© 2011 Keller Fay Group LLC@kellerfay

Not to be quoted or distributed without written permission

All Media Are SocialPresentation to WOMMA UK & IPA

By Brad Fay

London

March 4, 2011

www.kellerfay.com

Who We Are

• Research-based marketing consultancy

• Exclusive focus on word of mouth

– Who, what, how and why of WOM

– Only firm to measure all WOM

• Independent advice on how marketers & agencies can capitalize

ARF INNOVATION GRAND AWARD WINNER

RESEARCH EXCELLENCE AWARD WINNER

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The Power of Word of Mouth

“The rewards of pursuing excellence in word-of-mouth are huge, and it can deliver a significant competitive edge few other

marketing approaches can match”

“It’s the most disruptive factor in marketing”

“Marketing-induced consumer-to-consumer word of mouth generates more than twice the sales of paid advertising”

McKinsey Quarterly, April, 2010

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Social Media Are Exploding

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Word of Mouth Is More than Social Media

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Word of Mouth:

The act of consumers providing information to other

consumers.

Word of Mouth Marketing:

Giving people a reason to talk about your products and

services, and making it easier for that conversation to take

place. It is the art and science of building active, mutually

beneficial consumer-to-consumer and consumer-to-marketer communications.

For examples of award winning WOM campaigns, go to

http://www.womma.org/WOMMY/

www.kellerfay.com

• What percent of WOM happens on social media, blogs, chat rooms?

But is All the Action Really in Social Media?

Offline, 91%

Online, 7%

US = 7%

Britain = 7%

Australia = 7%

US = 91%

Britain = 92%

Australia = 91%Source: TalkTrack®: US, July 2009 – June 2010; Australia, April 2010, Britain, May 2010

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Regardless of Category or Market, Face-to-Face Conversations Dominate

76% 81% 82%75% 79% 82% 83% 88% 90%

74% 76% 78%72% 74% 74%

15%11% 10%

14% 11% 9% 9%6% 5%

14% 11% 10% 20% 18% 16%

8% 7% 7% 9% 9% 7% 6% 5% 5%10% 11% 10% 6% 6% 7%

Face-to-Face Phone Online

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US

Brit

ain

Aus

tral

ia

Mode of Conversation

US

Brit

ain

Aus

tral

ia

US

Brit

ain

Aus

tral

ia

US

Brit

ain

Aus

tral

ia

US

Brit

ain

Aus

tral

ia

Technology Financial Services

BeveragesBeauty & Personal Care

All WOM

Base: Conversations (US/Britain/Australia Shown: All WOM, n=196,216/16,682/17,653; Beauty, n=9,113/649/634; Beverages, n=16,872/1,630/1,390; Tech, n=15,017/1,203/1,368; Finance, n=10,626/1,063/1,003)Note: Percentages will not add to 100 because “other” not shown.Source: Keller Fay Group’s TalkTrack® US, Britain, and Australia

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Keller Fay’s TalkTrack® Methodology

• Online survey among consumers 13 to 69– Participants re-contacted a day later to answer questions about brands

talked about during past 24 hours– Covers all forms of WOM: Offline + online– 700 surveys weekly

• Diary-assisted reporting of a day’s conversations– Respondents asked to take notes on conversations in 15 categories

over 24 hours– Brand/company names collected on open-ended basis

• Size of database– 36,000 interviews annually– About 350,000 brand mentions per year

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TalkTrack®: A Unique Approach to Measuring WOM

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U.S. since 2006• 36,000

Interviews per year

• 350,000+

Brand conversations

International

• UK - 2010

• Australia - 2010

All People

All Dimensions

Media AudiencesAll Brands

All Categories

All Points of View

All Forms of WOM

© 2011 Keller Fay Group LLC@kellerfay

Not to be quoted or distributed without written permission

Britain’s WOM Conversation:

5 Key Insights Into Word of Mouth Behaviour

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• Average Number of Weekly Branded Conversations Per Person

Britons Like to Talk

Base: Respondents (Total Public, n=2,578; Men, n=1,284; Women, n=1,294)Source: TalkTrack® Britain (May 14th – 31st 2010)

70 6674

Total Public Men Women

In the U.S., the total public engages in 65

weekly branded conversations, on

average.

