The
Irresistible
Outbreak of
Trust
A Viral Marketing eBrief
Wedgewise Ltd (www.wedgewise.com),
May, 2004
Easy transfer version
Viral Marketing eBrief
Viral marketing is replacing traditional marketing because it allows
low-cost, rapid, highly targeted, personalized, and therefore extremely
effective, communication and propagation of marketing messages to existing
and potential customers, by leveraging relationships of trust
 |
It can be recalled that of the three major marketing
approaches, only viral marketing allows highly targeted and personalized
communication to existing and potential customers, capitalizing on
relationships of trust, but necessitates very satisfied customers
|
- Mass marketing (also known as spam when the message is
transmitted by e-mail) involves communicating in an impersonal fashion
with all (or a large number of) potential customers
Mass marketing (sketch, thickness of lines reflects personalization,
and hence effectiveness of the marketing message)
- Direct marketing entails communicating in a somewhat
personalized fashion with a fairly targeted subset of potential customers,
about whose preferences something is known
Direct marketing (sketch, thickness of lines reflects personalization,
and hence effectiveness of the marketing message)
- Viral marketing harnesses highly targeted and personalized
communication with existing customers (because it is much easier to query
them about, and note their preferences), who are motivated to recommend the
message to family, friends and acquaintances, again through highly targeted
and personalized communication (the referrers tailor the message), thus
leveraging relationships of trust
Viral marketing (sketch, thickness of lines reflects personalization,
and hence effectiveness of the marketing message)
- It should also be recalled that for it to succeed, viral
marketing pre-supposes that existing customers are very satisfied, otherwise
they will not take the time or effort to pass on the message
Characteristics of marketing methods, by type
|
Type |
Description |
Situation where most useful/effective |
|
Mass |
Promote
a product/service indiscriminately to all potential customers |
No
information about potential customer preferences |
|
Direct |
Promote
a product/service only to potentially profitable customers |
Some
information about potential customer preferences |
|
Viral |
Motivate
existing customers to persuade family/friends/acquaintances to
undertake a desired action |
Very
satisfied customers |
Source: Websites, as observed in April, 2004
|
·
Viral marketing is flourishing because it is low-cost, simple
to implement, rapid, scalable, allows leveraging online communities, and has
become a fad
|
-
Consumers bearing part of the cost of propagating a marketing message is
generally attractive in a cost-conscious economy
- Low
barriers to entry
- The
Internet allows low-cost and accelerated transmission/propagation
-
Scalability
-
Tightness of online communities, among which a recommendation can be
transmitted with greater confidence
-
Get-rich bandwagon effect, notably since such high-profile successes as
Hotmail (acquired by Microsoft in January, 1998 for up to an estimated US$
400 M) and ICQ (purchased by AOL in June, 1998 for nearly US$ 400 M)
-
Fashionable
|
·
Among the
three types of viral marketing encountered, success
depends on maximizing the pass-along rate from person to person
|
Characteristics of viral marketing campaigns, by type
|
Type |
Objective |
Incentive? |
Customer
motivation |
Key
Success Factors |
|
Value |
Brand-building |
N |
Share a
quality experience |
Seen by
largest number, and hence quality of experience and ease of referral |
|
Instrumental |
Purchase
product/ service |
N |
Share a
quality experience, which requires certain products |
Low cost
of required product relative to quality experience |
|
Incentive |
Purchase
product/ service |
Y |
Qualify
for an incentive |
Immediateness of incentive |
Source: Websites, as observed in April, 2004
|
·
Best practices encountered revolved around an inherently
infectious product/service/campaign, leveraging existing/creating demand,
