Article in Oct'12 ADMAP special on WoM marketing

1. W O R D- O F- MO UT H MARKETING
00 FOCUS CH INESE A DV O CA TES
China’s authentic
Consumer attitudes and the media landscape in China
present unique challenges. An authentic approach to word-
of-mouth marketing using advocates can be a potential
game changer, delivering growth at a fraction of traditional
media spend, writes Asit Gupta of Advocacy Asia
G
lobally, word-of-mouth means of communication. Over the last support beyond the top 20-25 cities (which
recommendations of friends decade, the digital revolution has massively account for only 20% of the population). For
and family have been boosted the scale and speed of this social example, Johnson & Johnson’s leading skincare
consistently rated as the exchange of information and opinion. It is like brand Neutrogena is supported with TV
number-one driver of purchase. Chinese whispers on steroids. advertising in only top six cities. To stand out
According to Nielsen’s 2011 Global Trust in and take share from well entrenched players
2
Advertising study, 92% of people trust WOM Product proliferation, like P&G’s Olay and L’Oréal, it needs to cut
recommendations from friends and family, contamination and counterfeiting through with heavy media weights. However,
while the same figure for TV is almost half at Chinese consumers are faced with even maintaining SOV in the current six cities
47%, and for online video it is 36%. a huge amount of new products, some of is challenging, let alone extending TV support
However, WOM of friends and family which are in categories they have never tried to new cities. To maintain media weights,
is far more powerful in China and other before. Mouthwash, for example, is used by companies have cut copy length. China is now
emerging markets, compared with developed less than 10% of Chinese households. one of the few markets in the world where
markets. A 2010 McKinsey study on mobile Additionally, counterfeiting and sub-standard the majority of CPG TV media spend is on 15
phone purchase showed that WOM was the manufacturing are not uncommon. Thus second ads and not the traditional 30-second.
leading factor at all stages of the consumer knowing that a trusted friend has had a In short, brands are in a Catch-22 situation.
decision journey in developing markets, while positive experience with a new product is a Without massive media spend, they cannot
in mature markets it was third (Figure 1). huge reassurance. grow, and without growth, they cannot fund
In another McKinsey study, 68% of the media spend. Marketers are thus
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Chinese consumers said they would consider A culture of fitting in increasingly looking at activities that can
friends and family recommendations when ‘A nail that sticks out gets hammered generate ‘earned’ media, or, put simply,
choosing a moisturiser compared with just in’ might be a Japanese proverb, but it create buzz.
38% of respondents in the US and the UK. applies even in China. In general, people find Marketers in China are well aware of
There are three key reasons why WOM is comfort and security in group think and the massive influence of WOM in their
more powerful in China, compared to other following (as opposed to leading). categories. However, most WOM marketing
markets. Individualism is not as prized as in the activity in China reflects the old broadcast
1
History of information control by West. Taking cues from what others model mentality, even though it is mainly
government around you are consuming is the norm. conducted online.
Most people in China under the age of In a market like China, where the Brand managers do not want to let go of
70 did not see any commercial advertising challenge facing MNC companies is habit control. They want consumers to do WOM
until the early 1980s. Even by the end of that change and habit creation, marketers need for their brands, but want them to include
decade, there was only one TV channel and a medium which has high reach, high depth, the key benefit/big idea in the conversation.