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% of people having conversations by category in past day

They Talk About Many Categories

Children's Products

Personal Care & Beauty

Household Products

The Home

Automotive

Health & Healthcare

Financial Services

Travel Services

Telecommunications

Shopping, Retail, & Apparel

Technology

Sports, Recreation, & Hobbies

Beverages

Media & Entertainment

Food & Dining

18%

29%

30%

33%

36%41%

43%

45%

47%

48%

48%

50%

57%

63%

64%

Compared to U.S. consumers, British consumers more

conversations in most categories, especially Travel (+24 points),

Shopping/Retail (+12), Financial Services

(+10), & Technology (+10).

Base: Respondents (Total Public, n=2,578)Source: TalkTrack® Britain (May 14th – 31st 2010)

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Which Brands Get the Most WOM?

Base: Brand Mentions (n=26,499) Source: TalkTrack® Great Britain (May 14th – 31st, 2010)

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2.

8.

Two of the top 10 brands in Great Britain are also

top 10 U.S. brands: Coca-Cola, #1 and

Apple, #7.

1.

3.

4.

5.

6.

7.

9.

10.

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•62% of brand references in word of

mouth conversations are “mostly positive”

… Seven times the rate of “mostly negative” references (9%)

Implication: Don’t be afraid to engage in the conversation!

Word of Mouth Is Mostly Positive

Source: TalkTrack®, Britain (May 14th – 31st, 2010)14

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More Consistency in Quality of WOM Across Country than Across Category

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-21%

-16%

-17%

-20%

-17%

-18%

-11%

-11%

-12%

-14%

-12%

-12%

-16%

-15%

-15%

-13%

-18%

-15%

-9%

-9%

-9%

-6%

-7%

-5%

-3%

-4%

-5%

-9%

-9%

-8%

48%

48%

51%

59%

62%

63%

69%

66%

72%

73%

72%

73%

62%

62%

66%

MixedMostly Negative Mostly Positive

US

Britain

Australia

US

Britain

Australia

US

Britain

Australia

US

Britain

Australia

US

Britain

Australia

Technology

Financial Services

Beverages

Beauty & Personal Care

All WOM

Base: Brand Mentions (US/Britain/Australia Shown: All WOM, n=171,152/13,414/14,939; Beauty, n=7,401/574/441; Beverages, n=17,967/1,439/1,247; Tech, n=13,624/1,077/1,125; Finance, n=8,359/917/904)Source: Keller Fay Group’s TalkTrack® US, Britain, and Australia

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Media Play a Big Role in Driving WOM

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• Half of consumer brand conversations

refer to marketing or media

…led by: Internet (15%)

television (13%)

newspapers (5%)

magazines (4%)

direct mail/email (4%)

Marketing and media are tools for encouraging WOM!

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In All Countries, WOM Tends to be Driven by TV, Point of Sale (POS), & Internet Touch Points

Base: Brand Mentions (US/Britain/Australia Shown: All WOM, n=170,380/13,414/14,939; Beauty, n=7,361/574/441; Beverages, n=17,822/1,439/1,247)*Up to two media/marketing references can be selected so figures will not add to this total row. Source: Keller Fay Group’s TalkTrack®, November 2009 – October 2010

All WOM

US Britain Aust.

Brand Mentions Involving One or More References*

52% 46% 49%

   Television 17% 13% 14%

   Internet 15% 15% 16%

   Point Of Sale 9% 8% 8%

   Promotion 8% 5% 4%

   Newspaper 6% 5% 5%

Direct Mail/E-Marketing 5% 4% 5%

   Magazine 5% 4% 3%

   Radio 3% 2% 2%

   Billboard 2% 1% 1%

Media and Marketing References Cited in WOM

(% of WOM conversations citing media or marketing; top 3 references highlighted)

(Comparing Countries)

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• % of WOM With or Without a Media/Marketing Reference Containing a Recommendation to “Buy/Try” a Brand or Product

Active Advocacy More Likely in Conversations That Reference a Brand’s Media/Marketing

No Media/Marketing Cited in WOM

Media/Marketing Cited in WOM

31%

39%This is similar to what is

seen among U.S. consumers, with brand

conversations that reference some form of

media or marketing being more likely to contain a

positive recommendation (44%) compared to those

that do not contain a reference (39%).

