Download Word of Mouth Advocacy: A New Key to Advertising Effectiveness

Word-of-Mouth Advocacy
A New Key to Advertising Effectiveness
ED KELLER
Marketers are increasingly focused on social marketing, encouraging consumers to share
The keller Fay Group
content as well as recommendations, seeking more emphasis on consumer “expressions”
[email protected]
BRAD FAY
The keller Fay Group
[email protected]
and not just “impressions.” But how should expressions be achieved and measured? The
authors argue for a holistic approach, one which recognizes that consumer expressions
occur most often face-to-face and are not primarily the purview of online social media.
Given research that demonstrates a powerful relationship between word-of-mouth and
paid advertising, the authors suggest the need for a new advertising model, one in which a
key goal of the ad is to foster conversation; the conversation then persuades the prospect,
which leads to purchase.
Social marketing is hot. Increasingly, marketers are
commercial on their Facebook page or forward a
interested in delivering brand-related content that
YouTube link via e-mail to their friends and family?
consumers will share with one another as a way of
Sex appeal, surprise, entertainment, and humor are
extending the reach for a message and to add an
some of the tools that are being employed to moti-
implicit consumer endorsement of the brand asso-
vate that sharing. Meanwhile, on the media side
ciated with the content.
of the business, agencies are shifting some of their
A popular example is the Old Spice campaign,
“The Man Your Man Can Smell Like,” starring the
spending to online social networks in the hopes
that they can increase the odds of online sharing.
former football player Isaiah Mustafa, who advises
Joe Tripodi, the Coca-Cola Co. chief market-
ladies to have their men borrow his choices of
ing officer, has neatly summarized the change in
personal-grooming product fragrances, even if
marketers’ thinking, calling for more emphasis
his “ripped” physique is beyond what is achiev-
on consumer “expressions” in addition to con-
able for most husbands and boyfriends (Ad Age
sumer “impressions.” Expressions, he says, reflect
Digital, 2011; Stroomedia, 2011). The entertaining
active engagement with content, whereas impres-
advertisements started on television but ultimately
sions—or mere exposure to content—are passive.
“went viral” online as consumers used YouTube to
“[Impressions] give us no real sense of engage-
share multiple executions of the campaign, some
ment, and consumer engagement with our brands
versions of which had been suggested to the brand
is ultimately what we’re trying to achieve,” wrote
by consumers themselves (Morrissey, 2010; Parpis,
Tripodi in a Harvard Business Review online article
2010). In 2011, Old Spice was ranked as the most
(Tripodi, 2011).
viral brand of the year, receiving nearly 96 million
“views” on YouTube, according to the firm Visible
MEASuRING WoRD oF MouTH HoLISTICALLY
Measures (Hallerman, 2010; Griner, 2010).
In fact, expressions are of paramount value and
The emphasis on sharing is having significant
impact on the design of advertising campaigns.
worth pursuing aggressively: brand advocacy
drives sales.
On the creative side of the business, advertis-
Marketers also need to think more holistically,
ing is increasingly developed with sharing as an
however, about what such “expressions” are and
objective: will consumers feel motivated to post a
how to achieve (and measure) them. Specifically,
DOI: 10.2501/JAR-52-4-459-464
December 2012
JOURNAL OF ADVERTISING RESEARCH
459
WORD-OF-MOUTH ADvOcAcY
they must recognize that expressions
traditional advertising from the nascent
occur most often face to face or voice to
field of WOM advertising needs to be
voice rather than online. To take a strictly
torn down, as the advertising profession
digital perspective limits the impact of
discovers the connection between stimu-
the overall marketing effort and misses
lating
out on the true power of word of mouth
effectiveness.
conversations
and
58%
50%
advertising
(WOM), which McKinsey & Co. has called
Given the importance of WOM to the
“the most disruptive force in marketing”
way consumers make decisions, the trad-
(Bughin, Doogan, and Vetvik, 2010).
itional advertising model needs to shift.
In fact, 75 percent of all consumer con-
The objective for marketers should be to
versations about brands happen face to
create advertisements that spark conversa-
face, and another 15 percent happen over
tion; the conversation then persuades the
the phone and only about 10 percent
prospect, which leads to a purchase.
