Journal of Consumer Marketing

Word of mouth and viral marketing: taking the temperature of the hottest trends in marketing
Rick Ferguson,
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Consumer Marketing, Vol. 25 Issue: 3, pp.179-182, https://doi.org/10.1108/07363760810870671
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 Case study

Word of mouth and viral marketing: taking the

temperature of the hottest trends in marketing
Rick Ferguson
COLLOQUY, Milford, Ohio, USA

Abstract
Purpose – The purpose of this paper is to study examples of emerging marketing trends like word-of-mouth and viral marketing, and attempt to
determine their measurability in terms of return on investment (ROI).
Design/methodology/approach – The study examines real life campaigns from well-known companies and attempt to measure consumer response
beyond merely viewing or participating in the campaign. How much of an actionable response can be evoked and measured from viral and word-of-
mouth campaigns? Testimonials and commentary from marketers practicing these methods and the pundits that attempt to gauge the effectiveness.
Downloaded by University of South Australia At 08:38 17 February 2018 (PT)

Findings – The paper finds that word-of-mouth or viral marketing efforts are not always a sure bet. But a well-placed, calculated and provocative
campaign can spark a firestorm of buzz that sometimes can be effective for years in non-terminal new mediums like the internet. While the jury is still
out on finding hard quantitative ROI measurements for these campaigns, they can produce hefty returns for brand awareness.
Research limitations/implications – Tracking ROI for viral marketing and word-of-mouth marketing campaigns remains an inexact and difficult
science.
Practical implications – The paper suggest following the included Viral Commandments when creating a word-of-mouth campaign to ensure
marketing resources are put to highest and best use. It also suggests focusing on identification of the consumer as a vital step to build advocacy. Viral
marketing should not anchor marketing strategy, but when used effectively can be an important ace-up-the-sleeve.
Originality/value – The paper explores some recognizable viral marketing campaigns and studies the effects they had on product sales, consumer
advocacy and brand awareness. It teaches important factors to consider when developing word-of-mouth marketing: who is doing it well, who is not,
what lasting effects can a campaign deliver, and are there any effective ways to measure return on investment?

Keywords Marketing strategy, Interpersonal communications, Customer relations, Customer service management, Customer loyalty

Paper type Case study

Viral marketing has become the defining marketing trend of original weight of the unsmoked cigar. The difference was the
the decade. Brands big and small launch viral videos via weight of the smoke.
YouTube, post new product information on their MySpace Elizabethan bar bets aside, weighing smoke is problematic,
pages, court the blogosphere and send forth armies of if not an exercise in futility – and viral marketers face a similar
evangelists to spread the gospel by word-of-mouth (WOM). problem in measuring the return on investment (ROI) of
But without customer identification and access to customer WOM. The buzz about viral and WOM has transformed
data, are viral marketers just blowing smoke? marketing, as marketers eschew the hard work of building
In the 1995 Wayne Wang film Smoke, William Hurt’s writer customer relationships through loyalty and database
character tells a possibly apocryphal story about how marketing in favor of distracting them with such shiny
legendary English explorer Sir Walter Raleigh once made a baubles as YouTube videos and interactive adver-games.
“We are really at the early stage of a big change,” says Jim
bet with Queen Elizabeth I that he could weigh the smoke
Nail, Chief Strategy and Marketing Officer at Watertown,
from a cigar. Stop us if you have heard this one before.
Massachusetts-based Cymfony. “Companies are creating
First, Sir Walter placed an unsmoked cigar on a scale and
titles and even departments around word-of-mouth
weighed it. Then he lit up and smoked the cigar, carefully
marketing. It’s really beginning to take a grip.”
tapping the ashes into the scale pan. When he was finished, he Although WOM spending is difficult to track, the trend is
placed the butt into the pan along with the ashes and weighed clearly behind the record-setting increase in internet
what was there. Then he subtracted that number from the advertisement spending, with the Interactive Advertising
Bureau reporting that companies spent $4.9 billion on the
internet channel in the first quarter of 2007, up 26 percent
The current issue and full text archive of this journal is available at
from the same period last year. If you doubt that WOM is
www.emeraldinsight.com/0736-3761.htm
leading the virtual land rush, then note a recent Inc. magazine
study, which found that 82 percent of the fastest-growing
private companies use WOM techniques.
Journal of Consumer Marketing There is no doubt that viral campaigns build awareness. But
25/3 (2008) 179– 182
q Emerald Group Publishing Limited [ISSN 0736-3761] do they build market share? Can marketers identify or create
[DOI 10.1108/07363760810870671] brand evangelists – those consumers who actively promote

