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  • 1. The Momentum Effect How Word of Mouth Marketing Builds Consumer Adoption and Evangelism Andrew Strickman, Ammo Marketing
  • 2. 14 Percentage of people who trust advertising information Source: Gallup, 2002
  • 3. 30,000 Number of commercial messages we see every single week Source: Walter Carl, Northeastern University
  • 4. 4 Number of commercial messages we act on per week Source: Walter Carl, Northeastern University
  • 5. 1:3 Number of brand, product and service recommendations from trusted friends we act on weekly Source: Walter Carl, Northeastern University
  • 6. 65 Percent: proportion of people who believe that they are constantly bombarded with too much advertising Source: Yankelovich Partners, 2004
  • 7. Today • The Evolution of Brand Experience • The Game Needs Changing • Never-Ending Friending • The Momentum Effect • Who Are Influencers? • A Few Real-Life Case Stories 7 • The Evolution of Brand Experience • The Game Needs Changing • Never-Ending Friending • The Momentum Effect
  • 8. The Evolution of Brand Experience Brand Then Advertising Purchase Experience Key Out take Brand Experience is the single most important thing we can facilitate - online, Advertising offline, via mobile, virtual Future Purchase worlds or branded experience Brand And when you deliver brand Experience experience, you drive Momentum 8 It takes very little time to demonstrate how consumers’ relationships with brands have evolved dramatically over the past decade The old model worked like this But the new model puts brand experience at the front of the equation — and in so doing disrupts the whole marketing model We’ve done a lot of work recently with brands such as Yahoo!, Brown-Forman and KPMG working out WHY this happens... Why consumers are suddenly becoming actively engaged with our brands BEFORE they purchase Key Out take Brand Experience is the single most important thing we can facilitate - online, offline, via mobile, virtual worlds or branded experience. And when you deliver brand experience, you drive Momentum
  • 9. The Evolution of Consumer Behavior • Marketing Model - Interrupt > Target > Interact > Add Value • Stories - Brand Tells > Consumer Chooses > Consumer Interacts > Consumer Tells • Power - Brand > Media > Technology > Consumer • Consumer-Brand Relationship - Acceptance > Reflection > Participation > Affiliation 9 • Marketing Model: Interrupt > Target > Interact > Add Value • Stories: Brand Tells > Consumer Chooses > Consumer Interacts > Consumer Tells • Power: Brand > Media > Technology > Consumer • Consumer-Brand Relationship: Acceptance > Reflection > Participation > Affiliation -
  • 10. And where does this all lead? To Ammo’s latest client: This trio of brand marketers could not figure out why they couldn’t sell any lemonade, even after they tried to give it away. As we say a lot, Free has no value anymore. The serious side of this is that - As consumers relationships with brands has evolved, so have their expectations A recent study from NOP suggests that whereas the most consumers expected from brands in the past was free stuff, now, inside knowledge, access and unique experiences related to the brand are valued much more highly At Ammo we call this ‘social currency’, information, access and experiences — the things that keep Influencers one step ahead of their peers — and the stuff that generates brand affiliation
  • 11. Has No Value And where does this all lead? To Ammo’s latest client: This trio of brand marketers could not figure out why they couldn’t sell any lemonade, even after they tried to give it away. As we say a lot, Free has no value anymore. The serious side of this is that - As consumers relationships with brands has evolved, so have their expectations A recent study from NOP suggests that whereas the most consumers expected from brands in the past was free stuff, now, inside knowledge, access and unique experiences related to the brand are valued much more highly At Ammo we call this ‘social currency’, information, access and experiences — the things that keep Influencers one step ahead of their peers — and the stuff that generates brand affiliation
  • 12. Adding Value Leads to Brand Affiliation Brand Experience ? Adding value to consumers through Participatory branded, interactive Media experiences Brand Affiliation 11 We know that Brand affiliation is actively sought by today’s consumers, from Coke in China to Nike in the US, from Halo enthusiasts to Radiohead fans The question is, how do we, as marketers, engage that affiliation? The only way to move from brand experience to brand affiliation is through adding value to things consumers care about, at the relevant times, in the relevant places and in unexpected but relevant ways. And the most valuable way of doing so is by engaging them in the conversation — online and offline, respectfully and transparently Ammo and our parent company Isobar set out to answer that question with a research study co-commissioned with MySpace earlier this year.
