The Power of Influence

OFF-Line WoM more positive, persuasive and powerful than ON-Line WoM

Keller Fay and OMD Study Finds Offline Word of Mouth More Positive and Credible than Online Buzz
- Offline Conversation More Likely than Online Talk to Lead to Purchase Intent -

New York, NY, June 25, 2008 — In a first of its kind study comparing word of mouth (WOM) in online and offline venues, the Keller Fay Group (www.kellerfay.com), a market research consultancy specializing in word of mouth, and media agency OMD (www.omd.com) find that offline WOM is more positive and more likely to be judged highly credible than online talk. The findings are part of a paper scheduled to be released today at the ARF Audience Measurement 3.0 conference in New York.

Study results include:

• Word of mouth expressed face to face and by phone is viewed as highly “credible” more often than online talk (59% vs. 49%).
• Offline communication has more purely positive content than online discussion (65% vs. 59%) and is less likely to contain negative or “mixed” content (235 vs. 30%).
• A comparison between face to face communication and content via online blogs and chatrooms reveals an ever wider gap, with 66% of face to face communication “mostly positive” compared to 57% for blogs/chatrooms.
• Offline WOM is more likely than its online counterpart to lead to strong purchase intent (50% vs. 43%).

The findings are significant to marketers who, according to PQ Media, currently spend more than $1 billion annually on word of mouth strategies, and who much decide how to allocate their resources most effectively. At a time when much of the attention in word of mouth is focused on the Internet, the Keller Fay/OMD report points to significant opportunities in the offline world.

One possible explanation for the “credibility gap” between online and offline word of mouth is that online communications often can occur between people who don’t know each other very well. The study examines this possibility, and results suggest that the gap in credibility still exists even in communications between people of the same relationship. Specifically, content from a spouse, relative or best friend is rated more believable when it is shared offline, either by phone or face to face, as opposed to online via email, text messaging or blogs.

“We were most surprised to learn that we evaluate brand-related information from our spouse or best friend as more credible when it is shared face to face or by phone instead of through the Internet,” says Keller Fay COO Brad Fay, a co-author of the study. “Apparently, the value of eye contact, voice and perhaps even non-verbal communication provides a boost to credibility and to the likelihood that we’ll do something about what we’ve learned.”

“In today’s complex marketplace, brands need to find more effective ways to connect with consumers, and this study shows that both online and offline word of mouth are among the most valuable tools available to marketers,” says Sandy Eubank, Director, Business Intelligence at OMD and another co-author of the study.

On average, there are 3.5 billion word of mouth conversations that occur daily in the U.S. Offline WOM accounts for 92% of conversations (75% face to face; 17% by phone), and email, IM/text messaging and chatroom/blogs account for 7%.

While offline communication remains the predominant mode of word of mouth across all age groups (ranging from 80% among the youngest group to 97% among the oldest segment), the results indicate that teens participate in a higher percentage of online WOM (17%) than members of other age groups.  Consumers under 18 are also more likely than others to drive advice giving in online talk.  While only 13% of offline advice givers are ages 13 thru 17, 35% of advice givers in online conversations fall within this age bracket.

Who wants to talk to Brands?

Well, it seems the majority of people do.

In a recent study conducted by product review online TV site, ExpoTV, it was found that, yes, some people do actually want to "have a conversation" with a brand.

The study found:

-Consumers not only want to talk to brands, they want to establish a conversation: 55% of consumers want an ongoing dialogue with brands

-Learning about new products in the pipeline is a top priority: Respondents were most anxious to talk to the product design (49%) department, followed by customer support (14%), marketing (14%) and pricing (13%)

- Positive brand experiences can generate word-of-mouth buzz: More than 60% of those polled said they tell 10 or more people about the products they like while a third tell 20 or more people

- Listening leads to loyalty: 89% of respondents would feel more loyal to brands which invited them to participate in a feedback group, and 92 percent of those who have a positive experience communicating with a brand will recommend purchasing a product from that brand to someone they know

- Consumers are open to engaging with the competition: 93 percent of consumers surveyed would be interested or very interested in communicating with competitive brands that expressed interest in their feedback if their first choice is not interested in hearing what they have to say

Economy pushing Adspend online ...

The downturn in the U.S. advertising economy may be far more potracted than any since Madison Avenue began tracking its growth--and the chief factor, ironically, may be one of the fastest-growing sources of media spending: Online.