Highly
Credible/
Believable
Highly Likely
to Lead
to Purchase
Source: Keller Fay Group’s TalkTrack July 2010–
June 2011
online.1 The average American consumer
engages in conversations about 10 brands
WoRD oF MouTH DRIVES SALES
per day; on average, 9 of those 10 happen
WOM drives a high degree of credibility
offline. The authors estimate there are 15
and impact that comes as a result of WOM.
billion brand impressions every week
On average, across 15 different prod-
in the United States that come via WOM
uct and service categories, 58 percent of
conversation. Further, those conversations
consumers ascribe high credibility to the
have a powerful impact: people ascribe
information they hear from others during
AT&T uses market-mix modeling to opti-
a high degree of credibility to the things
a WOM conversation; 50 percent say they
mize its deployment of media and other
they hear, and their purchase intent is high
are very likely to buy as a result of that
marketing expenditures. As with many
as a result of those conversations.
conversation (Figure 1).
marketers, the company discovered that
2
Figure 1 Percentage Rating
WOM Highly credible or Likely
to Lead to Purchase, “9” or
“10” on 0–10 scale.
The fact that most WOM discussions
Does the stated “likely-to-buy” intent
it was overwhelmed by “metrics clutter”
take place offline—again, primarily face
really lead to purchase? How much of the
as a result of literally hundreds of different
to face—means that marketers cannot rely
purchase can be attributed to the word-
data series.
on the magic elixir of social media to drive
of-mouth conversation rather than other
Management wanted to know which
those conversations. Instead, they need to
forms of marketing activity—including
metrics—in addition to media—had the
deploy a more robust set of tools to drive
advertising—that also could drive sales?
greatest impact on sales of new wireless
brand advocacy. For instance, nearly half
Is WOM really a metric that companies
accounts (“gross adds”3) and on discon-
of all conversations about brands make
should focus on as part of their brand
nects (“churn”). Using structural equation
reference to some type of media or market-
health dashboards?
modeling and other statistical techniques,
ing, be it advertising, point-of-sale activ-
In recent years, market-mix modeling
AT&T created a purchase-funnel model
ity, a brand Web site, or another consumer
has allowed the marketing community to
that identified which metrics had the most
touch-point.
delve more deeply to answer those ques-
significant influence on gross adds and
In the remainder of this article, the
tions. And the answer is a resounding
which other so-called “upstream” metrics
authors discuss the latest research about
affirmation that WOM matters in signifi-
drove these key metrics. Among the many
the central role that WOM advocacy plays
cant, quantifiable ways.
findings, the analysis discovered that posi-
in the consumer marketplace and describe
One example is provided by work con-
tive WOM was one of the most powerful
why they believe that the wall separating
ducted by Accenture on behalf of AT&T,
metrics directly influencing AT&T’s sales.
one of the largest advertisers in the
Unaided advertising awareness—a top-of-
United States and a marketer with a well-
funnel metric—also was a strong driver.
TalkTrack, a continuous research service of the Keller Fay
Group that uses a daily online survey with the assistance of
a diary to track both offline and online conversations about
brands and the forces that drive them. These surveys are
among 36,000 consumers across the United States annually,
and data are weighted to Census. The Keller Fay Group also
has a continuous TalkTrack study in the United Kingdom.
1
460
JOURNAL OF ADVERTISING RESEARCH
developed marketing-return on invest-
As a result of these findings, AT&T intro-
ment program (Pharo, Sato, and Fay, 2011).
duced WOM variables into traditional
“Adds” is the term AT&T uses for new customers
(e.g. adds is short for additions to the customer base.)
3
2
Keller Fay Group’s TalkTrack July 2010–June 2011
December 2012
WORD-OF-MOUTH ADvOcAcY
ToWARD A BETTER
ADVERTISING MoDEL
Advertising that is designed primarily to
news” are likely to be more effective than
reach prospects, especially loyalists of
ads that are primarily funny for the sake of
competitive brands, is unlikely to have an
being funny or creative for creativity’s sake.