  • 13. Never Ending Friending Research shows that MySpace, YouTube, and Facebook account for a collective 14% of all time spent online. The Never Ending Friending study focused on answering the question of whether brands and brand marketing has a place in the social networking space. With all that time spent online, we wanted to understand what opportunities existed for brands to develop relationships with consumers when they were not only available, but when they truly welcomed the connection. The relationship that brands can develop with Social Networkers has become one of Never-Ending Friending — taking their relationship with brands in the offline world online and vice versa.
  • 14. Never-Ending Friending: The Facts • Two-Hour Qualitative Research Sessions with MySpace users - Three in Los Angeles & Chicago, Two in New York • Three age groups - Teens (aged 16-18) - College Students (20-22) - Young Adults (25-35) • Online Quantitative Survey - 3,000 Respondents • Teens, College Students, Young Adults - Social Networkers, MySpace Users, Non-Social Networkers 13 • Two-Hour Qualitative Research Sessions with MySpace users - Three in Los Angeles & Chicago, Two in New York • Three age groups - Teens (aged 16-18) - College Students (20-22) - Young Adults (25-35) • Online Quantitative Survey
  • 15. Never-Ending Friending: The Takeaways • Consumers are ready and willing to receive your brand’s message and promise online • They are willing to embrace the brand as a friend and introduce it to their “real life” friends • Your mode of communication and engagement is as important, if not moreso than the actual value of your brand or product • While “free” continues to have minimal value, opportunities to pass along brand connections/experiences to friends in the real world hold great “social currency” and deep emotional value • The result of successful brand outreach online leads to what we are calling The Momentum Effect 14 Consumers are ready and willing to receive your brand’s message and promise online They are willing to embrace the brand as a friend and introduce it to their “real life” friends Your mode of communication and engagement is as important, if not moreso than the actual value of your brand or product While “free” continues to have minimal value, opportunities to pass along brand connections/experiences to friends in the real world hold great “social currency” and deep emotional value The result of successful brand outreach online leads to what we are calling The Momentum Effect
  • 16. The Momentum Effect Value 15 Time Back in the “old days...” like, say 1996, marketers spent a bunch of money to reach consumers, and the minute that spend stopped, the value of it decayed quickly. Now, however, in the age of participatory media, of the ability to have conversations with your customers and to allow them the opportunity to create stories about your brand, the value of your marketing spend only increases over time. We call that, The Momentum E!ect, and it continues the return on your investment. When your B2C spend, can take advantage of the engagement of consumers, the value is much greater than the sum of its parts
  • 17. The Momentum Effect B2C Value D E C A Y 15 Time Back in the “old days...” like, say 1996, marketers spent a bunch of money to reach consumers, and the minute that spend stopped, the value of it decayed quickly. Now, however, in the age of participatory media, of the ability to have conversations with your customers and to allow them the opportunity to create stories about your brand, the value of your marketing spend only increases over time. We call that, The Momentum E!ect, and it continues the return on your investment. When your B2C spend, can take advantage of the engagement of consumers, the value is much greater than the sum of its parts
  • 18. The Momentum Effect B2C C2C Value 15 Time Back in the “old days...” like, say 1996, marketers spent a bunch of money to reach consumers, and the minute that spend stopped, the value of it decayed quickly. Now, however, in the age of participatory media, of the ability to have conversations with your customers and to allow them the opportunity to create stories about your brand, the value of your marketing spend only increases over time. We call that, The Momentum E!ect, and it continues the return on your investment. When your B2C spend, can take advantage of the engagement of consumers, the value is much greater than the sum of its parts
  • 19. The Momentum Effect B2C C2C The Momentum Effect Value 15 Time Back in the “old days...” like, say 1996, marketers spent a bunch of money to reach consumers, and the minute that spend stopped, the value of it decayed quickly. Now, however, in the age of participatory media, of the ability to have conversations with your customers and to allow them the opportunity to create stories about your brand, the value of your marketing spend only increases over time. We call that, The Momentum E!ect, and it continues the return on your investment. When your B2C spend, can take advantage of the engagement of consumers, the value is much greater than the sum of its parts
  • 20. Momentum Beliefs 16
  • 21. Momentum happens as people tell and evolve stories about a brand 1. Momentum happens as people tell and evolve stories about the brand Word of Mouth is the single fastest growing marketing discipline today. And the brands that will win in this space are those whose consumers tell the best stories. Global clients like Coke, Yahoo! And Beam have their own marketing divisions focusing on WOM According to NOP WOM (Word of Mouth) is ‘the single most important factor in brand decisions today,’ outstripping TV advertising by 30 percentage points, and internet marketing by 54 points.