offering incentives, positioning the vendor and the process as trustworthy,
granting a free trial period, motivating/making it easy for the customer to
refer, and back office functions
|
Best practices in viral marketing campaigns, examples
|
Best
practice |
Examples
(campaigns/products/firms) |
|
Inherently infectious product/service, or viral marketing campaign |
|
|
Products/services whose value to existing customers grows when the
number of users increases |
Hotmail,
ICQ, PayPal, Love Monkey, plaxo.com |
|
Use of
the product/service incites others to become a user |
ICQ,
Napster, Kazaa, Gnutella, PayPal, Love Monkey (college dating),
Tumbleweed (sensitive document transmission online) |
|
Behaviors of the target community carry the message |
Hotmail,
ICQ, Motley Fool, Mobliss (wireless content), American Idol II (TV
series), Club Photo (photo developer offering free online photo
albums) |
|
Products/services that invoke a passion (eg Harley Davidson
motorcycles) |
Harley
Davidson motorcycles |
|
Cool
factor (right feel, or perceived as fashionable or trendy, seen from
the customer’s perspective) |
AmIHotOrNot.com (photo evaluation), Mountain Dew (10 proofs of
purchase & $35 for a Motorola pager, target: kids), All Your Base Are
Belong to Us (video game), Mahir (Turkish man’s homepage),
ishaggedhere.com (sexual adventures blog), Deloitte Consulting
(Bullfighter jargon buster) |
|
Fun |
BlueMountain.com (online greeting cards), Singapore Airlines (ecard
campaign), Passthison.com (online greeting cards), Jockey (men’s
underwear, “Make-a-Flake” campaign) |
|
Materialize the product’s message |
Scope
(consumers can send a customized & animated email "kiss" to their
friends, reinforcing the branding message that the mouthwash brings
people "Kissably close") |
|
Interactive games that motivate existing users to challenge their
friends to play |
IBM,
Ford, GM, Nike, Burger King, Babel Media, Passthison.com |
|
Stage
events that demonstrate the product |
Trivial
Pursuit, Pictionary |
|
Leverage
existing demand, create new demand |
|
|
Target
population focus, especially opinion leaders |
DOS,
Windows, CNN |
|
Build a
large community, with common needs |
Napster,
Kazaa, Gnutella, Babycenter.com, Spiderman (film), The Matrix (film),
Queer as Folk (TV series), Southwest Airlines, Krispy Kreme Doughnuts,
Build-A-Bear Workshop, Dallas Mavericks, O'Reilly & Associates,
SolutionPeople, IBM |
|
Exploit
the strength of weak ties (individuals with many casual social
connections have a larger influence on communities) |
Tupperware, Amway (para-pharmaceuticals), Avon,
Mary Kay Cosmetics |
|
Offer
incentives |
|
|
Chance
of winning a prize |
Sony
Music (Taiwan), ePrize, Fujitsu PC |
|
Offer
incentives that existing customers actually want |
AllAdvantage.com (pays to track online behavior & serve ads while
people are online), Epinions (cash/100 hits), MyPoints.com, Etrade.com,
Ebates.com, Mercata.com (“PowerBuy”, price of item goes down the more
people buying it simultaneously), More.com (prices on products
purchased during charter period will never increase), gazooba.com
(users offered incentives to recommend websites to others) |
|
Attractive value proposition in call-to-refer |
Tripeze.com (contest giving away two free airline tickets/day),
Danier.com (leather retailer, vouchers), ebrick.com (etailer, special
deals & discounts), Computer.com (computer-related advice portal) |
|
Vendor/process positioning as generating bona fide referrals |
|
|
Honesty
(recipient of the referral must believe the referrer is providing an
honest endorsement) |
Hotmail |
|
Trust in
the vendor by the customer, built up over time |
Epinions,
eComplaints, ciao.com |
|
Free
trial period |
|
|
Structure pricing such that usage of the product/service is free in
the beginning |
Intuit’s
Quicken |
|
Incite
potential customer to refer, facilitate actual referral |
|
|
Personalize each message, based on known customer preferences |
Amazon |
|
Encourage to refer |
Hotmail,
ICQ |
|
Compelling call to refer |
BlueMountain.com |
|
Ease of
referral |
Hotmail,
ICQ, BlueMountain.com |
