On Digital

If you’re not already using word of mouth campaigns for new product/service launches because of uncertain ROI, you need to read this! Research recently released by word of mouth companies BzzAgent and ChatThreads suggests that word of mouth may be measurably more effective than one of the current gold standards for online sales conversion: search engine advertising.  Furthermore, word of mouth campaigns may be 20-60% more cost-effective for branding than other media. Read on for details.

Intent to Purchase / Sales Findings

BzzAgent’s research shows that intent to purchase among participants in word of mouth campaign conversations ranges from 10-15% depending on the sector (people apparently love talking about food & candy):

Word of mouth campaigns have occasionally played an important role in the marketing of new entertainment and media (movies, music, books and games), but research to establish the major drivers of success has produced mixed results.  As a result, social media spend and monitoring is still a relatively small portion of the overall entertainment media spend.

However, a new research paper by Dellarocas, Zhang and Awad, has used different analytical techniques to demonstrate that – among other factors like box office revenue, marketing budget and star power – a movie’s early word of mouth (quantified as volume of online movie reviews, tone of review and the gender mix of online reviewers over the first few days of a movie’s release) has a significant impact on forecast movie revenues.

In the face of uncertainty in new media spending – What’s the ROI for blog outreach? Do widgets produce measurable returns? Is spending on word of mouth scalable? – it’s tempting to retreat to the familiar.

One rough rule-of-thumb for media/ad spend is the 70/20/10 rule (see What Sticks by Rex Briggs and Greg Stuart).  The rule suggests something along these lines: spend 70% of time/resources on proven techniques and media, 20% of time/resources on slight variants of proven techniques and media; and 10% on tests of brand new media and techniques.

In the aggregate, this model might make sense.  But, as always, the devil is in details: what’s proven media and technique for one product stage may in fact be unproven at another product stage; high-ROI media for one product stage may be low-ROI when deployed at a different product evolution stage.

This blog is for professionals and individuals who want to successfully create, launch, build awareness of and sell great products/services in the most efficient way possible.  People who’d find the content interesting include: CEOs, CIOs, CMOs, brand and product managers, and advertising & media professionals.

The primary content focus of the blog is on harnessing new technology to market and sell innovative products and services.  Innovation is necessary to compete, but it isn’t just about building better things or providing better services – it’s also about intelligently using tools to connect those great new ideas with the people who (will) love them.

Finally, for innovation to be sustainable, it has to deliver value profitably.

Here are some ideas (from myself and others) on how to harness new technology to make this all click.  Please join in the conversation!