  • 22. Experience Briefs: Stories and Experience NEW OLD What experiences do What message do I my Influencers seek, want to communicate and how, uniquely, can to my consumer so that my brand add value to they understand my those experiences, brand so that they desire to become participants 18 As the myspace study said: ‘friends don’t waste your time - they tell you things you want to know’ In the old world you wrote a creative brief: the objective of the project and a singular message you wanted the consumer to understand New world: what experience of value can we create for our consumers that engages them more deeply with us and allows them to actually take ownership of the brand’s story
  • 23. Value Ingredients Value of Message + Value of Experience + Value of Communicator = Value of Program Short Term Long Term Sales, Awareness, Image Brand relationship The equation we need to solve, is how to maximize the value of the message with the value of the experience, amplified by the value of the communicator to demonstrate the value of a marketing program, both in the short term and the long tearm
  • 24. Momentum cannot happen without interactivity, period. It requires at the least dialogue, and preferably deep and extended consumer-brand interaction Momentum cannot happen without interactivity, period. It requires at the least dialogue, and preferably deep and extended consumer-brand interaction But, all interactive media will not be equal in generating Momentum
  • 25. Interactive Momentum Drivers Model User State Active Influencer VIP Creating Program Content Transactional Shopping Site Contest Entry Website Using SN Site Branded Widget Blogging/ Podcast mobile Search Mo Podcasting Listening me IM ntu Interactive IM m Experiential Online Gaming Website Addressed Need Interactive Download Viral Videos Banner Content En ga Functional ge me Forward Link/ Video/ Content Entertainment nt Information Gathering Notice Guerrilla Activity Aw a ren es s Viewing Content Viewing UGC Watch TV online Non-Interactive Banner 21 Passive Active Entertainment is essential for the development of Momentum. Because Influencers require Active Entertainment, our integrated marketing campaigns must leverage this learning to ensure we drive not just awareness and engagement, but real Momentum.
  • 26. Flip the Model 10% quot; 90% If momentum is so important to the effectiveness of a marketing program then the majority of marketing spend should be aimed at ensuring momentum We do that by flipping the model... This means flipping the marketing mix on it’s head: from 90:10 (traditional to non-traditional) to 10:90 where the 90% is aimed at driving brand interactivity – online (digital) and offline (experiential and Influencer) (Tell GAP and Yahoo story) And, it means changing the focus from driving awareness, to driving product and brand experience
  • 27. Flip the Model 10% quot; 90% If momentum is so important to the effectiveness of a marketing program then the majority of marketing spend should be aimed at ensuring momentum We do that by flipping the model... This means flipping the marketing mix on it’s head: from 90:10 (traditional to non-traditional) to 10:90 where the 90% is aimed at driving brand interactivity – online (digital) and offline (experiential and Influencer) (Tell GAP and Yahoo story) And, it means changing the focus from driving awareness, to driving product and brand experience
  • 28. Momentum is not generated equally by all people. Influencers generate a disproportionate amount of Momentum. Momentum is not generated equally by all people. Influencers generate a disproportionate amount of Momentum. Research consultancy Keller Fay estimates that INFLUENCERS generate up to ten times the positive WOM vs the general population
  • 29. Who are Influencers? The Power of a Few Can Affect A Brand’s Health, Growth and Sales
  • 30. What Makes Influencers Tick? Mindset for An active approach to life passionate people Success Connected Enthusiasm for learning they keep up Passion for Life Connections to many people and groups People People Clear set of priorities “this matters” Doers Strong belief in growth and change Innerly Confident Impact ability to create change Socially Altruistic 28 Sources: Ammo Marketing, Influencer Index; Roper The first step in finding the right influencers for a brand is to understand what makes them tick — what characteristics do they all share that sets them apart? In 2004, Ammo conducted research with Highwire Consulting a British business psychology firm to better understand what drives Influencers, why they are so good at making the right recommendations to the right people at the right time. That research fueled the creation of the Influencer Index, a proprietary tool we use to screen large numbers of potential influencers for enrollment in our programs. Funnily enough, almost at the same time Ammo was conducting research, Roper NOP was also, and found parallel characteristics.
