This document provides an overview of word-of-mouth marketing (WOMM) strategies. It defines WOMM and discusses various best practices types including product seeding, referral programs, viral marketing, grassroots marketing, and more. It also covers worst practices to avoid, methods for measuring WOMM, research on the effectiveness of WOMM over traditional advertising, and factors that influence adoption of WOMM strategies.

1. Word-of-Mouth Marketing 101
Peter Storck
SVP, Business Intelligence, House Party
WOMMA/MRA Webinar Series
January, 2011

2. WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption

3. WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption

4. WOM & WOMM
• WOM:
– Consumers providing info to
each other
– Intuitively, the best advertising
– Only recently harnessed
• WOMM:
– Giving people a reason to talk
– Making it easier for them

5. WOM & WOMM
• Can‟t
– Create or script WOM
• Can
– Make consumers happier
– Listen to them
– Leverage their desire to be first
– Facilitate sharing
– Inform influentials
– Activate advocates
– Recognize the power of both good
and bad WOM

6. WOM Can’t Be Faked
• Fake WOMM
– Unethical
– Backfires
• Legitimate WOMM
– Respects consumers‟ intelligence
– Authentic, transparent, honest
• WOM
– Self-policing
– Pushes marketers to satisfy
Only honest marketers with confidence in
their products should practice WOMM

7. Elements of WOMM
• Educating people
• Studying how/where/when opinions are shared
• Indentifying influencers
• Harnessing peoples‟ desire to be insiders
• Providing tools for easy sharing
• Listening and responding to supporters,
detractors, neutrals

8. Digital Social Media …
• A subset of WOMM
– less than 2%
• 90% of consumer
conversations about
brands occur offline
(Keller Fay)

9. WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption

10. Types of WOMM
• Buzz • Influencer
• Viral • Cause
• Community • Conversation Creation
• Grassroots • Brand Blogging
• Evangelist • Referral Programs
• Product • Co-Creation

11. Product Seeding
Providing samples to influential consumers
FORD FIESTA MOVEMENT
 Managed by Undercurrent
 Gave 100 social media enthusiasts
a Fiesta for 6 months prior to release
 Asked to create a mission each month, and
share in social media
 Meals on Wheels, alligator adventures,
elope
 Generated:
 6.5 million YouTube views
 500,000+ Flickr views
 3 million+ Twitter impressions
 50,000 opt-ins, 97% non Ford-owners
 Seeded, and Sold 10,000 Fiestas in first six
days
11

12. Referral Programs
Creating tools that enable satisfied customers to refer their friends
CHILI’S BAR AND GRILL
 Managed by Zuberance
 Identified biggest brand advocates by email,
Facebook, Twitter and site surveys
 Engaged 125,000 advocates, who:
 Posted 75,000 reviews, 40,000 on Yelp
 Generated 9 million influence impressions
 Shared 110,000 free appetizer offers, yielding
50,000 new opt-ins
 Chili‟s was able to:
 Energize and reward loyalists
 Get referrals to their friends
12

13. Viral Marketing
Creating messages designed to be passed along, often electronically
OLD SPICE
 Managed by Wieden + Kennedy
 Ran funny commercial with “Old Spice Guy”
that then went viral on YouTube (over 28
million views)
 Followed-up with hundreds of Old Spice Guy
videos in just 2-3 days, responding to fans‟
Twitter questions in near real-time
 Generated 135,000,000 views
 Sales of Old Spice body wash increased
107% the following month
 Went viral, multiplying their reach at little cost
 This is not easy
13

14. Grassroots Marketing
Organizing volunteers to engage in personal or local outreach
OBAMA PRESIDENTIAL CAMPAIGN  Site generated:
 2 million profiles
 Led by Chris Hughes, a co-founder of
Facebook  200,000 offline events
 Created the highly interactive,  400,000 blog posts
my.barackobama.com:  35,000 volunteer groups
 User Dashboard  Campaign generated:
 Social network  120,000,000 YouTube views
 Event listings  5,000,000 Facebook fans
 Blogs & Forums  1,000,000 text subscribers
 Calls to action  Brought organizing volunteers to a
whole new level
14

15. Conversation Creation
Initiating catchy ads, emails, promotions, etc. designed to start WOM
BURGER KING’S WHOPPER SACRIFICE
 Managed by Crispin Porter + Bogusky
 Offered a free Whopper coupon to
customers willing to de-friend 10 people
on Facebook
 23,000 coupons distributed
 Generated redemptions, but little
engagement/conversation, questionable
loyalty
 Did catch attention, and appeal to some
15