Base: Brand mentions where someone else provided advice (Media/Marketing Cited in WOM, n=4,008; No Media/Marketing Cited in WOM, n=4,638) Source: TalkTrack® Great Britain (May 14th – 31st 2010) 18

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How Impactful Is WOM?(% rating WOM highly credible/highly likely to inspire action, “9” or “10” on 0-10 scale)

Base: Brand mentions where someone else provided advice (n=8,646)

Source: TalkTrack® Great Britain (May 14th – 31st 2010)

Credibility/Believability of What Was Heard

Likely to Pass Along to Others

Likely to Seek Informa-tion

Likely to Purchase

48%

29%

21%

36%

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While WOM credibility is similar to what is seen in the U.S., behaviors based on

WOM are considerably lower.

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• 8% of population, influencers engage in 2x as much

WOM as others– Influencer WOM is 3.8x as valuable

• Influencers are “everyday people”

but are distinguished by:– Larger than average social networks

– Keep with what’s new

– Are sought out for their advice

When it Comes to Conversation, Not All Consumers are Created Equal

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Influencers Talk About Twice as Many Brands Per Week

• Number of weekly brand mentions per person

Base: Respondents (Total Public, n=2,578; Conversation Catalysts™, n=213)Source: TalkTrack® Britain (May 14th – 31st 2010)

70

143

Total Public Conversation Catalysts™

Total Public Conversation Catalysts

+104%

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• % of Category Conversation Catalysts™ among the total public

British Consumers are Catalysts in a Number of Product Categories

Category Conversation Catalysts™Total Public

Technology Catalyst™ 9%

Media & Entertainment Catalyst™ 8

Food & Dining Catalyst™ 8

Retail Catalyst™ 7

Sports, Recreation & Hobbies Catalyst™ 7

Financial Catalyst™ 6

Personal Care & Beauty Catalyst™ 5

Beverages Catalyst™ 5

Health Catalyst™ 5

Travel Catalyst™ 5

The Home Catalyst™ 4

Telecom Catalyst™ 4

Household Products Catalyst ™ 4

Automotive Catalyst™ 3

Children’s Products Catalyst™ 3Base: Respondents (Total Public, n=2,578)Source: TalkTrack® Britain (May 14th – 31st 2010) 22

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All Adults (Hrs)All Conversation

Catalysts (Index)

All Category Catalysts (Index)

Television 3.74 96 96

Radio 2.11 98 102

Internet 1.83 110 105

Newspapers 0.55 93 98

Magazines 0.25 92 100

Out-of-Home 2.29 107 103

Source: IPA TouchPoints3

Time Spent Consuming Media in an Average Day

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Advertising leads me to search for product/service online:

ConversationCatalysts

(Index)

Category Catalysts

(Index)

Television Ads 109 106

National Newspapers Ads 159 131

Regional Newspapers Ads 135 131

Magazines Ads 141 129

Radio Ads 162 123

Cinema Ads 161 129

Source: IPA TouchPoints3

Receptiveness to Advertising Compared to All Adults

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Correspondence Map of Category Catalysts (Red) v. Media Usage/General Activities (Green)

