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E-word-of-mouth

E-word-of-mouth. A study of the strategies and theories underlying social media, viral marketing and branded communities By Ming Zhao. WORD OF MOUTH. Personal source Positive, and especially negative WOM have the ability to quickly become wide spread

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E-word-of-mouth

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  1. E-word-of-mouth A study of the strategies and theories underlying social media, viral marketing and branded communities By Ming Zhao

  2. WORD OF MOUTH • Personal source • Positive, and especially negative WOM have the ability to quickly become wide spread • Such effect is multiplied with online interactions • words can travel to many in a very short amount of time • Cost effective • http://www.sas.upenn.edu/~jgasper/courses/ABM/ViralMarketing.html

  3. Currently Practiced Forms of Word of Mouth • Social media: blogs and podcasts (45%) • Social networks (42%) • Buzz/Guerrilla Marketing (25%) • Influencer Programs - 23% • Brand Experience Initiatives (21%) • Viral Ads (18%) • Brand Communities (16%) Source: Agent Wildfire Research 2008 • Brand/Customer Community-building WOM • Social Media Production/Outreach WOM (i.e. blogs, podcasts) • Social Network Production/Outreach WOM • Viral Marketing/Advertising WOM

  4. What is social media? Wikipedia says: Social media are primarily internet-and mobile-based tools for sharing and discussing information among human beings. The term most often refers to activities that integrate technology, telecommunications and social interaction, and the construction of words, pictures, videos and audios. The interaction, and the manner in which information is presented, depends on the varied perspectives and “building” of shared meaning among communities, as people share their stories and experiences. Businesses also refer to social media as user-generated content or user-generated media.

  5. Common social media applications

  6. Social media marketing • SM Marketing relies on the audience to distribute and engage in the dialogue and sometimes the creation of additional content. • Its about engaging, communicating via a dialogue and interacting with people. More so customers. • Increasing traffic to a site by links, brand awareness and well attention. • You pay attention to what your customer/user wants and needs! • You do this by listening, interacting, chatting. • One does this by having a presence on social networking sites and channels. http://wiki.beingpeterkim.com/

  7. What is viral marketing？ “Viral marketing refers to marketing techniques that use pre-existing social networks to produce increases in brand awareness or to achieve other marketing objectives (such as product sales) though self-replicating viral processes…It can be word-of-mouth delivered or enhanced by the network effects of the internet” ---Wikipedia

  8. Viral marketing • Simply relies on the audience to distribute the objective-Uses social networks like Facebook, MySpace,  Linkedin, Twitter to help achieve an objective…i.e sales, brand awareness, etc • This objective is obtained by a “Viral Action”. This action is people passing  on the content such as video, picture, an application, banner, heck even just word of mouth. • Bottom Line: Viral relies on the audience to spread the message with little or no interaction. Its a one time interaction.

  9. Framework for viral marketing—M.R.Subramani and B.Rajagopalan, 2003

  10. Three factors making things go viral According to the “tipping point” • The law of few: the connector; the maven and the salesmen • The stickiness factor • The power of context

  11. What is brand community? “Brand community is a specialized, non-geographically bound community, based on a structured set of social relations among admirers of a brand.” (ALBERT M. MUNIZ, JR. THOMAS C. O’GUINN, 2001)

  12. Advantages of building a brand community DIRECT BENEFIT INDIRECT BENEFIT New distribution/selling/customizing channel Superior innovation/solutions Galvanize employee/vendor Organizational wide costumer-centricity • Better insight and quicker feedback • Competitive intelligence / market needs • Prepare launches/market introductions • Runaway word of mouth/evangelism • Reduce customer support costs

  13. Power of the community Among community members: 91% believe community enables them to give candid feedback 82% were more likely to recommend the company to others 76% felt more positively about the company Community users remain customers 50% longer than non-community users. (AT&T, 2002) 56% percent of online community members log in once a day or more (Annenberg, 2007) Customers report good experiences in forums more than twice as often as they do via calls or mail. (Jupiter, 2006)

  14. Categories of E-WORD-OF-MOUTH actions--John Eaton • Viral marketing refers to the practice of a marketer creating an internet promotional vehicle to draw attention to a brand, most often in the form of an email or website address link that is distributed online by consumers. • Brand communityrefers to a specific classification of a social network that revolves around a particular brand.

  15. TWO MODELS OF INFLUENCE normative influencing Where recipient behavior is based on interpreting the information provided by the influencer as an implied expectation to confirm. Underlying mechanism influencing actions are: Identificationandcompliance Informational influencing Where recipient behavior is based on a personal evaluation f the information provided by the influencer. Underlying mechanism influencing actions are: Internalization

  16. other underlying theories • The law of the social few • Social information processing theory • Social presence theories • The 50-20-10-1 rule 50% of people will passively participate 20% will actively and frequently consume/trade content 10% chime in opinion/rate and vote on content 1%develop and innovate content

  17. Conclusion and some questions for discussion • E-word-of mouth is more effective and persuasive than traditional marketing • There are disadvantages too: negative e-word of mouth can snow ball more quickly than positive e-word-of-mouth Is e-WOM marketing better for creating awareness for a brand or for inducing consumers toward purchase? • If you are the salesman for the “smart“ car, when consider social media marketing, will you prefer viral marketing to branded community strategy? And why? • In general, what is the context in which these strategies work and the characteristics of products and services for which they are most effective?|

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