  • 31. Understanding Influence Vocal Peer Uber Celebrities Adopters Influencers Influencers Numbers 1:5 1:10 1:10,000 1:1,000,000 Currency Lifestyle Social Economic Fame Channels PI Network Informal Work Controlled Circles Varies Wide, Many Work-based VIP Knowledge Surface Deep Expert Surface Use Broadcast Involve Seed Endorse Person Club-goer Muso DJ Bono Agency PR Ammo Ammo Prod. Place 29
  • 32. We’re Not The Only Ones Saying This... 30 So, what was the first book to really prove the effectiveness of Influencer Marketing? “God told him to gather seventy men of the elders of Israel and use them to spread the word to the rest of the people” —The Bible “Simply by finding and reaching those few special people who hold so much social power, we can shape the course of social epidemics” —Malcolm Gladwell. The Tipping Point “This is the bottom line: when Americans make decisions today, it’s a conversation. Before Americans buy, they talk. And they listen. The first step in the buying process is to ask a friend or family member.. what they think.” —Jon Berry, The Influentials
  • 33. We’re Not The Only Ones Saying This... 30 So, what was the first book to really prove the effectiveness of Influencer Marketing? “God told him to gather seventy men of the elders of Israel and use them to spread the word to the rest of the people” —The Bible “Simply by finding and reaching those few special people who hold so much social power, we can shape the course of social epidemics” —Malcolm Gladwell. The Tipping Point “This is the bottom line: when Americans make decisions today, it’s a conversation. Before Americans buy, they talk. And they listen. The first step in the buying process is to ask a friend or family member.. what they think.” —Jon Berry, The Influentials
  • 34. We’re Not The Only Ones Saying This... 30 So, what was the first book to really prove the effectiveness of Influencer Marketing? “God told him to gather seventy men of the elders of Israel and use them to spread the word to the rest of the people” —The Bible “Simply by finding and reaching those few special people who hold so much social power, we can shape the course of social epidemics” —Malcolm Gladwell. The Tipping Point “This is the bottom line: when Americans make decisions today, it’s a conversation. Before Americans buy, they talk. And they listen. The first step in the buying process is to ask a friend or family member.. what they think.” —Jon Berry, The Influentials
  • 35. 30,000 So let’s return to some of those numbers from the beginning of the presentation. Number of commercial messages we see every single week Source: Walter Carl, Northeastern University
  • 36. 4 Number of commercial messages we act on per week Source: Walter Carl, Northeastern University
  • 37. In an Age of overload - who do you listen to? In an age of increasing media fragmentation, media sophistication and media overload the consumer, eventually shouts STOP! With no definitive place to turn, no one trusted source of information - whoever trusts TV commercials these days? - they revert to the most trusted, most credible sources they know - their friends And not just any friends, their friends and peers who are, in some way, expert on a particular topic or set of topics - the Peer Influencers in their social circles
  • 38. 1:3 Number of brand, product and service recommendations from trusted friends we act on Source: Walter Carl, Northeastern University
  • 39. Even when surrounded by the same bad brand message over and over, a consumer will take their trusted friend’s recommendation above all other
  • 40. Word-of-Mouth Can Lead to Brand Advocacy • 76% of Americans talk about brands in a typical day • An average of 10 brands are mentioned every day • 70% of brand mentions include a recommendation WOM used to be the result of successful marketing, now it needs to be planned into the marketing strategy. Source: MediaVest Keller Fay Group Study | W-O-M TalkTrack Marketing: Why Everything You Thought You Knew About Buzz is Wrong 36 These facts come from a recent study by Keller Fay regarding the REAL opportunity for word-of-mouth marketing 76% of Americans talk about brands in a typical day An average of 10 brands are mentioned every day 70% of brand mentions include a recommendation
  • 41. How Do We Define WOM(M)? WOM COMMON WOMM Already happens Communicate like Program driven a consumer Organic Time-bound Over time Listen & Show You Listen What do you want to start? Do you want Be Transparent Advocacy to participate? Not “perfect science” first, then Be ready! Amplification 37 Courtesy of the Coca Cola Company A company that is taking a lead in the exploration of this new frontier is one of the oldest, sturdiest brands in global marketing history. Coca Cola uses this slide internally to discuss where the company wants to be •Digital doesn’t 100% define it; is an enabler
  • 42. Most WOM Is Face-to-Face 72% Of Marketing-Related Conversations Take Place … In-Person The remainder are: 1. Phone (18%) 2. Email (3%) 3. Instant or Text Message (3%) 4. Online chatroom or blog (1%) 5. Other (3%) Base: 53,748 Conversations 38 Now this is what I call my “fighting words” slide, especially in the realm of digital marketing. Currently, research shows that when two consumers have a conversation about a brand, 72% of the time that conversation happens FACE-to-FACE Of course their is plenty of digital chatter about brands online, but how much of it is capturable and expandable? Thankfully, for all of us in this room, that number dropped almost 10 percentage points in the last year, and continues to slide. The challenge is: as digital marketers, how can we make more time for our brands to be experienced online and taken through conversation to the offline world?
