Online/Offline Word of Mouth Bibliography Ready for Review and Additions

More than a year ago, a group of WOMMA members got together, curious to answer the question, “What is the interaction between online and offline word of mouth?” We knew about the Keller Fay research pointing to the dominance of offline word of mouth and we were living through the social media revolution—personally and professionally. Our hypothesis was that offline word of mouth trickled online and social media found its way to face-to-face conversations.

Our search quickly revealed that few marketers had explored this question. We felt that we would do a great service to the larger WOMMA community by pulling together a bibliography of key studies and publications that explored this topic. In this document, you will find a broad range of studies, including:

· Comparison of online and offline word of mouth (BzzAgent, Brains on Fire, Keller Fay, Peres and Shacha, S. Radoff)

· Offline activities’ impact on social media and search behavior (Cheema, iProspect , Lauren F. Sessions)

· Social media’s impact on offline consumer decisions (Chintagunta et al., Godes and Mayzlin)

In addition, we conducted a survey* among our members to see how they approached the topic and measured online/offline word of mouth. We found out that while they measure both types of conversations separately, a sub-set looks at the impact of online buzz on offline initiatives and vice versa. Among WOMMA members:

45% measure online buzz to capture the impact of offline word of mouth campaigns
35% measure offline marketing communications’ impact on online word of mouth about brands

We hope that as the word of mouth marketing field matures, marketers find innovative ways to track results across online and offline platforms, and refer to the studies included in our bibliography as guideposts.

I would like to thank Dr. Walter Carl, Brad Fay, Bithika Mehta, Martin Oetting, Tarah Remington, Jasper Snyder, and Jeanie Son for all their contributions and their ongoing dedication to the project. As the online/offline word of mouth committee, we also appreciate WOMMA’s academic advisors’ input.

We present you with the online/offline word of mouth bibliography and invite you to join our conversation. We welcome your feedback and additions.

*Survey results are representative of WOMMA’s member base, and should be used directionally when talking about the broader marketer universe.

** This post has also been published on WOMMA’s All Things WOM blog.

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The Word on Banking

The latest report from the Large Purchase Study shows that offline WOM is significantly more likely to influence banking-related purchases than online WOM. Yet, there is a twist in this all too familiar plot line. The impact of online word of mouth on banking product and service purchases has been significantly increasing over the past couple of years.

Banks have a significant opportunity to grow their customer base and invest in long-term relations through online communications and marketing. The report shows that young adults and ethnic minorities, are more likely than their respective counterparts to listen to online buzz when choosing their banks.

As young customers get older and go through various life events and changes, they will need banks’ help with credit, mortgage and retirement products. They will continue to turn to their online sources. Banking brands that earn their trust today will have significant competitive advantages in the future to earn these customers’ business.

The latest census data pointed to significant growth in Hispanic population between 2000 and 2010. Considering the Hispanic population’s (especially the younger Hispanic segment’s) affinity for social media, banks that manage the word online and proactively communicate with Hispanic customers through social channels will stand a real chance with them.

To download the full report and read more about the influence of word of mouth on banking-related purchases, click here.

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Gap Between Online and Offline Word of Mouth Narrows For Car Purchases

A study on large purchases made in the past five years confirms the impact of customer satisfaction and word of mouth on car purchases and brand choices. According to the Large Purchase study by S. Radoff Associates, about one-third of car purchasers in the past year said they were influenced by their past experience (35 percent) and face-to-face or phone communications with friends and family (30 percent) when making their car choice.

In the hierarchy of information sources that influence car purchases, offline word of mouth has a bigger influence on consumers than online word of mouth. Yet, the rising role of online word of mouth in closing car deals is a noteworthy trend. Over the past five years, online word of mouth sources (e.g., online reviews, blogs, social networks, forums, friend emails) have been increasingly influential in driving consumers’ car purchasing decisions and brand choices. Five years ago, one-fifth (20 percent) of consumers pointed to online word of mouth among the sources that shaped their decision. A year ago, more than one-quarter (26 percent) indicated that online word of mouth helped them choose and buy their car.

As car purchasers increasingly rely on online word of mouth sources, automotive brands need to be prepared to monitor and join online conversations. For car buyers experience is a fundamental decision factor. They assess their hands-on experience along with others’ experience in driving vehicles. Online marketing and communication initiatives that highlight positive consumer experiences and provide extended service to potential customers are bound to drive sales.

