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Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
Wom In A Bad Economy
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Wom In A Bad Economy

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  • 1. Word of Mouth – A Prescription for a Bad Economy
  • 2. This economy is bad…like really bad… y y
  • 3. It looks like we’re in the big R… g
  • 4. Yikes, Advertising is taking it on the chin... - Group M forecasts media spending down 3 2% in 2009 3.2% - Zenith Optimedia forecasts 5.7% down in 2009 - Morgan Stanley could envision a +10% drop in spending depending on the economy
  • 5. How will we carve up the media pie?... Well, we’ll be eating less media: - 93% of CMOs believe the economy will have a significant/moderate impact on their budgets y g p g Source: Epsilon - 70% of CMOs plan on reducing their marketing spending
  • 6. The Long Slow Decline into Irrelevance Perhaps a premature announcement, but why wait. 2009 Anticipated Declines: - 15% Newspapers - 13% Consumer Magazines - 10% T Terrestrial R di t i l Radio - 4% Network TV Source: Jack Myers Media Report
  • 7. Smart Marketers are Now Rethinking Traditionally Held Views... H ld Vi
  • 8. Crisis requires radical shifts in thinking q g
  • 9. Another Change You Can Believe In Is Coming Ci …
  • 10. Here Comes the Next Wave of Marketing & Media Media…
  • 11. The Fastest Growing Marketing/Media g g Segments Expected 5 year  Compound Annual Growth Rate Word of Mouth 27% Internet/Mobile It t/M bil 14% Branded Entertainment 13% Custom Publishing 11% Out of Home Out of Home 10% Source: Veronis Suhler Stevenson
  • 12. Word of Mouth is Catching On…in All Its Forms Buzz Marketing Customer Collaboration Social Media Brand Communities Influencer Marketing Influencer Marketing Referral Programs Social Networks Grassroots/Cause Experiential Viral  User Generated  Marketing Marketing Marketing Content
  • 13. Fact - Most Traditional Media is an Inefficient Cost… …Word of Mouth is a Wise Investment
  • 14. Advertising Attention Deficit Hurdles 3,000 ads get pushed at us each day - 6 times the volume vs. 40 years ago…the tougher it is to breakthrough, the more we do and invest
  • 15. Reason #1 – Word of Mouth Gets Noticed ‐ 4% any ad recall from last TV show  ‐ 93% of people believe word of mouth is watched(down from 34% in 1965)   watched(down from 34% in 1965) the most reliable way to find out  the most reliable way to find out Source: NBA information about products and services  (up +26 pts. Vs. 25 years ago)   ‐70% of people frequently consume  Source: NOP World Source: NOP World multiple media simultaneously    Source: eMarketer
  • 16. One Way One-Way Communication Hurdles Customers demand interaction and customization, Marketers require it
  • 17. Reason #2 – Word of Mouth Taps The Values of New, New Customer Participation Culture Word of Mouth Mass Media Customers Now Want: Participation Values Grade Participation Values Grade Freedom 2/10 9/10 Customization  2/10 8/10 Scrutiny 3/10 / 9/10 / Integrity 2/10 9/10 Collaboration 1/10 10/10 Entertainment Et ti t 8/10 8/10 Speed 5/10 8/10 Innovation 2/10 9/10 Evaluation Score 25/80 70/80
  • 18. In a bad economy, marketing has to punch harder and create action…
  • 19. Reason #3 – Word of Mouth Stimulates Action ‐ 70% ‐ percentage of people affected by ‐ 90% ‐ proportion of people who can word of mouth conversations skip ads, do skip ads ‐ 37% buy it/try it ‐ 24% consider it ‐ 69% ‐ percentage of people who  ‐ 9% avoid it are interested in skipping ads  Source: Keller Fay completely         Source: Yankelovich p y
  • 20. Lifetime customer value trumps short term lift
  • 21. Reason #4 – Word of Mouth Has Longevity ‐ Average people have 17 word of mouth  ‐ Over 30% of the broadcast content we see  conversations each day conversations each day in mass media is advertising or promotion ‐ How much is interactive? High ‐ How much is conscious? Low ‐ How much is spoken? High ‐ How much is attentive/lean  ‐ How much is internalized? High How much is internalized? High forward? Low f d? L ‐ How much is retained? High ‐ How much is well‐received? Low ‐ How much is behaviour altering?  ‐ How much is retained? Low High ‐ How much is banked in How much is banked in  memory? Virtually nil ‐Brand Communities don’t reach full maturity  to 18 months ‐ 82% of community members refer more  people to a brand after joining