179
 Word of mouth and viral marketing Journal of Consumer Marketing
Rick Ferguson Volume 25 · Number 3 · 2008 · 179 –182

their favorite products and services to family, friends and spot is viral. The buzz it creates will be better than word-of-
business associates? Can their effect on the bottom line be mouth.”
measured? How can viral campaigns link to existing loyalty It might help the conversation to get our terms straight.
marketing efforts? Is a cool viral video really all you need to The difference between viral marketing and WOM is one of
create customer advocates – or are agencies who sell viral cause and effect. Viral marketing – which might take the form
services simply blowing smoke? of influencer marketing programs, community-building
portals, viral videos and street-level guerilla campaigns –
The modern age of viral marketing builds awareness and buzz; it’s the cause. Positive WOM,
which theoretically leads to trial and acquisition, is the effect.
Viral marketing is far from a recent phenomenon; before the The publication of Fred Reichheld’s The Ultimate Question
advent of the printing press, broadcast media and the and the continued success of such viral promotions as
internet, WOM was the only way to market your goods. CareerBuilder’s “Monk-e-mail” campaign, has convinced
The modern age of viral marketing began a bit more even the most stubborn marketers that they’re only one great
recently. In 2003, for example, the Pabst Brewing Company viral campaign away from that summer home in the
traced the epicenter of a 9.4 percent sales increase of Pabst Hamptons they have been dreaming about.
Blue Ribbon beer to Portland, Oregon, where PBR had “Marketers think that [WOM] is some new magic bullet,”
become the beer of choice for anti-establishment hipsters. says Jim Nail, who also sits on WOMMA’s board of directors.
Through sheer word-of-mouth advocacy amongst the “In fact, it’s a lot harder to do right than a television
tattooed and the pierced, PBR sales enjoyed similar spikes commercial, because word-of-mouth happens all the time
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around the country; in Chicago, sales spiked by 134 percent. whether you do anything about it or not. It really requires a
Then in April 2004, quick-service restaurant chain Burger marketer to think not just about the word-of-mouth
King launched www.subservientchicken.com – a site that marketing campaign you’re going to do this month, but also
allowed users to issue commands to a guy dressed in a chicken to think about the customer’s entire experience with the
suit – and enjoyed 20 million hits. Nobody knew if Burger brand.”
King tied the chicken to a sales increase, but it did wonders While it may not be a magic bullet, there is no doubt that
for brand awareness. successful WOM campaigns can move the needle. One of the
The Pabst and Subservient Chicken episodes, among earliest adopters of this discipline, ironically, is corporate giant
others, found marketers in every industry scrambling to Procter & Gamble (P&G), which launched its Tremor service
analyze and exploit this seeming explosion of viral marketing. in 2001 to help market products to teens through managed
With the proliferation of broadband access and its attendant
WOM techniques. Tremor has since grown to encompass
social networks, video-sharing sites and blogs, word-of-mouth
over 225,000 teen agents, and the experience led P&G to
now spreads at the speed of thought. Marketers who fear
