E-word-of-mouth

A study of the strategies and theories underlying social media, viral marketing and branded communities By

Ming Zhao

WORD OF MOUTH

Personal source

Positive, and especially negative WOM have the ability to quickly become wide spread

Such effect is multiplied with online interactions

words can travel to many in a very short amount of time

Cost effective

http://www.sas.upenn.edu/~jgasper/courses/ABM/ViralMarketing.html

Currently Practiced Forms of Word of Mouth

Social media: blogs and podcasts (45%)

Social networks (42%)

Buzz/Guerrilla Marketing (25%)

Influencer Programs - 23%

Brand Experience Initiatives (21%)

Viral Ads (18%)

Brand Communities (16%)

Source: Agent Wildfire Research 2008

Brand/Customer Community-building WOM

Social Media Production/Outreach WOM (i.e. blogs, podcasts)

Social Network Production/Outreach WOM

Viral Marketing/Advertising WOM

What is social media? Wikipedia says: Social media are primarily internet-and

mobile-based tools for sharing and discussing information among human beings. The term most often refers to

activities that integrate technology, telecommunications and social interaction, and the construction of words, pictures, videos and audios. The interaction, and the

manner in which information is presented, depends on the varied perspectives and “building” of shared meaning among communities, as people share their stories and

experiences. Businesses also refer to social media as user-generated content or user-generated media.

Common social media applications

Social media marketing

SM Marketing relies on the audience to distribute and engage in the dialogue and sometimes the creation of additional content.

Its about engaging, communicating via a dialogue and interacting with people. More so customers.

Increasing traffic to a site by links, brand awareness and well attention.

You pay attention to what your customer/user wants and needs!

You do this by listening, interacting, chatting.

One does this by having a presence on social networking sites and channels.

http://wiki.beingpeterkim.com/

What is viral marketing ？

“Viral marketing refers to marketing techniques that use pre-existing social networks to

produce increases in brand awareness or to achieve other marketing objectives (such as

product sales) though self-replicating viral processes…It can be word-of-mouth delivered or

enhanced by the network effects of the internet” ---Wikipedia

Viral marketing

Simply relies on the audience to distribute the objective-Uses social networks like Facebook, MySpace,  Linkedin, Twitter to help achieve an objective…i.e sales, brand awareness, etc

This objective is obtained by a “Viral Action”. This action is people passing  on the content such as video, picture, an application, banner, heck even just word of mouth.

Bottom Line: Viral relies on the audience to spread the message with little or no interaction. Its a one time interaction.

Framework for viral marketing—M.R.Subramani and B.Rajagopalan, 2003HIGH: benefits to all users depend on size of user base

SIGNALING USE, GROUP MEMBERSHIPNormative influence

MOTIVATED EVANGELISMNormative influence

EXTERNALITY

AWARENESS CREATION, BENEFITS SIGNALINGInformational influence

TARGETED RECOMMENDATIONInformational and normativeInfluence

LOW: benefits to users only

RECOMMENDATIONROLE

PASSIVE ACTIVE

Three factors making things go viral

According to the “tipping point”

The law of few: the connector; the maven and the salesmen

The stickiness factor

The power of context

What is brand community?“Brand community is a specialized,

non-geographically bound community, based on a structured

set of social relations among admirers of a brand.”

(ALBERT M. MUNIZ, JR. THOMAS C. O’GUINN, 2001)

Advantages of building a brand community

DIRECT BENEFIT

Better insight and quicker feedback

Competitive intelligence / market needs

Prepare launches/market introductions

Runaway word of mouth/evangelism

Reduce customer support costs

INDIRECT BENEFIT

New distribution/selling/customizing channel

Superior innovation/solutions

Galvanize employee/vendor

Organizational wide costumer-centricity

Power of the community

Among community members:

91% believe community enables them to give candid feedback

82% were more likely to recommend the company to others

76% felt more positively about the company

Community users remain customers 50% longer than non-community users. (AT&T, 2002)

56% percent of online community members log in once a day or more (Annenberg, 2007)

Customers report good experiences in forums more than twice as often as they do via calls or mail. (Jupiter, 2006)

Categories of E-WORD-OF-MOUTH actions--John Eaton

Viral marketing refers to the practice of a marketer creating an internet promotional vehicle to draw attention to a brand, most often in the form of an email or website address link that is distributed online by consumers.

Brand community refers to a specific classification of a social network that revolves around a particular brand.

TWO MODELS OF INFLUENCE normative influencing

Where recipient behavior is based on interpreting the information provided by the influencer as an implied expectation to confirm.

Underlying mechanism influencing actions are:

Identification and compliance

Informational influencing

Where recipient behavior is based on a personal evaluation f the information provided by the influencer.

Underlying mechanism influencing actions are:

Internalization

other underlying theories

The law of the social few

Social information processing theory

Social presence theories

The 50-20-10-1 rule

50% of people will passively participate

20% will actively and frequently consume/trade content

10% chime in opinion/rate and vote on content

1%develop and innovate content

Conclusion and some questions for discussion

E-word-of mouth is more effective and persuasive than traditional marketing

There are disadvantages too:

negative e-word of mouth can snow ball more quickly than positive e-word-of-mouth

Is e-WOM marketing better for creating awareness for a brand or for inducing consumers toward purchase?

If you are the salesman for the “smart“ car, when consider social media marketing, will you prefer viral marketing to branded community strategy? And why?

In general, what is the context in which these strategies work and the characteristics of products and services for which they are most effective?|