very few magazines and newspapers. Even and is also trusted. Historically, TV They forget that the message a consumer
when more channels became available in the advertising has played that role in most hears is not always the same as the message
1990s, the content was controlled. markets. However, brands in China have they share. After all, a consumer narrating in
Censorship of programming continues even faced double-digit annual inflation in TV his/her own words how the product
now. Thus, Chinese consumers have long media costs for the last ten years. Even MNC enhanced their life or solved a problem is
trusted the informal word-of-mouth within companies with deep pockets cannot afford much more compelling and relevant to their
their social network more than any other to support their brands with regular TV friends than a clever tagline and demo. A
A DMA P OC TOBER 2012
ADM Oct FOCUS 6_Gupta_FINAL.indd 18 9/21/2012 09:57:31

2. W O R D - O F -M OU T H M AR K E T I N G
37
C H I N E SE AD V OC A T E S
advocates
Dettol, one of its global power brands,
FIGURE 1 INFLUENCE ON PRODUCT CONSIDERATION Reckitt Benckiser China has built a
community of over 30,000 mothers over
In mature markets In developing markets a period of 12 months. These mothers are
Stage 1 spreading the word about Dettol offline and
Initial consideration Advertising Word of mouth
set 30 18 online. Over 25,000 authentic consumer
reviews, comments and photos now exist
Previous usage Advertising
26 17 online about Dettol, a low involvement
Word of mouth
antiseptic liquid. This authentic user
Previous usage 15
18 content optimised for search engines is
influencing and converting other consumers
Stage 2 24/7. Besides advocating Dettol within their
Internet Word of mouth
Active evaluation information 29 28 social circle, these consumers have also
helped the brand team create and validate
Shopping Advertising
20 0.0
0.2
0.4
0.6
0.8
1.0
26 new messaging and product ideas, in half the
Previous usage
time and cost of the traditional approach.
Word of mouth
19 13 They are now pretty much like an extended
marketing team on Dettol.
Internet
More importantly, the high RoI of the
Stage 3 information 65 Word of mouth 46 Dettol Advocates community has been
Moment of purchase proven by TNS brand tracking. Over three
Shopping 20 Advertising
40 waves of tracking, the geographies with the
Word of mouth Previous usage
advocates community far outperformed other
10 9 geographies on all brand health indicators. In
advocate geographies, recall of Dettol’s key
message reached almost 50%, with no TV ads.
mindset change is required to bring people buying your brand. In the past, to achieve this level of message
marketing in line with the changed power The Boston Consulting Group in an article recall, Dettol had spent 10-12 times more.
equations between brands and consumers. ‘Harnessing the Power of Advocacy
The focus needs to be on conversions Marketing’ said: “Advocacy is a gift that keeps SUMMARY
not impressions, recommending not on giving in at least three ways. First, there’s
spreading, brand utility not brand content, the snowballing effect of recommendations. WOM recommendations are a powerful
active advocates not passive followers, Whereas advertising can drive consumers purchase driver, more so in emerging
generating reviews not views, building a down the ‘purchase pathway’ from markets with high trust deficit like China.
sustained community and not doing one-off category interest to brand awareness, brand To efficiently and effectively generate such
campaigns. consideration, and finally brand purchase, authentic recommendations, brands need to
Every brand has advocates who like the word-of-mouth advocacy turns that one-way build a community of advocates and engage
product enough to recommend it. Advocates street into a roundabout, as customers who with them in a sustained and authentic
do not need to be paid to talk about the purchase the product encourage new manner. This requires a mindset change and
brands they like, as it is human nature to customers to enter the virtuous circle. In new skills. It is high time we said goodbye
share your positive experiences with other other words, advocates beget advocates to the 1950s model of brand marketing
people. Connecting with these advocates, and and, over time, the cost to acquire new pioneered by P&G, which relies on brand
engaging with them regularly, to seek their customers plummets. content around a big idea. Community,
opinion or share value-added information, The good news is that brand advocacy Collaboration and Conversation need to be
further cements their bond with the brand. can be unleashed for even mundane and low the focus from now on. ‘Authentic Advocacy’
The mere act of a brand reaching out makes involvement products. The Fiskateers that drives growth at a fraction of traditional
them feel valued and respected. They community created by Brains on Fire for media cost will be the prized outcome of this
become even more likely to recommend Fiskars, the garden tool brand, is a good new focus.
your brand within their social circle. Such example of this.
authentic advocacy may not be creatively Even in China, progressive marketers like more on word-of-
sexy and win awards at Cannes, but it Reckitt Benckiser are embracing advocate-led mouth marketing at
delivers what ultimately counts – more marketing and enjoying high RoI. For www.warc.com
ADMAP O CT O BER 2012
ADM Oct FOCUS 6_Gupta_FINAL.indd 19 9/21/2012 09:57:32