Advertising as we know it does need to
impact because of inattention or preexist-
Ernest Dichter provided concrete ideas to
change if it is going to deliver against mar-
ing opinions that are hard to sway. You need
advertisers about ways to “earn” WOM and
keters’ expectations. The retailer John Wan-
current customers to help with the persua-
thereby earn a bigger return on their invest-
amaker famously said, “Half the money I
sion process if converts are to be won. In
ment in paid media. Although his advice is
spend on advertising is wasted; the trou-
other words, preach to the choir, providing
almost 50 years old, many of his ideas are
ble is I don’t know which half.” Amazingly
them with a melody that can, in turn, help
similar to the guiding principles that social
this is probably still true and, as the cost
them persuade their friends and family to
media and WOM practitioners deploy today.
of advertising continues to rise, advertisers are demanding a better return on their
investments.
some of these include the following:
Although this sounds like a fairly simple
idea, it involves radical changes in adver-
consumers are frustrated, too. They are
tising. For the most part, it means that
friendship” to the consumer to separate
inundated by commercial messages: on Tv
advertisers should focus less on target-
themselves from their role as “sales
screens at the checkout aisle and behind
ing prospective customers for the purpose
channel.” Examples include providing
the deli counter, on their mobile devices,
of direct persuasion. Though advertising
small but thoughtful “gift packages”
on posters on the walls of public restrooms,
aimed at creating awareness has an impor-
to say thanks; helping your custom-
tant role to play, the sale is not generally
ers to feel that they are being initiated
advertising they see is not relevant to them,
going to happen because of mere ad expo-
into an “exclusive” group by using your
or it interrupts them, or it offends them, or
sure. Instead, advertisers should be target-
product; and “establishing audience kin-
it bores them. For every award-winning ad,
ing two key types of people: the consumer
ship” through the messages and style of
consumers see or hear scores that are dull,
your advertising to illustrate that you have
vapid, or offensive. There’s no question that
information and very engaged in spreading
things in common with your customers
consumers would prefer to see and hear
information through their social networks;
and truly understand them.
advertising that is more relevant to them—
and current customers and advocates of
to their needs, their interests, their lives.
the brand who are ready to be rallied to the
Reducing the amount of irrelevant or unin-
convey the backstory of the product’s
teresting advertising would be welcomed by
is that it will reduce the amount of irrelevant
founding or the way early consumers
consumers and good for advertisers.
advertising consumers are being exposed
used it—to personalize the product and
The importance of WOM to the success
to daily, generally without much negative
create authenticity. This approach allows
of advertising is starting to be more widely
effect. It is a win–win for both the advertiser
customers to see themselves as being
recognized in creative circles. One reason
and the consumer.
connected to a long tradition or perhaps
is that ad executives are very focused on
To be effective, the content of advertis-
online social media and want to see their
ing messages should lend itself to word of
campaigns uploaded, forwarded, tweeted,
mouth. This means messages need to be
and shared. Although social media are just
simple, memorable, and worthy of sharing;
a small part of the opportunity, as this book
ideally, they should evoke emotion and dis-
demonstrates, it is helpful that “sharing” is
rupt people’s schemas, both of which com-
to a very recent innovation.
Keller, Ed, and Brad Fay. The Face-to-Face Book: Why Real
Relationships Rule in a Digital Marketplace. New York,
NY: Free Press, 2012, pp. 103–106.
pel people to share what they have learned
in advertising agencies.
with others. There are many approaches
We believe advertising works primarily by
to achieving this, and not all require a
generating conversations among informed
“breakthrough” or funny creative idea. Ad
people who then spread the news—and
messages that focus on meeting people’s
their recommendations—to new customers.
needs, solving a problem, or providing “new
December 2012
JOURNAL OF ADVERTISING RESEARCH
461
WORD-OF-MOUTH ADvOcAcY
market-mix models. The new model
Since that initial study, further analysis4
Of the brand conversations in which
used gross adds as dependent vari-
has revealed that the role of advertising in
consumers talk about advertising, televi-
able; media, pricing, product innovation,
WOM is even stronger, with 25 percent of
sion advertisements are the most preva-
messaging performance, competitive, and
all consumer conversations about brands
lent, a fact that is consistent with the fact
other relevant marketing/environmental
involving discussion about advertising
that more money is spent on television
factors were incorporated as independent
(Keller and Fay, 2012). By our estimate,
advertising than any other medium. On
variables. WOM proved to be a power-
that translates into more than 3.8 billion
a collective basis, other forms of advertis-
ful, statistically significant sales driver in
instances every week in America when
ing—the Internet, newspapers, magazines,
these models, explaining more than
consumers are exposed to brands through
radio, outdoor, and so on—are about on
10 percent of sales volume—a perfor-
WOM conversations that are sparked by
par with TV. In the authors’ view, this
mance that made it one of the top influenc-
(or include references to) advertisements.
means that all media should be considered
ers of gross adds; paid media were found
Further, although there is some variation
as candidates for driving WOM (Table 2).
to be the leading sales driver—driving an
by category, that finding still is largely true
estimated 30 percent of sales—but WOM
across categories (Table 1).
