Word of Mouth – A Prescription for a Bad Economy

It looks like we’re in the big R…

2009 Anticipated Declines:

- 15% Newspapers- 13% Consumer Magazines- 10% Radio- 4% Network TV

Smart Marketers are Now Rethinking Traditionally Held Views...

AnotherChange

You Can Believe

In Is Coming

…

Word of Mouth is Catching On…in All Its Forms

Buzz Marketing Social MediaCustomer Collaboration Brand Communities

User Generated Content

Influencer Marketing Social Networks Referral Programs

Grassroots/CauseMarketing

ExperientialMarketing

Viral Marketing

The Fastest Growing Marketing/Media Segments

Expected 5 year Compound Annual Growth Rate

Word of Mouth 27%Internet/Mobile 14%Branded Entertainment 13%Custom Publishing 11%Others 10%

Fact - Most Traditional Media is an Inefficient Cost…

…Word of Mouth is a Wise Investment

7 Reasons Why

Word of Mouth

Deserves Your

Consideration

In This Economy

Reason #1 – Word of Mouth Gets Noticed

- 4% any ad recall from last TV show watched (down from 34% in 1965)

-70% of people frequently consume multiple media simultaneously

- 93% of people believe word of mouth is the most reliable way to find out information about products and services

Reason #2 – Word of Mouth Stimulates Action

- 90% - proportion of people who canskip ads, do skip ads

- 70% - percentage of people affected byword of mouth conversations

- 37% buy it/try it- 24% consider it- 9% avoid it

Reason #3 – Word of Mouth is a Competitive Advantage

- Only 1-2% of marketing budgets are currently spent directly on creating word of mouth

-Year Round Community - $100-500 - Word of Mouth Campaign - $40-150 -Blog /Social Media Outreach $30-100 against the Typical Research

- A 7% increase in positive word of mouth equates to 1% business growth

Reason #4 – Word of Mouth Targets Influence

- With rare exception (i.e. magazines), mainstream media has a tough time targeting audiences and specifically influencers

- 70% of Wikipedia’s content is produced by 1.7% of its audience

- Top ranked Influencer belief – “I love talking to others about things I’ve just discovered”

Reason #5 – Word of Mouth is More Trusted

60% of people have a much more negative view of marketing and advertising than a few years ago

27% trust manufacturers

14% trust ads

8% trust celebrities

Word of mouth is the #1 trusted source, up 50% vs. a generation ago

61% of people claim to buy the same brands as their friends

82% trust their friends

Entertainment Value Information Value

Entertainment Value Informational Value Explicit value (rewards) Intrinsic value (feeling of belonging) Experiential value (immersion) Social value (making connections) Talent value (expressing skills/creativity) Service value (adds to the product) Collaborative value (1+1=3)

Mass Media Provides:

WOM Provides:

Reason #6 – Word of Mouth is More Customer Centric

Reason #7 – Word of Mouth is the Now & the Future

Marketers plan on spending more/less in 2009:

More LessNewspaper 5% 32%Radio 5% 33%TV 4% 37%Magazines 3% 39%Social Media 23% 16%

58% of marketers agree thatword of mouth influence will overtake traditional media influence within a generation

73% of marketers believe marketers will become much more important in an organization by leveraging word of mouth strategies and tactics

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Integrated Brand Community-building Influencer-driven Challenge/interventionGrassroots sponsorship/cause-driven

Offline Experiential Buzz/Guerrilla

Online Social Media Production/Outreach Viral User-generated

We plan, seed, incubate execute, measure, live and breathe the spectrum of word of mouth

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