To read more about how various car purchaser segments (e.g., women, parents, young adults) make their buying decisions and brand choices, download the ebook What Drives Cars here.

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Socialgraph Helps Search Engine Listings

When showing the value of an online community you are building, do not forget about checking the search box. Typical questions about expected outcomes from a community may still center around reach metrics. How many people am I reaching? How many eyeballs am I catching with my messages? The comprehensive answer includes reach (unique visitors, community members, etc.), engagement (i.e., conversations among fans and your brand) and search rankings. And your search listings are related to reach and engagement.

The basic principle of affecting organic search results is strong and relevant content that gets repeated, cited and linked in online conversations. When you build a community page or a fan page, steer your editorial calendar to include bits of newsworthy information that can easily grab and pass along to their networks. When sharing news about a discount, expert tips or a new product launch, your audience expands your digital footprint, brings you more visitors/fans and generate links. The sum of these activities have a positive impact on Google search rankings and your content rises higher and higher as your community expands and chatter grows through tweets, discussions and blog posts.

In fact, Web analyst Brandt Dainow’s list of rules for beating Google at SEO includes the following audience behaviors, which help search rankings:

Fans who like/follow you
Impressions from social graph fans (i.e., they talk about your brand in social media, including your message points, brand name)
Impressions from social graph fans with links (i.e., fans are citing your community page and referring traffic)
Secondary fan connections (i.e., friends who tell friends who then become your fans and/or referrers)
Other citations (i.e., links, references from people who are not your fans/followers)
Number of visits, click-throughs

Online conversations increase the value of your community. A bustling online hub means higher visibility and accessibility.

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Online News and Buzz Predict Stock Value

SENSEnews, a service brought to you by the people behind the semantic search engine hakia, is able to make sense of it all for investors. The system aggregates vast amounts of information such as facts, news events, financial interpretations, speculations, market factors, sentiments and reviews. Then, it plugs this knowledge into an intricate algorithm. The result is a computation of unrealized stock value. You know when your investments are overpriced or undervalued. You decide to sell, hold or buy more.

As the co-inventor of SENSEnews Dr. Riza Berkan, indicates, the average person cannot track and analyze such vast amounts of data. Whether we get our news from the media or through word of mouth, we are always a few steps behind in the information game. Therefore, SENSEnews offers an incredible advantage to traders and those who manage their own portfolio.

While the relationship between news and stock value have been studied in depth, the addition of social media to the mix elevates the conversation about the value of online word of mouth to a new level. Services like SENSEnews also underscore the importance of financial information companies release online. Through the funnel of SENSEnews, what companies publish about themselves, what the media say about companies and what citizens publish online can affect perceived stock value (and performance.)

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Study Shows Social Media Has More Impact Than Paid Media on Car and Technology Sales

S. Radoff Associates, a NY-based research company, just released a report about the impact of word of mouth on large-ticket item purchases. The results remove any shadow of doubt on word of mouth’s impact on tangible business results. And we understand that social media drives sales for considerable investments in cars and technology, not just CPG products.

The study delves into large purchases made in the past year and the information sources that shaped brand choices. The results show that one-half of consumers say word of mouth was a key influencer for car (50 percent), technology and electronics (49 percent) product choices they made in the past year.

We know from Keller Fay Group that much of word of mouth actually takes place offline. Interestingly, these two categories are pretty balanced in terms of their source of buzz. In fact, online and offline word of mouth were just as likely (29 percent, respectively) to influence technology and consumer electronics purchases.

Online reviews are at the source of online buzz. Consumers say online reviews influenced nearly one-quarter of technology and electronics purchases (24 percent) and 17 percent of car purchases made last year.

The most counterintuitive factoid from the study is that consumers are four times more likely to be influenced by social media than paid media for their car purchases made in the past year (21 percent vs. 5 percent). Social media has been more influential than paid media for technology purchases as well (26 percent vs. 7 percent).

Considering the typical budget spending on advertising vs. social media, these numbers signal the need to seek efficiencies in our integrated marketing plans for 2011 and beyond. Marketers planning for automotive and consumer electronics/ technology brands can shift dollars from traditional advertising budgets to social media and focus on elevating consumer opinions and customer experience.

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Key Performance Indicators in Social Media

Today’s social media landscape is significantly more cluttered and complex than its early days. The abundance of content that is easy to access and consume makes launching and sustaining noteworthy online projects challenging. As social media matures, the need to measure online word of mouth and demonstrate success becomes indisputable.