  • 43. Getting it Right. Generating Momentum Right Value - Story + Experience Right Place - Media Right Balance - Media Mix Right People - Influencers 39 Getting it Right. Generating Momentum Right Value - Story + Experience Right Place - Media Right Balance - Media Mix Right People - Influencers
  • 44. How Do We Get It Right Online? • Deep understanding of the consumer — their motivations, their process for selection, their online behavior • Figure out what matters and add value to existing experiences that amplify the brand • Use technology to enable and amplify the conversation — allow consumers to “badge” themselves in ways that heighten their social currency with those closest to them 40 Deep understanding of the consumer — their motivations, their process for selection, their online behavior Figure out what matters and add value to existing experiences that amplify the brand Use technology to enable and amplify the conversation — allow consumers to “badge” themselves in ways that heighten their social currency with those closest to them What Creates Awareness but not Value? Banner ads Silly online diversions Podcasts
  • 45. Interactive Momentum Drivers Model User State Active Influencer VIP Creating Program Content Transactional Shopping Site Contest Entry Website Using SN Site Branded Widget Blogging/ Podcast mobile Search Mo Podcasting Listening me IM ntu Interactive IM m Experiential Online Gaming Website Addressed Need Interactive Download Viral Videos Banner Content En ga Functional ge me Forward Link/ Video/ Content Entertainment nt Information Gathering Notice Guerrilla Activity Aw a ren es s Viewing Content Viewing UGC Watch TV online Non-Interactive Banner 41 Passive Active Entertainment is essential for the development of Momentum. Because Influencers require Active Entertainment, our integrated marketing campaigns must leverage this learning to ensure we drive not just awareness and engagement, but real Momentum.
  • 46. A Few Real Life Case Stories • The Heidies • Chambord Influencer Program
  • 47. This year, The Heidies won the Gran Prix at the Cyber Lions at Cannes.
  • 48. Many of you have probably seen this bottle. I would also wager that you’ve probably had a drink featuring the deep-flavored black raspberry liqueur from France: perhaps in a Chambord and Champagne or the omnipresent French Martini. The 25-year-old brand has long-suffered from a crisis of identity that makes it the most frequently seen, dusty old bottle on bars across the United States. Bartenders don’t use it because they don’t understand it. You might be surprised to learn that Chambord is all natural; that it’s made from the finest black raspberries, madagascar vanilla, moroccan citrus peel and French XO Cognac. It, in a simple phrase, has a great story to tell But before Chambord could be marketed to consumers, it had to be embraced by those on the frontlines: the
  • 49. In order to spread this story of quality, refinement and craftsmanship in an effective way, Ammo hired brand ambassadors in 10 cities across the U.S. to reach out to these Influential bartenders, managers and nightlife insiders. The ambassadors were the perfect combination of bartender-empathist, marketing professional and outgoing, gregarious Influencer. Their role was to activate existing social and professional networks to identify and develop a relationship with the most influential bartenders in their market.
  • 50. Ammo’s mantra has long been “surprising, yet relevant.” We don’t do things the way other agencies do. Instead of sending a brand ambassador into a bar to conduct a 10-minute brand training session before the start of a shift, we developed a wholly new, immersive educational experience called The Chambord Sessions. The function of the Chambord Sessions was to bring small groups of Influencers together to talk about their craft in a unique environment — either a hotel suite or private loft space that surrounded the experience with the luxury message the brand is constantly communicating. During the course of the session, Influencers’ beliefs about the brand were challenged by serving a series of cocktails that demonstrated the brand’s versatility: no one knew, and everyone was surprised by the delicious alchemy created when Chambord was paired with bourbon, or tequila or gin.
  • 51. And then, bartenders were set loose in a fully stocked bar-kitchen environment where they were able to bring their newly-found knowledge to bear on new cocktails, which were captured and have become part of the brand’s ongoing R&D efforts.
  • 52. Results • 1,197 Influencer contacts were reached, versus a pre-program expectation of 760 • 94% agreed or strongly agreed Chambord that is a brand that they would recommend; 73% agreed or strongly agreed that they were using it more often • Volume in accounts covered by the program increased by +14%, with re-order rates up by +17% 49 • 1,197 Influencer contacts were reached, versus a pre-program expectation of 760 • 94% agreed or strongly agreed Chambord that is a brand that they would recommend; 73% agreed or strongly agreed that they were using it more often • Volume in accounts covered by the program increased by +14%, with re-order rates up by +17%
  • 53. Thank You! andrew.strickman@ammomarketing.com