Over 80% of people trust word of mouth
Word-of-mouth marketing, the latest advertising boom in the US, is coming to Britain. Would you be prepared to slip a casual product endorsement into a cosy chat with friends?
By Denise Winterman
BBC News Magazine
On average we are bombarded by over 3,000 marketing messages a day. From Coronation Street to school sports' day, nearly everything we do, see, use and eat is sponsored by one company or another.
But just 14% of regular campaigns now have any effect, according to Marketing Week. We are too cynical and media savvy to buy into marketing messages anymore.
"Consumers are now in control, brands have lost the advertising fight," says Tom Himpe, author of Advertising Is Dead, Long Live Advertising!
"Consumers are no longer passive and the internet means they can make their moans on a global scale. It's a vulnerable position for brands."
It's a situation that has forced advertising to go back to basics - word of mouth. It has always been the industry's Holy Grail.
"Advertisers have always been fascinated with word of mouth," says Dave Balter, CEO of BzzAgent and co-founder of Word of Mouth Marketing Association (Womma). "It just been a case of how to harness it."
Which is where word-of-mouth marketing (WOM) steps in. It's when everyday people - called agents, ambassadors or transmitters - are sent the latest products by companies to try out and tell their family and friends about. It can be anything from mobile phones to sausages.
Companies are at pains to point out it is not stealth, buzz or viral marketing. Agents have to disclose that they are involved in a marketing campaign.
They are not scripted, what they say doesn't have to be positive and they are not paid, but do get to keep the products and have to report back on them. They also get what the industry calls "social currency" - the thrill of being the first to try something new.
"That's the beauty of word of mouth, it's raw, real, direct and genuine," says Mr Himpe. "It is the consumer talking, not the brand."
It's already massive in the US. According to Womma 47% of the Fortune 500 companies are adopting WOM programmes in 2007.
Teenagers are more brand aware
Now it is coming to the UK. One of the leading companies in the US, BzzAgent, is joining forces with advertising company GroupM UK to form what is said to be the first WOM company based in the UK.
But why get involved? It's easy to see why people would sign up to getting the latest mobile phone but usually the products are far less exciting. That doesn't seem to put people off.
In the US people are signing up to BzzAgent at the rate of 5,000 a week. It boasts a network of over 250,000 agents. Before the company even launched in the UK over 160 people had been in contact about joining.
Rani Schlenoff is a BzzAgent ambassador in the US and has tried and tested over 18 products, including toothbrushes and candy bars.
"One of the most natural thing we all do is speak about what we've bought and seen," she says. "I'm a talker naturally, so WOM was right up my alley.
"My family and friends love hearing about what I'm trying. As for strangers, after the initial shock of me injecting myself into their lives, they are usually very happy to hear what I have to say."
But doesn't the fact big businesses are involved corrupt the message for people? Not according to research by Professor Walter J. Carl, from Northeastern University in Massachusetts.
It found 75% of people didn't care an agent was affiliated with a
marketing organisation, what mattered was that they trusted them, believed they were providing an honest opinion and had their best interests at heart.
In fact, information is spread further by word of mouth when an agent does disclose their affiliation rather than when they don't.
But there are grey areas in the industry. Firstly, the ethical question - isn't it, well, just a bit sneaky? Agents are asked to disclose their part in a marketing campaign, but how do we know they do?
WHO'S USED WOM
A code of ethics has been drawn up by Womma, but the industry is basically self-regulating as the Advertising Standards Agency has no rules or guidelines when it come to WOM.
Also, where does spontaneous word of mouth end and manipulated opinion start?
"It's such a fine line," says Mr Himpe. "But when word of mouth is influenced even slightly it is no longer genuine."
Some people would view it as selling out. Time with family and friends is sacred and the thought of big business muscling its way in is very unpalatable. That is often just an age thing, says Mr Himpe.
"For some it would definitely feel like selling your soul, but they are usually older people. Youngsters today have a very different relationship with brands, they are an accept part of their lives in a way they have never been in previous generations."
But companies shouldn't get too excited, it not all good. According to research a good message is passed on to five people but a negative one goes out to 10... and with more passion.
Add your comments using the form below.
Hi, I'd like to tell you about a product that I just can't get enough of, its called "think for yourself your lifeless fools". Its free, you can try some right now and if you have something resembling half a brain left in your head after all the relentless marketing you are already subjected too, then you will love it. Personal human interaction reduced to a sales exercise - this is a disgrace from the ever more disgraceful human race.
Michael Dixus, London
If I was particularly impressed by a product, I would mention it to friends anyway. If I get freebies then all the better. All the same, if I got a product I thought was poor then the company in question would probably get negative marketing as I advise people to avoid it.
What's to stop agents getting their freebies and not talking to their mates about them. Americans might be too stupid to exploit this hole but Brits are far more devious.
Dr Bob Dobbs, Birmingham
Great idea. And its not as if your friends and family would actually be 'plugging' new products to you left, right and centre. Talking about the products we use and find helpful in our everyday lives is a natural part of our conversations - people are always talking about new things they've recently tried out. So if companies want to send us freebies to try out then why not let them... and if the product is really that great then we'll want to tell people so they can benefit from them. And if its not great then that'll be passed on via WOM and its the company who will lose out.
Isn't this just an extension of marketing through handing out free samples? What makes it so different? Do agents have to report how many people they tell about a given product, and how do companies measure the success of WOM marketing?
Yet another argument for banning advertising completely except for a common, regulated facts-only presentation. This is will become the case in 2074.
Zarquon, Steeple Morden, England
"Oh my god" was my instant reaction
As someone who tries to avoid adverts, being cold called by my friends would be ghastly.
It would be acceptable to have a web site for comments on products that I could choose proactively to log onto, but not this.
colin allott, Hull England
If a friend of mine were to come down the pub and start extolling the virtues of product x they┐d been given, firstly they would no longer be a friend and second we would all go to a different pub with out telling them. They would become social outcasts and so the effect would be lost.
I think these companies are missing the point. You get good WOM advertising if you supply a product or service that is good. Spend less on these pointless gimmicks and more time producing stuff that actually works.
Adam, London, UK
Soon we won't even be able to trust the opinion of our friends. Imagine asking a mate what he thinks about a certain car you're thinking of buying and instead of an honest view, he just extolls the virtues of one manufacturer because he's been paid to do so. Well done big business for serving to create a further degree of cynicism and amongst the public at large.
Most people do it already, We promote the film we saw last night to our workmates, I wear a WestBromwich Albion shirt, My daughter has Nike on her trainers. My car as a sticker promoting the dealer I purchased it from. People see the name of my TV on a badge, my mate bought the same TV because he liked mine. I walk around with a carrier bag I purchased advertising a supermarket. If we look closley we all do it. We should get paid for it.
Load of rubbish. Life is one big advert from talking ourselves up to the rubbish we eat see hear and die for. We may as well get paid for it into the bargain.
If I was going to anything like that at all I would demand to be paid for it.
So are they saying we'll send you a free pack of sausages (example) and in return you'll spend hour after doing some salesman's job for him?
Keep your free samples if you want WOM ads pay us what the admen get paid for doing it!
John Brittles, Liverpool
When I want to know about a product I ask a friend who has used it before and yes, the answer is honest. Why do I need to ask somebody with ulterior motives when I can ask somebody else?
Sweet. I'm going to market myself. I'll hire myself out to people and hang out with them and they can all tell their mates that they need to get one of me... let the mass cloning experiment begin!
Ian Maxwell, London
If Sony could please send me a free Play Station 3, I will be happy to recommend it to my mates.
Derek Timothy, Cumbernauld, UK