At least that's what advertising economist Jon Swallen is predicting from a slew of data indicating that the downturn is only partly due to cyclical economic issues such as sagging consumer spending. A bigger and much more fundamental change that will slow advertising growth into the foreseeable future, he says, is the accelerated shift of advertising budgets from expensive and highly inefficient traditional media such as TV, newspapers and magazines into much more cost-effective digital, and largely unmeasured, "below-the-line" media options.

"Some of what we are seeing continues to reflect that shift from traditional to digital media," said Swallen, who as senior vice president-research at TNS Media Intelligence has been closely monitoring which factors have been contributing to the slow growth on Madison Avenue. Last week, Swallen released an analysis of first-quarter 2008 ad spending across the major media, which showed a relatively tepid growth of just 0.6%.

More at online media daily ...

Asian and Americans see the world differently

Asians and North Americans really do see the world differently. Shown a photograph, North American students of European background paid more attention to the object in the foreground of a scene, while students from China spent more time studying the background and taking in the whole scene, according to University of Michigan researchers.

Nisbett illustrated this with a test asking Japanese and Americans to look at pictures of underwater scenes and report what they saw.

The Americans would go straight for the brightest or most rapidly moving object, he said, such as three trout swimming. The Japanese were more likely to say they saw a stream, the water was green, there were rocks on the bottom and then mention the fish.

The Japanese gave 60 percent more information on the background and twice as much about the relationship between background and foreground objects as Americans, Nisbett said.

Note that last comment – Japanese (and I suspect that this is broadly true for Asians) observe and place import on the relationship between things. 

Asian’s do indeed tend to see of the context as more important than Westerners – and this needs to be born in mind when developing products and campaigns.

Think of one of the most well known Asian brand personalities – The Singapore Girl, she is largely characterized by how she interacts with her context – rather than for standalone attributes.

Could this be one reason  why word of mouth marketing (where brands are discussed in context) works so well here in Asia?

TV Ads 'a Waste of Money' for the Back-in-Black Gap

40% Jump in Profits Indicates that spending your advertising/media budget on improving your product and experience delivers better ROI than advertising

By shunning TV, Gap looks to turn itself around.

The brand once known for its peppy, elaborate commercials has struggled in recent years to attract consumers in an increasingly competitive retail environment. But now that it's shelved TV advertising -- the brand has been off the airwaves for several quarters -- and is focusing on merchandising initiatives, Gap seems to be on the right financial track.

Marketing expenditure at Gap Inc. was trimmed 18% during the quarter, driven by the absence of TV ads for the Gap brand, company executives said. That contributed to a 40% jump in profits at Gap Inc., compared to the same period a year ago.

"At Gap brand ... they are on a journey," Gap Inc. Chairman-CEO Glenn Murphy said during a conference call with analysts last week. "They are moving the brand in the right direction, and we are delivering on driving our healthier margin dollars."

The move revives the old argument of whether it's wiser for a troubled company to spend on advertising or hunker down to protect the bottom line -- one all the more vociferous today given the state of the economy.

Reducing adspend has not hurt like for like sales YOY which only fell 7% while Old Navy (who is still advertising) fell 18%. Gap reports a 40% boot in profitability, compared to JC Penney (down 50%), Kohl's (down 27%) and Macy's, which posted a $59 million loss

Full article here

Conclusion: GAP is following in the path of Jeff Bezos, who's own test for Amazon revealed that using their ad/media budget gave better return when used to subsidise shipping (ie reducing the cost of the product)

 

Beauty and Truth

Were they retouched .... weren’t they retouched? 

Long post, so’ll put my conclusion here:

 I guess we’ll never know the real truth – I certainly would like to believe that they were not touched up and the campaign still has authenticity.

What is easy to see from this though, is the level of distrust there is. We all so quickly accepted (and some people continue believe) that we were lied to, and that when that is so contrary to the brands position the news, fueled by indignation spreads like wildfire ... maybe this is the real lesson.

Post:

Ogilvy and the Dove have come out on the offensive to defend their campaign – AdAge prints a piece 2 days after the original with their counter claim  “Marketer and Celeb Photographer Deny Reports of Retouched Images for Campaign”    reads the headline.

