It was a great pleasure to attend the Marketing Week Word of Mouth Conference’s afternoon session yesterday, with roundtable discussions on the topics of WOM marketing ethics, measurement and the ‘Next Big Thing’.

Ethics in WOM marketing have recently become a key area of debate. The starting point for the discussion was the American Word of Mouth Marketing Association’s (WOMMA) Ethics Code or Honesty ROI:

- Honesty of Relationship: You say who you’re speaking for
- Honesty of Opinion: You say what you believe
- Honesty of Identity: You never obscure your identity 

This code is particularly important for campaigns involving WOM agents, consumers who are incentivised to spread the word about a brand. Both roundtable participants and delegates agreed that ethics are crucial in WOM marketing, because WOM itself is built on trust. The lack of trust in traditional marketing evident among consumers of today underscores the importance of ethics and trust even more. WOM marketers better practice what they preach or deal with the consequences.

However, practical issues were also raised. For example, the natural contexts in which buzz agent chat about brands often arises is bound to certain rules of conversation that can make disclosure difficult or awkward (‘yeah, I really like this new drink – by the way, I’m a buzz agent…’). Viral marketing campaigns were also addressed. How does proper disclosure work for viral communications? Do companies clearly need to state who is behind them? Does it even matter?

More generally, participants and delegates questioned the need for strict rules imposed by an industry body versus letting an invisible hand take care of business, including the possible backlash of engaging in unethical campaigning: what goes around comes around. The compromise: neither strict rules nor no rules at all, but best practice guidelines…

The following discussion on WOM Measurement was not only about how-to’s, but perhaps more importantly why measurement is important.

BzzAgent CEO Dave Balter emphasized that measurement is crucial in selling WOM campaigns to clients who want to know their ROI. He implied—and I would agree with his view—that the future success and growth of WOM marketing will strongly (if not almost exclusively) depend on ROI measurement as its backbone. Balter used the example of a test and control study for a BzzAgent campaign that showed 26% sales uplift in 4 test cities compared to 8% in 4 control cities.

Clickadvisor and Brand Genetics director Dr Paul Marsden discussed how WOM campaigns initially have to be based on a measurement of the importance of WOM in a particular category. The next question is how much WOM can impact on the specific objectives of a campaign. Although the effectiveness of WOM can be measured on the basis of its reach, it is ultimately a means to the economic end of sales uplift.

Finally, there would be no proper marketing conference without a discussion of trends or the ‘Next Big Thing’. As we would expect, Web 2.0 and online social networking took centre stage. One interesting point that was raised was about the strength of weak ties. According to network theory, ‘weak ties’ (e.g. acquaintances or distant relationships) are key in spreading information from network clusters defined by strong ties to other tight clusters. Although information spreads more quickly within clusters made up of strong ties, weak ties are crucial for greater reach of WOM between clusters. And such weak ties are exactly what we have disproportionately represented in the online world!

Other topics that were debated: the need for a shift from individual WOM campaigns to ongoing conversations between companies and customers/consumers, as well as the importance of corporate reputation in the amplification of buzz. The latter may be an interesting variable to consider when assessing potential campaign impacts. For companies with bad reputations (e.g. based on unethical business practices), for example, negative events occur against the backdrop of their existing history and image. In a sense, reputation can be seen as an amplifying variable that moderates/mediates between an event and the generated WOM.

All in all, an informative and inspiring conference day.

If you’d like to learn more about the conference, visit:
http://www.centaurconferences.co.uk/conference.aspx?conferenceid=77572a97-cf03-496b-94fb-891438396463

A new Nielsen study with consumers from almost 50 countries shows cross-national levels of trust and reliance on different sources of information, including word-of-mouth recommendations.

The following are the top and bottom five countries based on levels of trust in advertising: 

Philippines  67%
Brazil  67%
Mexico  66%
South Africa  64%
Taiwan  63%
     
Latvia 38%
Germany  35%
Lithuania  34%
Italy  32%
Denmark  28%

A Herald Tribune article concludes the following:

The picture is not all doom and gloom for marketers or for media owners reliant on advertising, however. The study showed, for instance, that consumers in developing markets still have relatively high levels of trust in advertising, even if their counterparts in developed countries are more cynical. In the Philippines and Brazil, for instance, 67 percent of consumers said they generally trusted advertising.

This is a quite interesting theory. As a researcher, I would love to have the entire data set available and test whether countries’ level of development (e.g. based on GDP per capita, literacy, etc.) or post-industrialization (e.g. relative size of service vs manufacturing in the economy, Internet connectivity, etc.) correlates with trust in advertising. As my previous post on the role of WOM in China showed, there may be other cultural and economic variables that have to be taken into account.

Tradeoffs between trust in advertising and reliance on WOM are not a zero-sum game. Reliance on recommendations seems to have a strong cultural component, as shown by the following top five countries, all of which are Asian (and commonly considered more collectivist or interdependent in self-orientation):

Hong Kong  93%
Taiwan  91%
Indonesia  89%
India  87%
South Korea  87%

Note that none of the bottom five countries about reliance on recommendations are from the top five ‘trust in advertising’ list:

Hungary  68%
Latvia  68%
Lithuania  64%
Italy  64%
Denmark  62%

On the contrary, four of these (Latvia, Lithuania, Italy, Denmark) actually represent countries with consumers who are most cynical about advertising, perhaps indicating that people there generally have low trust in external sources of information.

Nielsen generated the following global ranking for consumer trust in different sources of information. Not surprisingly, recommendations from consumers and newspapers rank very high, whereas online banner ads and mobile phone text ads are the least trusted:

Recommendations from consumers 78%
Newspapers 63%
Consumer opinions posted online 61%
Brand websites 60%
Television 56%
Magazines 56%
Radio 54%
Brand sponsorships 49%
Email I signed up for 49%
Ads before movies 38%
Search engine ads 34%
Online banner ads 26%
Text ads on mobile phones 18%