Consumer-Generated Media

:
The Birth & Rise of the Word-of-Mouth Industry
Walter J. Carl, Ph.D. Department of Communication Studies This work is licensed under a Public Lecture Series Creative Commons Attribution-NonCommercialMarch 2006 NoDerivs 2.5 License.
All logos and images are copyright of the respective companies and individuals. Inclusion is not meant to imply any endorsement.

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October 2005

November 2003 Department Public Lectures Series This presentation is a follow-up to my 2003 public lecture, as well as the panel discussion on http://www.lib.neu.edu/newmedia/index.html New Media. It is meant to provide an overview for those who want an introduction to this exciting, growing industry.

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F2F v. Media: A Well-Known Distinction

2-Step Flow People tend to think of media as TV, radio, the internet, etc., while F2F is traditionally seen to be “unmediated.” Can F2F be considered a media channel? Should it be?

Media Richness
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Overview
Here’s what I’d like to cover…

• WOM & CGM defined
– Resurgence of WOM

• • • •

WOM & CGM examples WOM as “media channel”? Industry associations Key challenges facing industry
– Research interventions
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Word-of-Mouth, Defined
"Oral, person-to-person communication between a receiver and a communicator whom the receiver perceives as noncommercial, concerning a brand, product or a service." (Arndt, 1967)

http://www.fictionwise.com/knight/titian.adam&eve.jpg1

O.E.D. (1553) by word of mouth: by speaking, as distinguished from writing or other method of expression; orally. Also word of mouth n. phr., oral communication, oral publicity

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Why People Engage in WOM
Positive WOM • Altruism • Product Involvement • Self-Enhancement • Helping the Company • • • • Negative WOM Altruism Anxiety Reduction Advice-Seeking Vengeance

Just laying the ground work about why people engage in WOM. I’ll revisit this towards the end of my talk to help understand WOM as part of an organized marketing program.
Findings reported in Sundaram et al., Advances in Consumer Research, Volume 25, 1998.

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Resurgence of WOM
• • • Advertising clutter, seen as invasive Distrust of corporate messages Consumer desire for greater control and engagement • Emergence of communication technologies to amplify WOM
When people ask me “Why is word of mouth so hot now?” … this is what I tell them.

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Consumer-Generated Media
“But the internet changed and turbocharged word-ofmouth behavior in ways that marketers have not been able to capture, understand or learn from—until recently. The Internet has transformed the intimacy of word-of-mouth behavior into a broadcast-like ability to communicate with the masses, whether a group of friends or hundreds and thousands of online-butconnected strangers at computer keyboards... [a phenomenon we dub] ‘consumer-generated media.’”

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WOM & CGM Examples
Organic Amplified

Philosophy

Activity

Offline

Online
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Some distinctions we can use to organize the WOM & CGM space. Visit http://www.womma.org/wom101.htm to learn more.

To view this CGM video, visit http://www.bikeforums.net/video/1.mov
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Other market research and analyst firms:

These companies are tracking the online and offline conversations. For additional companies, visit http://www.womma.org/members.htm

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Chrysler’s 300C Influencer Program
• WOM & influencer product seeding program. • WOM influences 71% of auto buying decisions versus TV’s 17% • Influencer profile: Category expertise and light loyalty. • Private launch, 60-day trial with car. • Influencers invited to tell their stories about experience with the car to their social networks.
This is an example of an WOM influencer and product seeding program. For photos and additional information on this program, visit http://www.womma.org/wombat/presentations/w omma_wombat_thoburn.pdf
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I’ve got to say that it is one of the best vehicles I have ever driven.

Some other companies:
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This is a campaign trying to integrate “old” and “new” media. Some wonder whether or not this is “authentic” CGM…

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To view an example, visit http://notetaker.typepad.com/cgm/2006/03/icgm_incented_c.html 17

Contrast the Chevy Tahoe campaign with CGM on YouTube.

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Eat your heart out AdBusters... check out this clever “spoof ad”: http://customerevangelists.typepad.com/blog/2006/03/chevy_tahoe_cam.html

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Principles of WOM & “Evangelism”
1. Customer plus-delta 2. Build the buzz 3. Napsterize your knowledge 4. Create community 5. Make bite-size chunks 6. Create a cause
To see more authors, visit http://www.womma.org/womlibrary.htm 20

Other authors:

CGM and WOM as Media Channel?