The marketing scientists at analytics
firm MarketShare recently undertook
clearly was one of the top influencers of
research that sought to document the close
gross adds.
alignment between WOM and market-
Models of this type have been constructed by other companies as well, and
the results generally confirm the conclusion that was drawn from the AT&T model.
TABLE 1
One-fourth of Brand WOM
References Ads
“Conversation” should be a top marketing
% of WoM
objective, as it contributes in significant
and quantifiable ways to sales. Talk is not
ing investment—or, more specifically, “to
highlight the significance of Social Voice
in the consumer decision journey, and to
provide marketers with specific guidance
on effective management of Social Voice
to optimize marketing investments” (Fay,
Vermut, and Baran, 2013).
Industry
Advertising
Media/Entertainment
31
of-mouth advocacy needs to be a critical
Telecommunications
29
marketing (and business) objective.
Personal care/Beauty
28
The study incorporated Social Voice data
Technology
27
into multi-year time-series modeling data
Automotive
27
The Home
27
both advertising and WOM are significant
Household Products
26
sales drivers leads to a critical question:
Retail/Apparel
25
All Category Average
25
Travel services
25
that 20 percent of WOM discussions refer
Food/Dining
24
Type of Ad
% Referenced
in WoM
to paid advertising in media (Keller and
children’s Products
23
Fay, 2009). When compared with other
Television Ad
11.4
Beverages
22
Internet Ad
4.5
sports/Hobbies
21
newspaper Ad
4.0
versations, are significantly more likely to
Financial services
19
Magazine Ad
3.0
involve recommendations to buy or try a
Health/Healthcare
18
Radio Ad
2.0
Billboard Ad
1.7
Any Other Ad
2.8
only a “nice-to-have” attribute, it’s a musthave. Learning how to maximize word-
WoRD oF MouTH MAKES ADVERTISING
WoRK BETTER
The fact that market-mix models find that
should the two operate independently, or
do they work more forcefully together?
The authors’ 2009 research indicated
WOM discussions about products or services, such “advertising-influenced” con-
brand when compared with other WOM
discussions about brands. Moreover, these
Source: Keller Fay Group’s TalkTrack July 2010–June 2011.
findings hold across a range of product
categories.
462
JOURNAL OF ADVERTISING RESEARCH
4
Keller Fay Group’s TalkTrack July 2010–June 2011.
December 2012
The article defined “Social Voice” as
online and offline brand mentions and conversations that occur among consumers.
sets that also included marketing spend
(both media ad spend and non-media
TABLE 2
Ads that spark WOM by
Medium
Source: Keller Fay Group’s TalkTrack July 2010–June 2011.
WORD-OF-MOUTH ADvOcAcY
marketing spend) and media performance, and online and offline actions and
outcomes (including sales). Brands from
a critical force to drive sales directly and also works
multiple product categories were studied,
and a typical data set included 3 to 5 years
concomitantly with marketing to drive sales.
of data on a weekly interval.
Perhaps the most dramatic of the findings is this:
Results indicate that a significant per-
Dichter provided advertisers with prac-
to trigger conversation. So, too, should
tical ideas for using paid advertising to
media planners think about how, when,
stimulate word-of-mouth reinforcement.
and where to reach consumers at moments
centage of marketing’s impact is delivered
most likely to lead to conversations and
through Social Voice—in the cases that
THE oTHER SoCIAL REVoLuTIoN
were examined, between 10 percent and
The last few years have produced two
54 percent—suggesting that Social Voice
“social” revolutions:
engagement.
WOM era is to think first and foremost
is a key element of the consumer decision
journey. Social Voice helps to bridge the
The key to marketing success in this
about social consumers rather than social
© The advent of online social-networking
media. As Paul Adams, Facebook’s global
interest
tools, emanating from Silicon Valley
head of brand design, once observed,
(driven by media) and consideration, and
and other centers of digital technology,
“You need to reorient your business
finally sales.
and
around people, not technology. Don’t have
distance
between
awareness,
© scientists working in diverse fields such
a Facebook strategy or a Twitter strategy
In other words, without WOM, marketing
as evolutionary biology, neuroscience,
or a Foursquare strategy. Map to human
would be far less effective.
anthropology, and psychology are dis-
behavior and not to technology” (Keller
And like the AT&T market mix model,
covering that emotion and social influ-
and Fay, 2012).
this study also examined the direct effect
ence are hard-wired into the human
Starting with a people strategy means
of Social Voice on financial outcomes and
brain—a revolution that may have qui-
asking first what are the stories that con-
concluded that a 10-percent increase in
eter immediate impact but also may
sumers share with one another about your
Social Voice resulted in sales lift of between
have greater long-term significance
brand or your category.