|
Back
office |
|
|
Cap
incentives to avoid spam-like distribution of your message |
AllAdvantage.com |
|
Track
and analyze results (notably e-mail pass-along rates), using software
that measures viral activity, in order to be able to capitalize/
control success/unwanted side-effects |
|
|
Contingency plans in case a campaign develops in the wrong direction |
AllAdvantage.com |
Source: Websites, as observed in April, 2004
|
·
Where available, the most successful viral marketing
campaigns exhibited an inherently infectious product/service/campaign, or
offered an incentive, or several best practices combined
|
Results of viral marketing campaigns, main approaches used
|
Campaign |
Results |
Main
approaches used |
|
AmIHotOrNot |
120
M/month page views |
Cool
factor |
|
Hotmail |
75 M
users in first year |
Products/services whose value to existing customers grows when the
number of users increases; Behaviors of the target community carry the
message; Honesty; Encourage to refer; Ease of referral |
|
Jockey |
17 M
page views in first month |
Fun |
|
ICQ |
12 M
registered users in first 22 months |
Products/services whose value to existing customers grows when the
number of users increases; Use of the product/service incites others
to become a user; Behaviors of the target community carry the message;
Encourage to refer; Ease of referral |
|
AllAdvantage |
2 M
active users in first year |
Offer
incentives that existing customers actually want |
|
Ebrick.com |
492 K
unique visitors/month in first month, unknown how many before |
Attractive value proposition in call-to-refer |
|
Epinions |
300 K
reviews of 100 K products in first 6 months |
Offer
incentives that existing customers actually want; Trust in the vendor
by the customer, built up over time |
|
Babel
Media |
200 K
unique visitors in first 10 days |
Interactive games that motivate existing users to challenge their
friends to play |
|
Fujitsu
PC |
50 K
registrations in first 6 weeks |
Chance
of winning a prize |
Source: Websites, as observed in April, 2004
|
·
Potential challenges mostly focused on the lack of control
inherent in allowing customers to decide what/to whom/how to pass on
|
Potential challenges in viral marketing campaigns, and examples
|
Potential challenge |
Examples/counter-examples (campaigns/products/firms) |
|
Heavy-handedness |
MCI
(mass marketing telephone calls during dinner hours), Hotmail (it was
remarked that if Hotmail had appended its promotion as part of the
body of the sender’s e-mail message, rather than as a separate note at
the bottom, the campaign might very likely have expired before it got
off the ground) |
|
Association with unwanted, negative people |
Online
book reseller with affiliate program, neo-Nazi site signs up |
|
Campaign
thought offensive/poorly received can backfire, spreading negative
image widely |
Puma
(images of couple wearing Puma sneakers in sexual position, although
some suggest that Puma masterminded for buzz effect) |
|
Brand
control (message modified/transmitted to people outside target
audience) |
|
|
Cap
incentives to avoid referrers turning the campaign into a business |
|
|
Campaign
morphs into a spam deluge, especially in incentive campaigns, which
can damage the marketer’s reputation |
Phonefree.com (viral campaign involved getting people to register for
the service, then downloading their address books, and contacting
everyone in them with the message, "Register for free long distance
phone calls with us, and you can talk to so-and-so who just signed
up!") |
|
Lack of
measurement |
|
|
Uncharted growth (necessitating, for example, adequate infrastructure) |
Hotmail |
Source:
Websites, as observed in April, 2004
|
·
Publicly-available research indicates that people are
naturally extremely viral, because they try things recommended by friends
and pass on the message to others, but few viral marketing campaigns
actually succeed
|
- (no
source, mentioned January 7, 2000) 64% will try something if it is recommended by a friend
- A
Jupiter Media Metrix study (mentioned
July 19, 2001),
with regard to e-commerce sites, found that
. 45 % of
|