  • 22. Ad inflation is running wild In a down economy, advertising is a tougher discretionary expense to justify
  • 23. Reason #5 – Word of Mouth Costs Less Per Impact Choose Your Flavour: Choose Your Flavour: ‐ Cost to Prod ce a National TV Ad Cost to Produce a National TV Ad ‐ Year Round Community ‐ $100‐500k ‐ $360,000 ‐ 26 week Word of Mouth Campaign ‐ pg ‐ Min Media Cost to Air a National Min. Media Cost to Air a National  $40‐150k Campaign in Canada ‐ $1,200,000 ‐ Blog/Social Media Outreach $30‐100k g ‐ Typical Research Cost Associated with TV ‐ Advisory Panel ‐ $15‐75k ‐Campaign ‐ $25,000 ‐ $100,000 $25,000  ‐ Buzz Marketing Tactic    $5‐100k
  • 24. In a bad economy, few markets increase, it’s a battle for share growth
  • 25. Reason #6 – Word of Mouth is a Competitive Advantage ‐ Only 1‐2% of marketing budgets are ‐ Canadian advertisers spend $19 billion p $ currently spent directly on creating word of  on media ‐ $674 per adult mouth ‐ Advertising is spent on very similar  formats:  TV 30 f TV – 30 second ad dd ‐ Marketers are just beginning to activate  Print – Full page, ½ page word of mouth variants, but still low  Web – Banner, Search ‐ Influencer programs  ‐ 22% of marketers executing  ‐ Buzz/Stunts 15% Buzz/Stunts ‐ Radio – 30, 60 seconds R di 30 60 d ‐ Branded Entertainment 14% ‐ 10% ‐ Percentage of CFOs who believe  ‐ A 7% increase in positive word of mouth  marketers can assess impact of budget on  marketers can assess impact of budget on equates to 1% business growth   sales Sources: VSS, Agent Wildfire, London School of Economics Source: Canadian Marketing Association, MMA
  • 26. In today’s connected economy, grassroots influence is key Less than 10% of your customer base controls a big chunk of what the rest of us buy, think and do… why not target them?!
  • 27. Reason #7 – Word of Mouth Targets Influence ‐ With rare e ception (i e maga ines) With rare exception (i.e. magazines),  ‐ 70% of Wikipedia’s content is prod ced 70% of Wikipedia’s content is produced  mainstream media has a tough time  by 1.7% of its audience targeting audiences and specifically  influencers ‐ Top ranked Influencer belief “I love Top ranked Influencer belief – I love  talking to others about things I’ve just  discovered” ‐ Influencers are 2x more active, more  conversational and/or more brand‐ involved than the mainstream consumer involved than the mainstream consumer Sources: Agent Wildfire, Keller Fay
  • 28. Need for ROI for marketers in a bad economy is a mantra
  • 29. Reason #8 – Word of Mouth is More Measurable and Linked to Growth ‐Word of mouth activities have much  better measurement ability because of  ‐ Mass media has challenges auditing its  their digital nature and opportunity to  own traffic mine relationship with customer/member l h h / b ‐ Mass media weight cannot be linked to  ‐ The #1 factor linked to business growth  sales is word of mouth referral i df th f l ‐ When measured, it only measures  ‐ Word of mouth measures the key  presumed eyeballs not real engagement business drivers of engagement and  business drivers of engagement and advocacy  Sources: Agent Wildfire, Bain 
  • 30. Trust has eroded in our institutions, a bad economy will accelerate this contempt …but we still trust our friends and “people like me” but Source: Edelman Trust Barometer
  • 31. Reason #9 – Word of Mouth is More Trusted ⌧60% of people have a much more  Word of mouth is the #1 trusted  negative view of marketing and  source, up 50% vs. a generation ago advertising than a few years ago advertising than a few years ago 61% of people claim to buy the same  ⌧27% trust manufacturers brands as their friends (+28 pts. Vs. 4  years ago)  years ago) ⌧ 14% trust ads 90% trust their spouse ⌧ 8% trust celebrities 8% trust celebrities  82% trust their friends Sources: Yankelovich/Henley Centre Sources: Keller Fay/Yankelovich/Henley Centre
  • 32. Who do you trust?
