clear though. The urban young who wants to break with stereotypes and change the world into a better and more loving and accepting place.

We all know that the worst thing that can happen to a brand is not to be mentioned. Benetton got more than its share of mentions this time. All that we have left to see is their financials at the end of the next couple of quarters to see if it really paid off. And we believe it will.

 

By: Claudia “Havi” Goffan – President Target Latino – CNN en Español Interview – November 16th, 2011.

Watch the CNN Footage with Full Coverage of the Un-Hate Campaign

Interview with CNN Coverage of the Un-Hate Campaign in Spanish

speak the truth

speak the truth