There has been an awakening. Understanding the role of advertising in word of mouth.

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 1

Julian Erben, Strategic Planning @ BBDO Proximity Worldwide

Advertising Word of Mouth The action of calling something to the attention of the public by paid announcements in newspapers and magazines, over radio or television, on billboards, and online.

An oral or written communication process, between a sender and an individual or group of receivers, regardless of whether they share the same social network, with the purpose of sharing and acquiring information, on an informal basis.*

*Ana Margarita Barreto, The word-of-mouth phenomenon in the social media era, International Journal of Market Research, 2014

Let’s start from the beginning...

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 3

Katz and Lazarsfeld‘s Two-Step Flow Model (1955)

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 4

„Mass Media“

Opinion leaders

Wider population

„Advertising can not sell against personal influence“

ERNST DICHTER

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 5

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 6

The Mad Men… enamoured of their brilliant creativity and their ability to persuade the mass market through the power of their ideas…

to October 2015

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 7

8

Ad agency models are breaking. Measurement models are outdated. The term advertising should be dumped.

BRAD JAKEMAN, PEPSICO

Source: Adage.com, Oktober 2015

“ „

We live in the too-much-

information age. Athens | Dec 21, 2015 There has been an awakening. Understanding the

role of advertising in word of mouth. 9

10

IT‘S GETTING HARDER AND HARDER TO CONTAIN

ATTENTION.

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 11

Source: 1PageFair and Adobe 2015 Ad Blocking Report, 2Fractl & Maz, Inbounc vs. Outbound: consumer perspectives on Marketing, 09/2015

Nearly 2 in 3 millennials (18-34) use

ad blockers2

21.8 bn in ad revenue blocked in

20151

„You have a world where a wealth of information creates poverty of attention. The way people get

through is by turning to people they trust.“

KEN MEHLMAN

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 12

People talk.

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 13

The average American talks each day about roughly 10

brands.*

The truth is: Brands are a major currency of conversation.

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 14

*Source: Keller and Fay, 2012

Yes, great experiences get people talking, but...

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 15

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 16

Source: Keller and Fay, 2012

...so does advertising and marketing

25%

30%

45%

telling someone about an ad

telling someone about other forms of marketing (retail, coupons, direct mail, PR) other

There is an either-or-misperception between advertising and WOM

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 17

The reality is: the typical conversation about a brand stimulated by advertising is

between 3 and 5 minutes in length

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 18

Source: Keller and Fay, 2012

75% occur face to face 15% happen by phone

just 10% are online

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 19

Source: Keller and Fay, 2012

90%

All media are social, so is the most effective advertising.

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 20

Who are the advocates at the centre of the conversation?

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 21

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 22

Influencers Current customers

BRAND ADVOCATES

„Not only do influencers generate far

more word of mouth than noninfluencers do, but each message has four times

more impact on a recipient‘s purchasing decisions“

MCKINSEY & COMPANY

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 23

Believability

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 24

Believablitiy of WOM on a scale from 0 to 10 55%

25% 20%

9 to 10 7 to 8 lower than 7 Source: Keller and Fay, 2007

How does this impact our understanding of the advertising model?

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 25

Half the money I spend on advertising is

wasted; the trouble is I don‘t know which half.

JOHN WANAMAKER

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 26

“

„

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 27

„We believe advertising works primarily by generating conversations among informed people who then spread the news — and their

recommendations — to new customers.“

AD

Prospect

AD

Informed People

Prospect

NOT: INSTEAD:

Source: Keller and Fay, 2012

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 28

Advertisers should target two key types of people:

Influencers Current customers &

Advocates who are already rallied to the cause

Planning to spark and retain

conversations

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 29

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 30

Direction Momentum

Planning and Strategy for giving a brand...

1. Be interesting 2. Be objective 3. Be useful 4. Know your cues

1. Earn trust and respect 2. Be disruptive 3. Utilize emotion 4. Make talking easy 5. Use data

[ [ ] ]

Giving a brand direction

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 31

1. Be interesting: have a strong brand story, and know your topics

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 32

„You should try _____, it‘s _____.“

„Can you believe _____ did _____?“

„There‘s nothing better than ____ for_____.“

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 33

„If bar staff can tell a story to a drink, it gets a bigger tip“

ANDY ENGLAND EVP and CMO @ MillerCoors

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 34

Image source: images.derberater.de

2. Be objective about what consumers need…

…from you.

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 35

„Marketers need to stop trying to control what their brands stand for, and listen to their

customers. We are operating in what is very much a ‚let go‘ world.“

Ed Keller

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 36

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 37

3. Be useful: communicate solutions provide answers that consumers want to pass on to others

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 40

Two common myths about WOM:

A) Word of mouth is only for the latest, hottest thing.“

B) The best way to get Word of mouth is through stunts and

gimmicks, such as outrageous TV ads, web-sites, PR events.

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 41

Source: Keller and Fay, 2012

It’s not about the “sizzle” it’s all about the steak

Top reasons why people join BZZAgent: •  To learn about the latest products •  Because they „like being one of the first people to know about a new

product“ •  Because they „enjoy sharing new products and ideas with friends and

family“ •  For the opportunity to give feedback to the manufacturers of the products

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 42

Source: Keller and Fay, 2012

4. Plan to have cues.

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Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 45

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 46

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 47

Giving a brand momentum

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 48

1. Earn trust and respect

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 49

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 50

Always be

honest.

Follow the rules.

1. Say who you are representing 2. Only say what you really believe

3. Never lie about who you are

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 51

Source: Andy Sernovitz, 2015

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 52

Say thank you

Go after negative WOMlers!

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 53

2. Be disruptive.

disrupt culture. disrupt cognitive schemas.

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 54

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 55

85% Believe that global brands have the power to make the world a better place

Source: McCann Worldgroup Study — Truth About Global Brands 2015

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Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 57

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 58

As a fast-food restaurant It‘s still privately held and owned Restaurants have never been open on a Sunday („It‘s the recipe for our success“) Local markets with daddy-daughter date night

Success indeed: 43 consecutive years of positive sales growth 2010 overall sales growth more than 11% More than 80% of conversations about the brand are positive (category average: 66%)

3. Utilize emotion.

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 59

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 60

4. Make talking easy. Give them words to use and things to share.

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 61

4% of conversations are about something from packaging In 5% of conversations, people mention something from brand website

When designing websites, social, packages, coupons, newsletters: use FORWARD thinking — make it easy to find, digest and forward.

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 62

Source: Keller and Fay, 2012

5. Use data. And not just digital data.

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Four key roles: 1) to identify the influencers

2) Regular brand health tracking 3) To monitor effectiveness

4) To drive your creative

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Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 65

Source: 1942 June 3, Florence Morning News, Mutt and Jeff Comic Strip, Page 7, Florence, South Carolina. (NewspaperArchive)

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 66

Plan to have direction

Plan to have momentum

1. Be interesting 2. Be objective 3. Be useful 4. Know your cues

1. Earn trust and respect 2. Be disruptive 3. Utilize emotion 4. Make talking easy 5. Use data

Influencers

Current customers & Advocates who are already rallied

to the cause Plan for the right target

Thank you

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 67

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 68

Recommended for further reading:

Contact

Athens | Dec 21, 2015 There has been an awakening. Understanding the role of advertising in word of mouth. 69

Julian Erben, Strategic Planning @ BBDO Proximity Worldwide

julian.erben@proximityww.com