A comprehensive measurement plan should consist of three parts—gauging the audiences’ reactions to the brand before, during, and after the campaign. The first step in measuring online word of mouth is to listen and monitor audience chatter across blogs, forums, and social networks. This effort helps uncover existing issues, attitudes, and behaviors. It marks the starting point for a campaign. The second step requires tracking the campaign’s progress and studying the interaction between message senders and receivers. During this phase, marketers can take note of attitudinal and behavioral changes among their target audience. The third step involves comparing final campaign results with benchmark scores to demonstrate the momentum and change the campaign generated.

When setting benchmarks and tracking online word of mouth throughout the course of a program, marketers can use the following measures to show how their initiatives generated buzz, changed brand perceptions, and lead consumers to take action.

Volume of discussion: Using blog search engines such as Technorati, Google Blog or research firms’ proprietary software tools, count the number of posts that mention key words or messages related to your program. The numbers of unique mentions indicate online word of mouth reach.

Influencer mentions: When writers quote and reference a source, they deem that information outlet reliable and useful. Similarly, every link that points to a social media address boosts that source’s authority. Desktop monitoring tools such as Radian6 and BuzzLogicÔ measure the number of in-bound links to blogs from brand sites, news sites, forums, and other blogs. The higher the score, the more influential and authoritative the source will be.

Stickiness: To show the full impact of word of mouth programs, we must account for those who received and shared a message. Impressions and unique visitors are metrics that speak to the broad universe of people who may have been exposed to a message. However, not everyone passes along every bit of information they receive. A survey measure developed by research firm S. Radoff Associates called Stickiness addresses this issue. Stickiness is based on the percentage of people who pass along a message among those who are exposed to the message.

The Echo Factor and Tone: When reviewing the overall volume of mentions, analysts often distinguish between positive and negative tone. Marketers can take this assessment a step further and measure how their messages echo through consumer conversations. Through surveys targeting representative samples of their audience, they can probe how many people received and passed along a positive or negative message. Next, they can look at the ratio of positive to negative mentions. S. Radoff Associates’ Tonality Index, which is based on this ratio, indicates the dominant tone of word of mouth and gives brands a pulse check.

Engagement: Online media engagement can be a qualitative measure that gives directional information about consumers’ online experience. To understand the nature of users’ interaction with the blog content, marketers can study comments’ tone and length. They may find a detailed, positive review more meaningful than a neutral or negative monosyllabic comment. Furthermore, they can classify the topics commentators discuss and analyze the quality of information these social media agents share.

Advocacy: Differentiate between those conversations that are descriptive and those that contain recommendations or warnings. To identify those networking agents who are advocating for a brand, product, or a company, look for those who are making solid recommendations, telling others what to do, and potentially influencing others’ opinions and decisions. For instance, MotiveQuest, a strategic consultancy that analyzes online consumer buzz, has coined the term online promoter score™, distinguishing between those mavens who are generating much of the volume on an issue and those advocates who make recommendations

Action: Online word of mouth campaigns yield recommendations, votes, and purchases. When organizations engage word of mouth agents and infuse networks with their messages, they hope to see an increase in sales and public support. To connect such outcomes with their marketing initiatives, communication professionals need to document their audiences’ online behaviors and show online buzz can lead to posts, clicks, downloads, or offline actions such as votes, coupon redemptions, and in-store purchases. Marketers can review sales trends during and after the campaign and note any increases that correspond with online buzz volume. Political strategists can explore how visits to online information hubs affect votes, signatures, and donations.

To read the complete version of this article, please visit PRNews Online.

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Opportunity is in Asia-Pacific

Trendstream, a research firm based in the UK, has published global trends on social media usage. The firm’s Global Web Index, based on 32,000 online interviews across 16 countries, shows that online marketers in the Asia Pacific region have tremendous opportunities as their audiences trust and engage with brands that communicate with them through social media.

As compared with the global average, consumers in the Asia Pacific region indicate that brand-driven communities, fan pages and blogs improve their opinions of that brand. They feel similarly if a brand takes note of their mentions and starts following them on a microblog (e.g., Twitter).

This trend may well be based in certain Asian populations’ positive attitudes towards technology and the Web, coupled with their preference for privacy. For instance, when asked about brand communication methods that improve their opinion of brands, Chinese and South Korean respondents are unlike anyone else. While in the US, Latin America, and in Europe, consumers are more likely to be impressed with face-to-face communications, Chinese and South Korean consumers prefer online recommendations from a contact or a friend.