launch Vocalpoint in 2005 as a vehicle to spread the P&G
getting run over by the WOM train are attempting to get on
gospel to its other core constituency-moms. Vocalpoint now
board, if not pilot the locomotive, with such of-the-moment
boasts over 600,000 “connector moms” who receive coupons
tactics as buzz marketing, influencer marketing and crowd-
and new product samples in the mail and then share their
sourcing.
experiences with upwards of 25-30 other women a day (the
The quest to create and measure the ROI of what used to
happen quite naturally has led to the development of a average mom speaks to just five). According to a May 29,
growing industry dedicated to managing and influencing 2006 Business Week article, Vocalpoint promotions have seen
word-of-mouth. The Word of Mouth Marketing Association unit sales in test locations double.
(WOMMA) formed in 2004 to define standards, best BzzAgent is essentially a smaller, brand-neutral version of
practices and metrics for this new discipline, has coined Vocalpoint. The company has built an army of 300,000 agent
such terms as WOMUnits, Polarity, Source Diversity, Clarity volunteers who receive coupons and sneak previews of new
and Depth to define and sell WOM marketing services in products and then march forth to evangelize. According to the
much the way that the diamond industry created the “four company’s own research, each agent shares the client’s
Cs” of diamond grading to help promote the value of the marketing message with an average of 12 other people – and
stones. Though you might think cynical tech-savvy young that’s just the first-generation contacts. Who knows how far
adults would avoid branded content, a 2006 Sharpe Partners the message spreads?
survey found that only 5 percent of consumers surveyed “To many clients, the value of what we provide is similar to
would refuse to share branded content with friends. Over 40 a decentralized focus group of tens of thousands of consumers
percent are more likely to forward branded content. who try products and then share their opinions back with us,”
“People like to talk about brands,” says Andy Sernovitz, says John Bigay, Vice President of Marketing for BzzAgent.
CEO of WOMMA and author of Word of Mouth Marketing: “We give brands quite a bit of insight into consumer opinions
How Smart Companies Get People Talking. “We now mention of their products.”
20 or 30 brands a day in the course of regular conversation. A typical WOM campaign might look like a Fall 2005
So the word-of-mouth challenge is to get people to talk about promotion conducted by BzzAgent for the Dunkin’ Donuts
your business.” chain, which enlisted 3,000 agents to promote the chain’s new
The bottom line: we are all marketers now – whether we Latte Lite drink in four test markets. The volunteers each
realize it or not. Dave Balter, founder and president of received six coupons for free Lattes and were charged with
BzzAgent, a Boston, Massachusetts-based WOM marketing self-reporting their mentions of the drink back to BzzAgent
firm, describes attending a meeting between an advertising over the 12-week test period. The goal was to gauge the
account executive and his client at which they previewed a impact on sales of the viral campaign versus sales in four
new television commercial. When the preview ended, the control markets that received only radio advertising
account executive said, apparently with a straight face, “This promotion.