And John Bell, who heads up Ogilvy PR’s latest interactive discipline designed to manage brands - The 360° Digital Influence team – drops a comment on my blog

“Simply put - you have it all wrong.
The photos were not retouched. The brand came out with a clear statement about it ableit a little late for the speed of our digital world.
http://adage.com/article?article_id=126945
Be careful not to be too quick to jump on the bandwagon ultimately fueled by trade press' need to sell papers. While I did not work on the Dove campaign, I strongly believe their heart and their practice was firmly where it needed to be - challenging the media's portrayal of women's beauty. As a father of a "beautiful" 10 year old daughter, I am grateful for what a traditional advertiser did to challenge status quo".

Having had the opportunity to chat with John in the past I am sure that he is genuine – and this is not simple PR Spin.

 But the debate rages on ... and in fact grows more complex.

James Danziger who runs a New York Gallery – Daniger Project – writes on his blog that there is some confusion over who shot the images in question. He also claims that The New Yorker is standing by its article

These, according to him are the images shot by Leibovitz

And these images – more widely used – were shot by a British photographer Ranklin.

Dove’s full press releases (below)

Statement from Dove about The New Yorker Article

Dove's mission is to make more women feel beautiful every day by widening the definition of beauty and inspiring them to take great care of themselves. Dove strives to portray women by accurately depicting their shape, size, skin color and age.

The "real women" ad referenced in recent media coverage was created and produced entirely by Ogilvy, the Dove brand's advertising agency, from start to finish and the women's bodies were not digitally altered.
Pascal Dangin worked with photographer Annie Leibovitz (Ogilvy has never employed Mr. Dangin on the Dove Campaign for Real Beauty), who did the photography for the launch of the Dove ProAge campaign, a new campaign within the Campaign for Real Beauty. There was an understanding between Dove and Ms. Leibovitz that the photos would not be retouched - the only actions taken were the removal of dust from the film and minor color correction.

"Let's be perfectly clear -- Pascal does all kinds of work - but he is primarily a printer - and only does retouching when asked to. The idea for Dove was very clear at the beginning. There was to be NO retouching and there was not," confirmed Annie Leibovitz, commenting on the ProAge campaign.
Mr. Dangin responded, "The recent article published by The New Yorker incorrectly implies that I retouched the images in connection with the Dove "real women" ad. I only worked on the Dove ProAge campaign taken by Annie Leibovitz and was directed only to remove dust and do color correction -- both the integrity of the photographs and the women's natural beauty were maintained."

 

Lied to ...again

Ogilvy and Mather has earned many a plaudit for the thinking behind Dove ‘s Campaign for real Beauty.   

And kudos too to the brand owners Unilever for going with the contrarian position.

BUT now it seems that the whole thing lacked true authenticity. And consumers have been lied to again.

Those images of supposedly real women had been extensively retouched to make them “poster ready”  attractive. 

Advertising Age  reports that Pascal Dangin, master retoucher (I think poseur speak for DI artist) in an interview with the New Yorker , spills the beans that they had been heavily “improved”

"I mentioned the Dove ad campaign that proudly featured lumpier-than-usual 'real women' in their undergarments," wrote Lauren Collins in the New Yorker article. "It turned out that it was a Dangin job. 'Do you know how much retouching was on that?' he asked. 'But it was great to do, a challenge, to keep everyone's skin and faces showing the mileage but not looking unattractive.'"

What a pity the brand could not truly embrace the position and that O&M actually simply did more of the same by serving up retouched unreal images to sell a product.

Just watch for the backlash from duped consumers who feel let down by a brand that did not walk the talk.

Marketer can not live by reach alone

Look at it this way

Conversion = reach x trust x some constant factor you cant change ie:

No reach – no one know about you, no sales
No trust – no one believes in your product/brand, no sales

Reach is expensive – and getting more so every year
Trust is free, always has been, always will be ...... (but you have to earn it rather than buy it)

With fixed marketing budgets the only way to make the reach you can afford work harder, and the most durable thing to invest in, is trust.

Look at these figures – trust comes from “other people like us” – so getting them to recommend your brand can be the best thing you can do to lift the results (ROI) of your ATL

New Mums talk a lot ... recommend a lot & not just about baby stuff

When it comes to word-of-mouth (WOM) buzz about products--and specific brands--across a wide range of categories, expectant and new mothers are the champs, according to a new study from online resource BabyCenter and WOM-focused market research firm the Keller Fay Group.

Overall, pregnant women and new moms engage in one-third more WOM conversations per day than women in general or consumers as a whole, and almost two-thirds of their conversations include brand recommendations, the study found.

The studied group reported an average of 109 WOM conversations per week about products, services and brands, versus 83 among total women and 82 among the general public. These include about 70 brand-specific mentions per week, compared to 59 for women as a whole and 55 for the general public.