16. Buzz Marketing
Using high-profile entertainment or news to get people talking
RED BULL STASH
 Managed by Archrival
 Hid thousands of Red Bull Energy Shot
stashes across the US; posted clues on
Facebook
 Encouraged stories and photo uploads to the
site
 Invited finders into the “Final Stash,” a virtual
scavenger hunt offering a trip to NYC
 Generated a surge in Facebook activity,
widespread sampling, online and offline buzz
 Created high profile event, got people talking
16

17. Influencer Marketing
Engaging opinion leaders and communities with your brand
THE TRAVEL CHANNEL
 Managed by Room 214
 Indentified and monitored key advocates and
influencers in the blogosphere
 Established active presences Facebook, Twitter,
Digg, StumbleUpon, more
 Encouraged key influencers to start and join
conversations
 Generated and tracked over 15,000 conversations 6
months, 80% favorable
 Reached over 200,000 online community members
 Engaged influencers, built community
17

18. Evangelist Marketing
Cultivating advocates to spread the word on your behalf
DELL
 Managed by Mr. Youth
 Identified 2 brand advocates each on
college campuses across the US
 Provided a Dell computer
and $1-2,000 to execute a marketing plan
 Approved but self-designed
 Campus-specific
 Indigenous
 Purchase-consideration rose from 14% to
27% on activated campuses
 Non-activated flat
 Harnessed evangelists, drove toward
purchase
18

19. Brand Blogging
Blogging and participating in the blogosphere
PHILOSOPHY
 Managed by Bazaarvoice
 Launched a blog in advance of Mother‟s Day
for consumers to upload and vote on stories
of their mothers‟ philosophies
 Drove engagement with a $1,200 shopping
spree to the story with most votes
 “Stories” blog made up 39% of traffic that
month
 Its visitors generated:
 81% more page-views
 20% higher average order value
 19% more items per order
 Built blog, and they came
19

20. Community Marketing
Forming or supporting communities; providing tools and content
RANDOM HOUSE
 Managed by Affinitive
 Launched Random Buzzers, an online book
community for teens:
 Connect with one another
 Co-create projects
 Engage with Random House authors
 Write and share reviews
 Read exclusive book excerpts
 Over 60,000 members, with:
 17,500 photos
 4,000 reviews
 5,600 comments
 50,200 forum posts
 Built community, and they came
20

21. Cause Marketing
Supporting social causes to earn respect and support
PEPSI REFRESH
 In lieu of Super Bowl spending in 2010, invited
consumers to suggest causes for funding
 Funded causes with most votes
 Donated at least $1 million a month
 Gave another $1.3 million for ideas to clean Gulf oil
 As of December 2010
 Over 61 million votes cast
 $14.6 million donated for 352 ideas, including
improvements to parks, playgrounds and schools
 Returning to Super Bowl
 Continuing „Refresh‟
 Did good, rose in esteem
21

22. Co-Creation Marketing
Involving consumers in marketing and creative
DORITOS CRASH THE SUPER BOWL CONTEST
 Ran contest for consumers to create 2010
Super Bowl commercials
 Third year in a row
 Drove 4000 entries with prizes for top (4) vote-
getters:
 Trip to Super Bowl
 $25,000
 Airing of spot
 Up to $2 million if spot ranks in top 3
 One placed first in 2009
 Invited creative, multiplied attention to ads
22

23. In reality, most
WOMM combines
program-types
23

24. In-Home Marketing
Evangelist, Co-Creation, Influencer, Product Seeding, Referral, Buzz ...
FEBREZE SET & REFRESH HOUSE PARTIES
 Managed by House Party
 Recruited target hosts for 6,000 parties, one with
Sandra Lee
 Gave hosts microsites for piloting parties
 Sent party packs with samples and branded favors
 Generated over 500,000 hours of brand exposure ($9
eCPM-30‟s), among 7 million conversation partners
 Drove large lifts:
 Familiarity: 34 points
 Favorability: 60 points
 Purchase-Intent: 57 points
 Recommendation-Intent: 58 points
 Harnessed influencers & evangelists, co-created, etc.
24

25. WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption

26. Unethical WOMM
• Stealth
– Deceiving people about the involvement of marketers
• Shilling
– Paying people to advocate without disclosing it
• Infiltration
– Taking over a forum under false pretenses
• Comment Spam
– Using automation („bots) to post on blogs
• Defacement
– Vandalizing property to promote a product
• Spam
– Sending bulk messages without clear permission
• Falsification
– Knowingly disseminating false information

27. Botched WOM
A Food Brand
 Greenpeace criticized brand‟s
environmental practices in
YouTube video
 Brand forced YouTube to
remove it
 Consumers trashed the brand
on Facebook and Twitter
 Brand responded with anger,
sarcasm, de-friending
 Brand caused more damage
than video would have if left
alone

28. WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption

29. Spend Bringing Accountability
• Data collected online and off
• Generational reach
• Respected 3rd Parties
• Increasingly precise, reliable, standardized
– WOMMA‟s role
– Focused on ends, not means
• Enabling cross-media comparison
– Reach (CPM-Impressions)
– Engagement (CPM-30‟s)
– Awareness & Attitudes (Costs Per)
– Action (Costs Per)

30. WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption

31. Study After Study Builds the Case
• 90% of consumers trust product recommendations
from friends (Nielsen)
• 61% of conversations about products impact
likelihood to buy (Keller Fay Group)
• Customers acquired through WOM monetize 3-5
times more (Hill/Wharton, et al)
• WOM customers have nearly twice the long-term
value (Villanueva/ U of Navara, et al)
• Many more

32. WOM Drives Favorability
Favorability of a Software Product
Among House Party Participants vs. Control, at 6 and 12 Months After:
57% to 67% Higher
100% 92.7% 93.7%
89.3%
90% 89.2%
80%
70%
60% 55.5% 56.7%
50%
40%
30%
20%
10%
0%
6M 12M
G0 G1 Panel
G0 6M n=1270, Panel 6M n=661, G1 6M n=75, G0 12M n=965, Panel 12M n=319, G1 12M n=102.
Favorability: Please indicate how favorable or unfavorable your impression is of the following product
ChatThreads, Proprietary and Confidential

33. WOM Drives Media Receptivity
Aided Ad Recall among Participants and Control, at 6 and 12 months:
38% to 64% Higher
90%
82.0%
79.0% 78.0%
80%
69.0%
70%
60%
50.0% 49.0%
50%
40%
30%
20%
10%
0%
6M 12M
G0 G1 Panel
G0 6M n=1270, Panel 6M n=661, G1 6M n=75, G0 12M n=965, Panel 12M n=319, G1 12M n=102.
Which of the following features of [the product], if any, does [the brand] mention in its TV advertising?
Check all that apply.

34. WOM Drives Purchase
Purchase Rate among Participants vs. Control, at 6 and 12 months:
2-3 times higher
100%
90%
80%
68.2%
70%
62.4%
59.4%
60%
52.0%
50%
40%
27.9%
30%
20.1%
20%
10%
0%
6M 12M
G0 G1 Panel
G0 6M n=1270, Panel 6M n=661, G1 6M n=75, G0 12M n=965, Panel 12M n=319, G1 12M n=102.
In the past [six/twelve] months have you already purchased [the product]
ChatThreads, Proprietary and Confidential.

35. WOM Drives Recommendations
Recommendations among Participants vs. Control, at 6 and 12 months:
5-8 times Higher
80%
73.7%
71.5%
70%
60.0%
60%
50% 48.0%
40%
30%
20%
10.0% 9.1%
10%
0%
6M 12M
G0 G1 Panel
G0 6M n=1270, Panel 6M n=661, G1 6M n=75, G0 12M n=965, Panel 12M n=319, G1 12M n=102.
In the past 30 days, have you recommended [the product] to anybody?
ChatThreads, Proprietary and Confidential.

36. WOMM 101
• Definition
• Types (Best Practices)
• Worst Practices
• Measurement
• Effectiveness
• Adoption

37. WOMM Is Taking Off
• Continuing fragmentation,
clutter, avoidability of traditional
• Rise of digital social media – tools
and usage
• Increasing evidence of WOMM‟s
viability and power

38. Despite Recession,
WOMM Growing Fast
Spending Growth ($M)
$3,500
18.3%
Growth
$3,000
16.7%
14.9% Growth
$2,500 Growth
12.8%
10.2% Growth
$2,000 Growth
$1,500
$1,000
$500
$0
2008 2009 2010 2011 2012 2013
COMBINED ANNUAL GROWTH RATE 14.5%
SOURCE: PQ MEDIA
Does not include in-store product sampling; coupons & loyalty programs; event marketing & sponsorships; public relations not
associated with WOM, such as crisis management; and social network and consumer-generated media advertising.

39. Brands WOMMing
Across Categories
Shares of WOM spending by category
5.8
3.2
17.4
CPG
3.3
Food & Drink
3.6
Finance & Business
4.1 Electronics & Telecom
Retail
6.2 Auto & Transportation
12.2
Entertainment & Media
Apparel & Accessories
7.5 Healthcare & Pharma
Sports & Gaming
9.5
Travel & Leisure
8.6 Home & Garden
9.4 Other
9.2
SOURCE: PQ MEDIA

40. Sample Suppliers
AGENCIES ONLINE COMMUNITIES
MEDIA MEASURERS

41. WOMM Over the Next Few Years
• More standardized measurement
• More proof of superior long-term ROI
• More precise targeting
– Though targeting is built-in
• Better fusing of online and off
• Less shilling
• A staple in the marketing mix

42. Thanks
peter.storck@houseparty.com