0.2 percent and 1.5 percent directly.
(Christakis and Fowler, 2010; Wilson,
Taken together, these findings confirm
2012; Brooks, 2011; Earls, 2007).
Stories are how emotions are best conveyed; people like to share stories. If a
that WOM is a critical force to drive sales
brand story fits with the consumer’s sto-
directly and also works concomitantly
Our species has evolved to be supremely
with marketing to drive sales.
ries, it will be shared; if not, it will not.
social—even “eusocial” in the parlance
It is the job of brand strategists to deter-
Although the findings are new and com-
of biologists—as we constantly are being
mine who are the people who are most
pelling, WOM marketing, in fact, is not a
affected by social cues around us. The rise
likely to talk about their brand or their
new phenomenon at all. Nearly 60 years
of online social media is an outgrowth—
category and seek to understand when,
ago, a seminal piece of research called
not a cause—of our social nature. Though
where, and why people talk. Then—and
“Personal Influence” identified the pro-
their effects are important, they are more
only then—should the focus turn to the
cess of WOM exchanges as essential inter-
limited than many marketers assume.
channels through which WOM is best
mediate steps in the communications flow,
Advertising and WOM are inextricably
between the paid message and consumer
linked: WOM has proven to be highly cred-
In this regard, it is important for market-
behavior change (Katz and Lazarsfeld,
ible and linked to sales; advertising has
ers to remember that it is not just online
1955). Eleven years later, the eminent mar-
been proven to help spark conversation.
social media that drive conversation but,
shared.
ket researcher Ernst Dichter introduced
The authors believe that the most effec-
rather, far larger numbers of conversations
the phrase “Word of Mouth Advertising”
tive advertising is advertising that gets
are being driven by television, print, in-
in the marketer’s lexicon with his Harvard
people talking. The creative side of adver-
store, out of home, and the Internet.
Business Review article, “How Word-of-
tising must embrace this reality and begin
Mouth Advertising Works” (Dichter, 1966).
designing
communications
intended
All media are social, and so is the most
effective advertising.
December 2012
JOURNAL OF ADVERTISING RESEARCH
463
WORD-OF-MOUTH ADvOcAcY
ed keLLeR is cEO of the keller Fay Group, a word-of-
United states and the United kingdom. keller’s newest
book, The Face-to-Face Book, was co-authored with
Brad Fay and published in May 2012 by Free Press/
simon & schuster. The publication of his 2003 book,
BUGHIN, J., J. DOOGAN, and O. J. VETVIK.
KELLER, ED, and BRAD FAY. “The Role of Adver-
“A New Way to Measure Word-of-Mouth
tising in Word of Mouth.” Journal of Advertising
Marketing.”
Research 49, 2 (2009): 154–158.
McKinsey
Quarterly,
April
(2010). Retrieved September 27, 2012, from
http://www.mckinseyquarterly.com/A_
n e w _ w a y _ t o _ m e a s u re _ w o rd - o f - m o u t h _
marketing_2567.
president of the Word of Mouth Marketing Association
and of the Market Research council. In 2011, he was
awarded a Great Mind Award from the Advertising
CHRISTAKIS,
NICHOLAS
A.,
and
JAMES
H.
FOWLER. Connected: The Surprising Power of Our
MORRISSEY,
Social Networks and How They Shape Our Lives.
Flexes Its Bulging Stats.” Adweek, August
New York, NY: Little, Brown, 2010.
4, 2010. Retrieved December 20, 2011, from
Research Foundation, where he was a long-time Board
member.
Book: Why Real Relationships Rule in a Digital
Marketplace. New York, NY: Free Press, 2012.
The Influentials, has been called the “seminal moment
in the development of word of mouth.” keller is a past
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Spice’s
Agency
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Word-of-Mouth
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NJ: Wiley, 2007.
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PHARO, GREG, MATTHEW SATO, and BRAD FAY.
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Marketing Association and treasurer of the Market
the Journal of Advertising Research).
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DAVID.
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