Furthermore, most of the conversations are positive, and considered highly credible by other moms ... and most of them are driven by information on the Internet, as opposed to other media.

In January, Keller Fay asked 1,721 pregnant women and new mothers (those with children five years old or younger) to fill out an online survey probing specifics about their conversations during the previous 24 hours about products and brands across 14 categories. Respondents were asked to report on any form of conversation, whether it occurred face-to-face, over the phone, or through the Internet.

The women were recruited through BabyCenter's "21st Century Mom Panel," its Web site (estimated to reach over 78% of online expectant/new mothers worldwide), and an external panel. Comparisons to the total public and total women were drawn from TalkTrack, Keller Fay's ongoing, nationwide WOM study.

What are new/soon-to-be mothers talking about, exactly?

As might be guessed, 64% have at least one conversation per day about children's products (versus 33% for total women and 25% for total public).

But discussions go far beyond kid-oriented products/brands. For example, the percentages of new/expectant moms who have at least one chat per day about key categories:

* Food and dining: 76% (versus 62% total women and 57% total public)

* Media and entertainment: 69% (versus 56% and 55%)

* Health/health care: 67% (versus 50% and 38%)

* Financial services: 60% (versus 38% and 32%)

* Beverages: 55% (versus 47% and 46%)

* Shopping, retail and apparel: 54% (versus 44% and 40%)

* The home: 52% (versus 34% and 28%)

* Technology: 48% (versus 36% and 40%)

* Telecommunications: 45% (versus 41% and 42%)

* Household products: 41% (versus 29% and 22%)

* Automotive: 39% (versus 35% and 36%)

* Personal care and beauty: 37% (versus 31% and 27%) and

* Travel services: 32% (versus 28% and 23%).

Perhaps the best news of all these and other marketers being discussed is that 60% of the WOM carries with it a recommendation to buy, try or consider the product/brand.

And since nearly 70% deem what they hear from their fellow moms to be very credible, 51% are likely to pass the information/recommendation along to others, and the same percentage indicate intent to purchase based on the information.

Not surprisingly, marketing/media advertising help drive much of the WOM: 38% of brand mentions also involve one or more references to some kind of marketing activity.

More notable is that 12% of brand mentions among this relatively young group of women result from information or mentions seen on the Internet, versus 11% for TV and just 2% to 5% for media such as magazines/newspapers, product packaging, in-store displays, and coupon circulars.

But as the researchers point out, given that broader studies show that 76% of all U.S. moms say that they use the Net for support and guidance and 70% participate in online communities, it's natural that the Web would tie in closely with their WOM, including offline conversations.

Recommendations from the study include encouraging WOM within a marketing objective; identifying ways to "create contagion" (make it easy for consumers to share with one another); using "artful storytelling" to create differentiation in the consumer's mind; and encouraging participation, collaboration and contribution.

Coming soon - Advertising damages your brand

Lets have some fun with a little logic bomb ... step through these steps with me and lets see where we end up...

Starting with the simplest definition I could come up with of the difference.

Traditional advertising is when the brand tells you how great they are, Word of Mouth is when a friend tells you.

Advertising is expensive, so if you accept the above definition then, the natural, logical conclusion will become

Brands that need to use traditional advertising are not getting (enough) personal recommendation to succeed.

From which there will be only one logical assumption for the market to learn (which will become more and more true with time)

Brands that have to rely on traditional advertising are not as good as ones that succeed through word of mouth.

When we get to this stage it people perceive advertised products as inferior ie ...

Advertising will actually damage a brand’s reputation

Now wont that be a weired?

By the way - I think we are already "in this place" for a number of categories. 

Films are one, the studios test the final product heavily before releasing it- if it gets poor recommendation (ie it stinks) they know that box office takings will fall off a cliff after the 4th day as enough people come out and recommend their freinds NOT to see it. So they pre-market the film through ATL to make sure that in the 4 days every seat is filled to maximise the returns.

Restaurants are another - when was the last time you saw an advert for a really really good restaurant?

I'm going to make a guess at another Divorce Lawyers - if you lived in the US where they can advertise, and it came to it, how would YOU find a good divorce lawyer - would you pick one that had to advertise or would you pick one that was getting enough work through being so good they got the recommendation

Shall we start a list - tell me what others should be in it

Films, restaurants, lawyers, doctors, dentists ....