The Global Web Index data have strong implications for programs that need to work across multiple countries. Marketers need to be attuned to the ways in which their audiences prefer to receive communications and make necessary adjustments in each local market. Brands that can decipher cultural attitudes towards information sources, knowledge and experience are bound to communicate more effectively and build global equity.

Online Hispanic Population: Young, Tech-Savvy and Ready to Spread The Word

The Hispanic Cyberstudy, conducted for AOL by Cheskin Research, has eye-opening findings on how to best communicate with the Web’s most rapidly growing population segment. As demography experts point to the rise of an increasingly diverse US household population, it behooves marketers to understand the nuances in Hispanics’ online behaviors and attitudes towards new technologies.

The online Hispanic population is mostly US-born and English speaking (41 percent). An additional one third (31 percent) are bicultural, speaking both English and Spanish at home. The study indicates that the online Hispanic is much younger than the typical Internet user (37 vs. 46 years old) and they are more enthusiastic about the benefits of the Internet:

o 72 percent of online Hispanics visit product rating sites
o 64 percent consider the Web the best place to keep up with current events
o 57 percent always go to the Web to find deals
o 28 percent turn to the Web for friends’ opinions

As these numbers suggest, the Internet influences Hispanic consumers’ purchasing habits a great deal. While many consumers shop for information online, Hispanic consumers are more likely than the general Internet population to learn about where to buy a product, compare prices and make a final purchasing decision.

How to best approach Hispanic consumers online? Word of mouth marketing tactics that let users read reviews and converse about experiences would be the first step. But here’s the twist: When it comes to tech-based communications, acculturation levels may not matter in the way traditional marketers may think. In fact, Hispanic customers are universally open to new technologies regardless of their acculturation level. In fact, those who are Spanish-speaking (41 percent) or bi-cultural (40 percent) are more likely than US-born, English speaking Hispanics (31 percent) to indicate that they are considered tech experts in their social circles. All the more reason to make sure Spanish versions of Web sites are culturally relevant and are en par with their English counterparts and are not mere translations.

Who is most likely to spread your news among the Hispanic online audience? The power user is male in his mid-thirties who’s married with young children. He often goes online through his phone and other devices. He e-mails (79 percent), remains active on social networks (68 percent), pings friends and family on IM (64 percent) and keeps a blog (59 percent). Sounds like a no brainer for the likes of Best Buy, RIM, iPhone and automotive companies.

Enough Talk: Let’s Talk About Implementing Word of Mouth

Five years ago, I attended the first word of mouth marketing conference organized by WOMMA. I still remember the energy that gathering had – people from a variety of professional backgrounds were presenting how they were tapping into the power of peer-to-peer conversations. There were advertisers, political consultants, brand consultants, widget makers, professors, researchers… Each presentation was more interesting than the other.

I was really disappointed by one speaker though. He got up on stage and said that we had all been doing word of mouth for a long time and that all things lead to word of mouth. All communications generated conversations. At the time, I didn’t find this so novel. I really wanted to see a case study and hear about counter-intuitive facts. Today, I cannot agree more. If we’re in the business of communication, marketing, planning, storytelling, advocacy–simply put, selling–then we’re in the business of word of mouth marketing.

I’ve been working in the Internet sector for over a decade. I have always been interested in the way ideas spread online and trickle offline. Today, we’re no longer debating the importance of emerging platforms such as blogs and social networks. While we continue to debate their impact on business and our daily lives, we sense that these tools are the first versions of communication platforms that will make news spread even faster and further.

That’s why I wrote Implementing Word of Mouth Marketing: Online Strategies to Identify Influencers, Craft Stories and Draw Customers. It just hit the shelves. The book is a comprehensive guide to understand, engage and sustain relationships with online audiences. My goal was to go beyond explaining the importance of word of mouth marketing in the Internet space. I wanted to give my readers a step-by-step plan they could customize to fire off their business, using Web-based tools.

I use several images across the book:

I start with a computer to explain how the Web fits into the overall mix of communication channels.

I continue with the eye and the ear to indicate that we first need to watch and listen to identify and better understand networking agents–those cybercitizens who create content, speak up and drive buzz.

Then I open my mouth, to show best practices in communicating with networking agents.

I pick up the megaphone as I offer campaign design ideas and measurement plans to launch online word of mouth marketing programs.

As the global Internet population approaches the 2 billion people mark over the course of the next few years, I believe we should pay closer attention to conversations that percolate online.

(images created by Greg Kessler)