CGM space

WOM space

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Some companies want to shift the discourse about WOM from “WOM as a discipline or tactic” to “WOM as a media channel.”
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Other companies with networks of program participants:

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Industry Associations & Conferences

Most of the companies on the prior slides represent WOM marketing research firms, agencies, consultants, authors, and brands that have organized themselves as an industry association (and of course a few academics too). This presentation has discussed more about the North American-based firms, but there are also plenty of international firms as well.

Learn more at http://www.womma.org and http://www.vbma.net

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Key Challenges
• Ethics & Societal Effects • Credible Metrics

Many consider these two issues to be the biggest challenges of this nascent industry. To learn how WOMMA is responding to these challenges, visit http://www.womma.org/programs.htm

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Most Common Critiques of Peer-to-Peer Influence Programs
• • • • Minors Undercover, stealth Commercialization of chit-chat Corporate colonization of the life world
Sony Ericsson’s “Fake Tourist” Campaign
To learn more, visit: http://wom-study.blogspot.com/2006/02/do-you-believe-social-critique-of.html
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The methods versus the message? Compare and contrast MoveOn’s use of a CGM ad contest to Chevy Tahoe’s.

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The methods versus the message? Reflect on similarities and differences between a peer-to-peer WOM campaign whose aim is to reduce teen smoking with a WOM campaign to sell more cleaning products. Is one more palatable to you than the other? If so, why? 28

To see additional screen shots, visit http://brainsonfire.com
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Measurement
• “You can’t manage what you can’t measure” • “You can’t manage what you can’t understand”

Reflect on the importance of insights offered by both quantitative and qualitative methods.

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Ethics is effectiveness. Not only is disclosure ethical, it’s also effective.

The Practical Effects of Disclosure
Without Disclosure
PP
CP CP CP CP CP CP CP CP CP CP CP CP CP CP CP CP CP CP CP CP CP CP CP CP

With Disclosure
PP
CP CP

Average Number of People Told = 1.18

Average Number of People Told = 2.02

70% increase in pass-along/relay rate
Differences are significant at p < .05 © Walter J. Carl, Ph.D. From “To Tell Or Not To Tell” Summary Report.

To learn more about this study visit 31 http://www.waltercarl.neu.edu/downloads and download the “To Tell Or Not To Tell?” report

Why Pass Along Might Be Higher With Disclosure…
Positive WOM • Altruism • Product Involvement • Self-Enhancement • Helping the Company • • • • Negative WOM Altruism Anxiety Reduction Advice-Seeking Vengeance

… because knowledge of program participation might activate two primary reasons why people engage in WOM: wanting to help a peer spread the word and feeling like you’re getting new information about a product that you can share with others yourself.
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Findings reported in Sundaram et al., Advances in Consumer Research, Volume 25, 1998.

Theory of Managed WOM:
A Contribution from Relational and Organizational Communication
Relational basis of WOM: - Trustworthiness - Caring/Goodwill - Experience-based knowledge -Relevancy

This is a theory I am developing that seeks to account for the relational and organizational dimensions of effectively and ethically managed WOM programs.

Organizational basis of WOM: - How does an organization build WOM principles into its business practices?
Listening Empowerment Engagement Community

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© http://www.kennys.ie/Exhibitions/2002/p-oconnell/In%20Deep%20Conversation.jpg

Word-of-Mouth Communication Study Research Blog
http://www.wom-study.blogspot.com

… where you can follow my research and musings on the WOM and CGM space.

Follow the development of a whole class devoted to WOM and CGM taught at Northeastern University… WOM, Buzz, and Viral Marketing Communication Teaching Blog
http://www.wom-teach.blogspot.com
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Presenter Information
Walter J. Carl, Ph.D. Department of Communication Studies 101 Lake Hall Northeastern University Boston, MA 02115 617-373-4075

I am also an Advisory Board member to WOMMA and a co-chair of their Research & Metrics Council.

w.carl@neu.edu http://www.waltercarl.neu.edu
Download my latest research at... http://www.waltercarl.neu.edu/downloads
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Disclaimer: Please note that there are many companies and individuals in the WOM and CGM space not included in this presentation. Inclusion/exclusion is not meant to be an endorsement (or lack thereof) for particular companies or individuals.

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