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Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
Keller fay conde nast arf paper 3 24-10
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Keller fay conde nast arf paper 3 24-10

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  1. Return on Influence From Buzz to Buy Ed Keller Rachel Swanson CEO Associate Director Keller Fay Group Consumer Insights Condé Nast
  2. Background • Marketers are increasingly turning to “word of mouth marketing” as a strategy to grow brands – The meteoric rise of social media has propelled an interest that was already strong • With rising interest in word of mouth comes new questions – WOM matters, but is there a proven link to sales? – What is the role of media in stimulating word of mouth? • Traditional media as well as social media – What is the role of, and the true value of, influencers?
  3. Two Starting Points for Our Investigation 1. The Role of Advertising in Word of Mouth • About 20% of word of mouth is stimulated by advertising – About 700 million ad-influenced word of mouth impressions for brands each day in America • The effectiveness of word of mouth is substantially increased when stimulated, encouraged, and/or supported by advertising – The presence of advertising in word of mouth conversation increases the probability by ~ 20% that a consumer will make a strong recommendation to buy or try a product Source: Keller Fay article in Journal of Advertising Research (June ’09):
  4. Two Starting Points for Our Investigation 2. The Value of Influencers • The “reach effect” – Their word of mouth is 2x – 8x vs. the average – Makes marketing more efficient, effective • The “acceleration effect” – They accelerate product adoption, thereby improving profitability • The “amplification effect” – Advertising messages go further via word of mouth – Certain media have advantages in reaching influencers Source: Keller Fay’s TalkTrack®
  5. Condé Nast Wanted Answers to the Following Questions • How – and how much – does WOM inform consumer choice? • What role does media play in stimulating WOM? • What is the true value of WOM? Can it be calculated?
  6. Investment Return On Influence
  7. Methodology: Multiple Data Sources • Online survey of women magazine readers – N=1,026 women 25-49, HHI $50,000+ – Screened for readership of at least one of 19 magazines (see next page) • Unique methodology to interview 230 “peers” of magazine readers – Friends/family/colleagues with whom members of primary sample had recent word of mouth conversations – Email addresses provided by respondents and automatically contacted via email by Keller Fay for online interview – “Closes the word of mouth circle” re WOM impact (including sales) • Nationally representative sample of women ages 25-49, HHI $50k+ – N=4,640 – Drawn from Keller Fay’s TalkTrack®, serves as benchmark group • Academic consultant: Dr. Barak Libai – Specializes in economic valuation of consumer social interactions – Associate Professor of Marketing, Tel Aviv University
  8. Methodology National Primary Sample (Magazine Readers)
  9. Female Magazine Readers More Up-to-Date on New Trends % of Magazine Readers vs. Total Women Who Closely Follow Each Category for “What’s New”* Total Women Magazine Readers Pts. Difference 60% Household Products 39% 21 60% Personal Care & Beauty 43% 17 49% The Home 34% 15 49% Shopping, Retail & Apparel 42% 7 56% Food & Dining 51% 5 43% Children's Products 38% 5 Base: Respondents from TalkTrack®, July 2008 – June 2009, Total Public Females ages 25-49 with HHI $50K +, n=4,640; Total Panel Sample (Women’s Magazine Readers), n=1,026 *Magazine readers and total public all female aged 25-49 with household income of $50K+
  10. Female Magazine Readers: Give More WOM Advice % of Magazine Readers vs. Total Women Who Give Advice in Each Category* Total Women Magazine Readers Pts. Difference 49% Household Products 30% 19 49% Personal Care & Beauty 32% 17 34% The Home 23% 11 41% Shopping, Retail & Apparel 32% 9 53% Food & Dining 47% 6 38% Children's Products 32% 6 Base: Respondents from TalkTrack®, July 2008 – June 2009, Total Public Females ages 25-49 with HHI $50K +, n=4,640; Total Panel Sample (Women’s Magazine Readers), n=1,026 *Magazine readers and total public all female aged 25-49 with household income of $50K+
