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Marketing in a Social World

The business equivalent of making sausage is the marketing of marketing.

In an op-ed in the Wall Street Journal (November 29-30, 2008), Tom Hayes and Michael Malone explain the new world of marketing in a Web-based world. They have a provocative name (“Marketing 3.0″) and a new concept (the business meme or “beme”). In the end, they sound like apologists trying to make a pitch for why advertising agencies are still relevant and reminds me of this humorous video imaging what would happen if a modern advertising agency designed the stop sign. In short, they are marketing marketing.

Hayes and Malone’s prescription to pay people to forward “viral” marketing messages to their friends misses the fundamental dynamic of why these heavy contributors post so often. Researchers at Hewlett-Packard found that contributors are in it for personal glory, not public service or profit. Knowing the person sending you comments—or worse yet an actual advertisement—is paid removes the credibility and community acknowledgement that drives heavy contributor behavior. Even simply paying them to do what they already do runs counter to heavy contributor psychology and is almost certain to dramatically decrease their volume. Amazon’s unpaid reviewers are not unique in this regard; McAfee has a user support forum where some unpaid contributors post hundreds of messages, and there are lots of similar examples.

While it all sounds good, several of Hayes and Malone’s prescriptions go against what I’ve  learned working with forward-thinking companies and studying the role of Web communities. Hayes and Malone’s ideas call for a shift in focus from customer loyalty to customer attention. That is, getting your message in front of as many people as possible.

Now, there’s some new thinking.

Since agencies don’t actually sell products, they promote aggregate measures like loyalty, impressions, or now attention. These metrics tend to discount things like Web communities that they cannot control. Web communities, however, increasingly allow customers to bypass managed media entirely. Customer reviews that are a fixture of so many communities are now second only to word of mouth as a purchasing influencer. So it is not eyeballs that are critical for influencing customers, but rather trusted voices. Thus, any marketing strategy that does not understand and directly leverage these Web communities such as Amazon’s customer reviews, Digital Photography Review (dpreview.com), and other well-established alternatives outside the reach of agencies is missing the boat.

The truth about Web communities is that they represent a huge shift in the way that consumers and companies interact.

Furthermore, we’ve identified at least five different types of Web communities, each developing in response to different types of motivations or user needs. Just as important, according to research first published by Will Hill at Bell Labs (and re-confirmed numerous times over the last 15 years) 10 percent of users generate 90 percent or more of the user comments. We call these heavy-contributors, most frequent contributors (MFCs). While the MFCs are posting comments, most customers are silent “voyeurs” or “lurkers” who watch and absorb, but don’t actively contribute to the discussions. Thus, when you interact with the 10 percent of MFCs, you need to play to the other 90 percent, and if you do you get huge leverage. When you interact with the silent majority of lurkers there is no leverage. This is why we liken Web communities to a theater.

Hayes and Malone are right in recognizing the importance of getting users to spread the good word about your product is the way of the future. What they don’t get is that the key is not paying incentives to get people to fill in for the old broadcast networks. Advertising is losing effectiveness not just because the broadcast networks are losing audience. Advertising is losing effectiveness because it is losing credibility in the face of customer reviews and other non-company directed information sources.

The real key to marketing in a Web-centric world is finding and nurturing the right people so that you generate strong customer reviews. The critical fact here is understanding that a small number of MFCs generate nearly all the user reviews, so Web communities are more theater than egalitarian conclave. Further, there are five different types of Web communities, so interacting with and encouraging MFCs at LinkedIn is different than at Amazon. By understanding the goals of the specific communities and the MFCs, you’ll be able to leverage unpaid users into a powerful marketing tool.

(Note: This post was co-authored with my team at Rubicon.)

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