  • 33. The Customer is the New Battleground Percentage of  executives who  believe the Customer  Experience is the  new battleground  ‐ 95% Percentage that  believe they are  b li h delivering a positive  customer experience  ‐ 80% Percentage of their  customers who agree  customers who agree ‐ 8% Word of Mouth gets you closer to your customer frontlines
  • 34. Reason #10 – Word of Mouth is More Customer Centric Mass Media Provides: WOM Provides: Entertainment Value Entertainment Value Informational Value Information Value Information Value Explicit value (rewards) Intrinsic value (feeling of belonging) Extrinsic value (ego/reputation) g p Experiential value (immersion) Social value (making connections) Talent value (expressing skills/creativity) Service value (adds to the product) Collaborative value (1+1=3)
  • 35. CEOs are Expecting More From their Marketers – Marketers need to be Leaner and Keener Word of Mouth accommodates those needs
  • 36. Reason #11 – Word of Mouth Simply Provides More Communication Comm nication Communication Advocacy Ambassadorship Buzz Insight Real world feedback Solutions S l ti Innovation Support Operational Improvements Operational Improvements User Generated Content
  • 37. Marketers want WOM for a variety or reasons Accelerate sales 19% Alt l 19% Deliver visitors/traffic  17% Hard Referrals/Leads/Members 32% Measure Provide learning 6% Drive brand loyalty 32% Generate user generated content  19% Get Insight /solutions 10% Awareness/Buzz 35% Seed influencers 32% Soft Target tough to reach audience 19% T h h di 19% Measure Launch a product 22% Build a better customer experience 21% Support a cause 6% S t 6% Enhance credibility 14% Participate in a conversation 26% Support a cause 6% External Internal Source: Agent Wildfire   Question ‐ What are the top 3 objectives for launching a word of mouth based initiative?
  • 38. Don’t skate to where the puck is , skate to where it is going to be
  • 39. Reason #12 – Word of Mouth is the Now & the Future ⌧ Canadian Marketers plan on spending  58% of marketers agree that more/less in 2009: /l i 2009 word of mouth influence will overtake df h i fl ill k More Less traditional media influence within a  Newspaper      5%      32% generation Radio    Radio 5%      33% 5% 33% TV 4%      37% 73% of marketers believe marketers will  Magazines        3%      39% become much more important in an  Social Media   23%    16% Social Media 23% 16% organization by leveraging word of mouth  organization by leveraging word of mouth strategies and tactics  Source: Veritas Source: Agent Wildfire
  • 40. A Palette of New Strategies & Tactics Await What  forms of word of mouth will experience the  hf f df h ill i h most growth in the next few years ? (top 3 choices) Social media marketing    S il di k ti 37% Social network marketing  35% Mobile marketing    34% User‐generated Content  User generated Content 31% Influencer marketing    28% Brand communities   20% Customer forums    Customer forums 17% Branded entertainment   16% Cause‐related marketing  14% Brand microblogging  Brand microblogging 14% Buzz marketing  13% Corporate/brand blogging  11% Source: Agent Wildfire
  • 41. Recap – The 12 Reasons Why Word of Mouth (WOM) is Primed for this Economy 1 ) WOM Gets Noticed 2)  WOM Taps Participation Values 3)  WOM Stimulates Action 4)  WOM has Longevity 5)  WOM has Less Cost/More Value 6)  WOM is a Competitive Advantage 7)  WOM Targets Influence 8)  WOM is More Measurable 9)  WOM is More Trusted ) d 10) WOM is More Customer Centric 11) WOM Provides More 12) WOM is the Future 12) WOM i th F t
  • 42. …Don’t Despair
  • 43. We plan, seed, incubate execute, measure, live and breathe the spectrum of word of mouth Integrated Brand Community‐building Advisory Panel Influencer‐driven Challenge/intervention Referral‐driven Grassroots sponsorship/cause‐driven Offline  Experiential Buzz/Guerrilla Online Social Media Production/Outreach Social Network Production/Outreach  Viral  Affiliate/Referral ‐driven User‐generated  User generated Advergaming 44
  • 44. Let’s Start Your Next Brand Conversation… Prakash Ranjan prakash@id8labs.com Phone: 09711990078 URL:  www.id8labs.com 45

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