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 Word of mouth and viral marketing Journal of Consumer Marketing
Rick Ferguson Volume 25 · Number 3 · 2008 · 179 –182

The results of the test supported correlation with increased computer users. The effect of viral video generally is much
sales, if not causality: sales of espresso drinks in the test more difficult to measure.”
markets rose an average of 26 percent versus an 8 percent The dirty secret of the viral marketing industry, then, isn’t
increase in the control markets. The unanswerable question, so secret after all: Outside of subservient chicken-level success
of course, is whether the WOM campaign will have staying or insanely expensive sustained WOM efforts like P&G’s
power. Does a successful WOM event build brand loyalty that Vocalpoint, viral marketing is difficult to execute successfully
translates into increased customer lifetime value (CLV)? Or and measure adequately. A 2006 Millward Brown survey, for
does it simply deliver a temporary boost on par with other example, found that only 35 percent of all U.K. consumers
one-off promotions? regularly received viral e-mails – and only 13 percent of that
“We think about word-of-mouth in terms of generations,” group passed the e-mail on. “Viral ads,” Millward Brown
Bigay says. “Academics who are measuring the space look at it concludes, “need a clearly-defined role in the overall
in the same way. Based on global averages across 300-plus marketing plan.”
campaigns, we know the average BzzAgent will talk to about
12 people. And those people, whom we call Generation One, The mouth that roared
will then talk to about four additional people. What we do not
yet have is comprehensive ability to measure the effect beyond If viral marketing is not the magic bullet, it has at least
that second generation.” become a deadly arrow in the marketer’s quiver. Going viral
confers considerable advantage: you can spread word of a new
product or service at light speed; generate buzz at the
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This one goes out to the one I love approximate level of a Hollywood premiere; and leverage
brand evangelists to encourage trial and activation. To build
Measuring the effect of viral marketing may not be quite as
true customer loyalty, however, your viral campaign must
fruitless as weighing smoke – but it is akin to navel-gazing.
connect at the front end of your customer strategy, open a
Viral marketers can measure the reach of a viral video, isolate
doorway into customer data collection, and then connect on
the incremental effect of agented WOM, and determined the the back end to engage your most valuable segments. Viral
polarity of blogosphere buzz. But can they tell you definitively content that does not encourage identification or dialogue is
that the viral campaign on which you just dropped a dime led just mass marketing tarted up for the digital age.
to increased market share? The jury is still out. “None of these sophisticated, crazy viral strategies drive
Consider the underlying problems of the Dunkin’ Donuts conversation,” says Andy Sernovitz. “And in some ways we
test: because BzzAgent did not have access to point-of-sale tend to overcomplicate the purpose of word-of-mouth. Your
information, they could not isolate Latte Lite drink purchases; customers have invested in you, they own your stuff, and they
they could only measure category espresso drink sales. The really do want to connect with you– so let them. When a
imperfect test-versus-control environment saw one control company opens up and shows a willingness to listen in an
market outperform its companion test market. These are not interactive way, that openness alone has an impact.”
fatal flaws, but they demonstrate the difficulty viral marketers The perception in some marketing circles is that viral
face in collecting actionable data. And it is not just marketing marketing can somehow replace the hard work of collecting
executives who are dissatisfied with current ROI and mining customer data. If viral is Mac Guy – cool, trendy
measurements. Interactive agencies themselves encounter and of the moment – then loyalty marketing is PC Guy –
client executives whom they sometimes have to talk down competent, but stodgy and uncreative. But is marketing a
from the diving board. zero-sum game? Or can viral techniques become an important
“Sometimes the VP Marketing or the CMO looks at one or part of your loyalty-marketing strategy?
two videos that have really broken out and says, ‘Let’s do this A 2006 Nielsen BuzzMetrics white paper advocates just this
for our company. You guys just put a cool video out there, it’ll approach: “In order to market effectively and intelligently,
get a million hits within a month and we’ll make a million you need to know your audience. Once you have pinpointed
dollars,’” says Michael Wunsch, Director of Interactive active online consumers, take the time to get to know them
Marketing for Louisville, KY-based Leapfrog Interactive. and their habits by offering opt-in programs that allow them
“Our answer is always, ‘OK: it’s great that you want viral to to engage further. Segment high-value customers and treat
become a piece of your overall strategy – but by no means is it them as special ambassadors by offering them loyalty
going to be the complete strategy.’” programs, member clubs, special offers and the like.”
The quest for reliable metrics has led some marketers away “To succeed in word-of-mouth marketing, you need to find
from viral tactics that draw short-term attention but little else that segment of real ardent fans and create special programs
to individual campaigns to tactics that allow for prospect and tools that will empower them to share that enthusiasm,”
identification and capture of behavioral data. Swiss computer says Jim Nail. “In that sense, I think viral is an extension of
peripheral manufacturer Logitech, for example, recently the loyalty discipline.”
punted their viral campaigns for a trio of adver-games To integrate viral marketing into your own customer
hosted on its web site. Players of its Ball Balancer, Jelly strategy, consider following these Viral Commandments. The
Jumper and Jellybattle games are prompted to register their marketing resources you save may be your own.
e-mail addresses and receive traceable discount coupons for
unlocking higher game levels. Use viral tactics to build awareness and trial
“The ability to measure our results was certainly P&G’s Vocalpoint campaign and BzzAgent’s army of
important,” says Garreth Hayes, European Marketing advocates have successfully tapped into a fundamental
Director for Logitech USA, of the switch to adver-games. human desire: the desire to appear trendy and in-the-know.
“We also felt that viral games were more brand appropriate We all like to share good news with our extended networks;
with a better chance of return as we try to connect with the ability to tell your friends and family about a new product

181
 Word of mouth and viral marketing Journal of Consumer Marketing
Rick Ferguson Volume 25 · Number 3 · 2008 · 179 –182