  11. Magazines Inform WOM and Are Important Part of Brand Conversation Information Mentioned in Sources Conversations TV ads 25% 9% Magazine ads 22% 6% Online ads 16% 6% Newspaper ads 12% 5% Social Media 9% 3% Direct mail 7% 3% Direct email/text 6% 2% Radio ads 4% 1% Base: Total Panel Sample (Women’s Magazine Readers), n=1,026 *Magazine readers and total public all female aged 25-49 with household income of $50K+
  12. Magazine Readers Have Larger Social Networks Number of People Communicate with Fairly Often 25 1/3 23.8 more people 18.3 9.6 20 15 6.7 6.0 4.8 10 Aquaintances Close Friends 8.2 5 6.8 Family 0 Total Women Magazine Readers Base: Respondents from TalkTrack®, July 2008 – June 2009, Total Public Females ages 25-49 with HHI $50K +, n=4,640; Total Panel Sample (Women’s Magazine Readers), n=1,026 *Magazine readers and total public all female aged 25-49 with household income of $50K+
  13. Magazines Are an Influencer-Rich Influencers Are Key to WOM Audience ENGAGED •Diverse interests “Influencers” TRENDSETTING •Early adopters Yet they account comprise only for 25% of all 10% of the U.S. CONNECTED •Large social networks WOM population IMPACTFUL •Trusted source of information Source: TalkTrack®, July 2008 – June 2009, Total US Population 13-69
  14. Influencers: Frequent Magazine Readers Influencers are more frequent readers of magazines of all types. Total Public Influencers 60% 53% 50% 40% 40% 25% 38% 31% 31% 30% 27% 18% 19% 26% 25% 25% 2-4 Days 12% 13% a Week 19% 20% 14% 12% 10% 14% 28% 9% 5- 7 Days 10% 18% 20% 21% 19% a Week 13% 14% 15% 10% 11% 0% News/Business/ Women’s Lifestyles Sports Men’s Politics Interests & Celebrity Interests Base: Respondents (Total, n=1,920; Influencers, n=323) Source: TalkTrack®, October 30th to November 19th
  15. Women’s Magazines Deliver 50% More “Influential Consumers” than the Norm % Qualifying as Influencers 20% 15% 18% 10% 5% 12% 0% Total Women Women's Magazine Readers (Females 25-49 HHI $50K+) (Females 25-49 HHI $50K+) Base: TalkTrack®, July 2008 – June 2009, Total Public Females ages 25-49 with HHI $50K+, n=4,640; Custom Study, Total Panel Sample (Women’s Magazine Readers), n=1,026
  16. Influential Readers Talk More 50% more conversations about products every week than the average magazine reader
  17. …With Far More People Discussed products Discussed products with 22 People with 33 People All Magazine Readers Influential Magazine Readers
  18. Influencers Are First to Buy 62% more likely than the average magazine reader to be the first to buy new products and services
  19. How Much Does this Influential Magazine Reader Impact the Bottom Line? © 2009 Keller Fay Group
  20. Calculating the Economic Value of WOM Economic value of influencers stems from the following A. Probability of person to be affected by magazines (Reliance on Magazines) B. Number of conversations they have about products (Volume of Conversation) C. Persuasiveness of readers word of mouth (Credibility & Persuasiveness) D. Expected profitability of their friends (Profitability) Reliance on Volume of Credibility & Profitability Magazines Conversation Persuasiveness
  21. Influential Magazine Readers Deliver More $$’s to the Bottom Line Reliance on Volume of Credibility & Profitability Magazines Conversation Persuasiveness 3.8X more value to marketers vs. all magazine readers
  22. How Does That Translate to the Bottom Line? Average Magazine Reader Influential Magazine Reader
  23. What Drives the Increased WOM Value? Interviews of “peers” was key to providing first-ever measures of persuasiveness and peer profits. 3.9 Conversations about … 1.8 1.3 1.4 1.2 Consumer Technology WOM Value 4.1 2.4 1.6 1.1 0.9 Personal Care & Beauty WOM Value 3.2 1.8 1.3 1.3 1.1 Apparel & Accessories WOM Value
  24. Conclusions • Word of mouth matters – Peers report making purchases that are largely tied to the persuasiveness and credibility of WOM information • Magazines reach the influencers who drive WOM – Magazines that have the most influencers deliver the most social value to advertisers – Magazines are a key source of the information shared in WOM • The value of WOM is measureable, and substantial – A marketing strategy that targets influencers will yield ROI
  25. Thank You! Ed Keller ekeller@kellerfay.com Rachel Swanson Rachel_Swanson@condenast.com

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