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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 KELLER, ED, and BRAD FAY. The Face-to-Face BRIAN. “Old Spice’s Agency http://www.adweek.com/adfreak/old-spicesDICHTER, ERNEST. “How Word-of-Mouth agency-flexes-its-bulging-stats-12396. Advertising Works.” Harvard Business Review 44, 6 (1966): 147–160. bRad Fay PARPIS, ELEFTHERIA. “Spice It Up.” Adweek, Group. With Ed keller, he is co-author of The Face- July 26, 2010. Retrieved December 20, 2011, from to-Face Book, published in May 2012 by Free Press/ EARLS, MARK. Herd: How to Change Mass Behav- simon& schuster. He is the winner of the Grand iour by Harnessing Our True Nature. Hoboken, Innovation Award from the Advertising Research NJ: Wiley, 2007. http://www.adweek.com/news/advertisingbranding/spice-it-102895?page=1. Foundation for the development of keller Fay’s TalkTrack, FAY, BRAD, MARC VERMUT, and RONEN BARAN. PHARO, GREG, MATTHEW SATO, and BRAD FAY. “Quantifying the Role of Social Voice in Market- “How WOM Drives AT&T’s Sales.” presenta- a member of the board of directors of the Word of Mouth ing Effectiveness” (forthcoming March 2013 in tion at the Advertising Research Foundation’s Marketing Association and treasurer of the Market the Journal of Advertising Research). Audience Measurement 6.0 Conference on June the only continuous measurement system for word of 13, 2011. Retrieved December 20, 2011, from Research council. GRINER, DAVID. “Hey Old Spice Hat- ers, Sales Are Up 107 percent.” Adweek, http://www.slideshare.net/kellerfay/wordof-mouths-role-in-driving-sales. July 27, 2010. 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