Source: IPA TouchPoints3

Active Columns Active Row s

Any Category Conversation CatalystFood and DiningSport and Hobbies

Entertainment and Media

Holidays and Travel

Mobile Phones

Computers/Computer Softw are

TV, DVD and Audio Equipment

Clothes and Accessories

Beauty/Grooming Products

Health Products

Home Appliances

Home Decoration/DIY

Cars

Financial Services

Shops and Shopping Centres

Children's Products

Everyday Household Products

Gardening

Jobs and Careers

The EnvironmentPublic Affairs/Politics

High Broadcast TV

High Commercial TV

High Radio

High Commercial RadioHigh TV/Radio

High Commercial TV/Radio

High Internet

High New spapers/Magazines Reading

High Mobile Phone

High Media OOH Out Of Home

High Work/Study Working/Studying

High Housew ork

High HH Admin Household

High Washing/Dressing

High Cooking Preparing Food/Cooking High Eating/Drinking

High Sport/Exercise Sports/Exercise

High Hobbies Hobbies/Pastimes

High Shopping

High Socialising

High Childcare

High Relaxation RelaxingHigh Doing Nothing In Particular

High At Home

High At Work

High At School School/College

High Travel Travelling

High Out Of Home

High Outdoor

High Alone On My Ow n

High Mood Score

High Mind State

Telmar Correspondence

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Targeting Media to Deliver Category Catalysts

Type of category catalyst Most efficient national newspaper

TV, DVD, & Audio Equipment

Clothes & Accessories

Health Products

Gardening

…

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Does WOM Displace Advertising?• This is the 2005 perspective.

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The End of Advertising?

• “As 30-Second Spot Fades, What Advertisers Will Do Next”

– WSJ, 2006

• “In Memorium: The 30 Second TV Spot?”

– Blog post, 2007

• “The death of the 30-second TV commercial: Devices like the new Apple TV box and digital video recorders from TiVo, Motorola and Cisco could help bring an end to the traditional TV ad.”

- CNN/Money, 200728

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Word Of

MouthAdvertising

What We Know Now

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Keller Fay Finds About One-Fifth of WOM Directly Stimulated by Ads

• Chart reflects percentage of conversations about brands where participants say somebody directly referred to advertising as a source of brand information in the conversations

• Not included are conversations influenced by advertising that was unmentioned by any conversation participant

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Industry % of WOM Influenced by Advertising

Entertainment/Movies 30.3%

Telecommunications 29.3%

Personal Care/Beauty 28.5%

Technology 28.1%

Automotive 27.3%

Household Products 26.0%

The Home 25.9%

Shopping/Retail 25.6%

All Category Average 25.1%

Travel Services 24.6%

Food/Dining 23.9%

Children 22.5%

Beverages 21.5%

Sports/Recreation 21.1%

Financial 19.0%

Health/Healthcare 17.5%

Base: Brand Conversations Influenced by Advertising, n=32,496 Source: TalkTrack®, October 2007 through September 2008

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Base: Brand conversations across all categories (n=165,352) Source: TalkTrack®, January – December 2010

(Top 10 touch-points shown; % of word-of-mouth driven by media/marketing)

Sports/Concert/Theater Event

Product Sample

Newspaper Advertisement

Product Package

Internet Advertisement

Company Website

Coupon/Circular

In Store Display/Video

Television Program

Television Advertisement

1.7%

2.1%

2.4%

2.6%

2.6%

3.4%

3.8%

4.2%

5.6%

8.5%

Multiple Touchpoints Contribute to WOM

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The “two-step flow” (1955)• “Media have only ‘limited effects’

in the process of mass persuasion”– “ ‘Selectivity’ in exposure and perception

used by individuals to ‘protect’ pre-existing cognitive structures”

– “A campaign of persuasion is more likely to reinforce than convert”

• “Messages are filtered through social networks and vetted in the light of group norms”– “Where you find an opinion leader,

you are bound to find a conversation”– “Try to identify the points at which media

enter the conversation”

Re-thinking How Mass Communication Works

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All media are “social”

Implication

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And so are we….

www.kellerfay.com 34

The Power of People

Enabled by Technology

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Keller Fay Group

Keller Fay Group

65 Church Street, 3rd Floor

New Brunswick, NJ 08901

+1-732.846.6800 (Tel)

+1-732.846.6900 (Fax)

www.facebook.com/Kellerfay

Twitter: @kellerfay

Brad Fay bfay@kellerfay.com

Andrew Smith asmith@kellerfay.com

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Bringing best-in-class tools to word of mouth strategy and measurement

The Keller Fay Group

© 2011 Keller Fay Group LLCNot to be quoted or distributed without written permission