and bask in the attention is, in itself, a compelling soft benefit million. It is the type of viral campaign that will funnel
for your best customers. identifiable prospects into the Amex marketing stream and
“At its core, the thing that principally motivates our agents engage current cardholders on a deeply emotional level. It is a
is social capital,” says John Bigay. “People feel motivated and textbook example of how to generate and leverage buzz.
derive pleasure from making recommendations and talking “One way of holding viral marketing accountable is to look
about products and services.” at the rate and success of innovation,” says Bill Thompson,
Senior Vice President for San Francisco, California-based
There is no acquisition without identification Informative, Inc., which helps clients such as American
Customer identification is essential to building long-term Express, Lego and Intuit build brand-based communities. “Is
advocacy. Viral marketing without capture of customer there a way to reduce the rate of new product failure by
identification – by collecting an e-mail address, signing up talking to more customers more quickly and identifying
the customer for an opt-in program or tracking offer customer priorities? The speed of innovation is a way to
redemption – is not an effective acquisition technique. measure success.”
Metrics that end by measuring the reach of your viral
campaign only tell you how consumers responded to that
particular campaign. They cannot tell you whether any of Smoke gets in your eyes
those consumers try your products and become long-term Is viral marketing the next transformative paradigm that will
customers. Identification is the first and most important step forever alter the way businesses connect and build
in the relationship chain which leads to cross-sell, up-sell and relationships with customers? Probably not – but neither is
increased customer lifetime value.
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it simply a fad. As marketers strive to improve the ROI of viral

“So much marketing effort is now about reaching out to marketing campaigns, successful techniques will merge with
specialist groups of people,” says Garreth Hayes. “That’s why loyalty marketing efforts to capture and identify prospects at
our online viral activity has become an essential part of our the top of the funnel and build advocacy with high-value
relationship strategy. If a prospect opts in to our segments.
communications stream, we’re able to send messages that “There is no greater loyalty than that of a customer who is
we believe they’ll find relevant.” willing to spend time to tell friends about you and share
suggestions with you about how to improve your products,”
Look beyond the transactional
says Jim Nail. “If you implement those suggestions and you
The most cutting criticism of loyalty marketers is that we are
tell your customers, ‘Hey, we listened to you,’ that generates
loath to admit that transactional loyalty does not always, or
incredible loyalty.”
even frequently, equate to emotional loyalty. Viral marketers
So maybe measuring the success of viral marketing can
say their techniques are ideally suited to identify and engage
those hidden champions in your customer file. Customer become more than the equivalent of weighing smoke. Sir
potential becomes a measure not simply of propensity to buy, Walter Raleigh was a clever guy, no doubt – but he’s probably
but also of propensity to advocate on behalf of the brand. not the best role model. He was, after all, tried and executed
“A lot of companies try too hard to push their high-dollar for treason. Marketing ROI has to be more than just a way to
customers to make a recommendation,” says Andy Sernovitz. win a bar bet.
“Just because I spend a lot of money with you doesn’t mean I
have the personality to talk about you to my friends.
Recommendation behavior is not demographic, and it’s not About the author
based on purchase history. It’s a separate trait. If you have a
VIP customer list, you can invite your most active talkers to Rick Ferguson is Editorial Director for COLLOQUY and
participate in special events and forums to make them feel directs all publishing, education and research products for a
more active and closer to the brand.” global audience of marketing professionals. An acknowledged
expert in the theory and practice of loyalty marketing, Rick
Connect your advocates to product development has published numerous articles and white papers describing
Perhaps the greatest potential of viral marketing is as a the characteristics of marketing programs which seek to
platform to connect brand advocates with your product change customer behavior. He has been quoted as a loyalty
development cycle. Toy manufacturer Lego relied on expert in the Wall Street Journal, Guardian UK, Fast Company,
customer feedback through their Lego Club to identify USA Today, Forbes.com and MSNBC.com; serves as a
lucrative new product lines. Likewise, Dell Computer recently contributor to The Journal of Consumer Marketing; and writes a
launched a new web site, DellIdeaStorm.com, to allow Dell monthly column for Chief Marketer magazine. Rick has been a
customers to suggest improvements and new product lines – featured presenter at industry conferences sponsored by the
and saw over 200,000 posts in 90 days. DMA, NACS, FTMA and Terrapinn. As a senior member of
American Express has also exploited this trend with their the COLLOQUY faculty, he has delivered educational
viral Members Project campaign. Anyone can register to workshops and webinars on the principles, practices and
suggest a charitable project for Amex to fund – and technologies of loyalty marketing in the USA, UK, Malaysia
Membership Rewards members can vote to pick the and Singapore. Rick Ferguson can be contacted at:
winning idea, which Amex has vowed to fund up to $5 [email protected]

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