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Transcript of Unleashing the Power of Word of Mouth to Understand Markets 40 th CMAG Meeting March 14, 2008 ©...
Unleashing the Power of Word of Mouth to Understand Markets
40th CMAG MeetingMarch 14, 2008
© 2008 Keller Fay Group LLCNot to be quoted or distributed without written permission
2www.kellerfay.com
Who We Are
• The first research-based marketing consultancy focused on word of mouth– Metrics: measuring brands’ word of
mouth and competitive context– Best practices: understanding the
dynamics of word of mouth– Implications: analyzing strategic
impact
• TalkTrack®: award winning study of word of mouth and its impact
The Keller Fay Group
2007 ARF INNOVATION GRAND AWARD WINNER
3www.kellerfay.com
3.5 billion word of mouth conversations each day in
America
Source: Keller Fay Group’s TalkTrack®
There’s a Lot of WOM Today
4www.kellerfay.com
Leading Marketers Are Getting on Board
“Marketing is becoming less about sending a message to consumers and more about conversing and co-creating experiences with consumers.”
“Make your consumer an advocate: Shift marketing objectives from sending a message to facilitating conversations with and between consumers.”
-- HD Marketing 2010, a study presented by the ANA and Booz Allen Hamilton in October 2007
5www.kellerfay.com
Word of Mouth Is Often Organic
“I make a lot of recommendations.”
“It’s a natural, serendipitous process.”
“Most ideas come out of conversations, with someone building on what’s just been said.”
“Someone will say they need a [window washer]. I say I’ve got a great [window washer].”
“Someone will overhear the conversation, then I’m giving three people the [window washer’s] name.”
-Sophie Glovier, Princeton, NJ From The Influentials (Free Press, 2003)
6www.kellerfay.com
Marketing Can Amplify Word of Mouth
1. Encouraging word of mouth within a marketing objective
2. Making it easy for consumers to spread the word about your brand
Word of mouth marketing:
Seeded on Wall Street
Users helping users
3. Making sure everything you do that touches the consumer is “TalkWorthy™”
7www.kellerfay.com
WOMM: Becoming Big Business
• Topped $1.0 B in 2007• Increasing at 30%+ per year• Forecast to hit $3.7 B in 2011• Fastest growing alternative media segment• One of the most influential ways to connect
with consumers
Source: PQ Media 2007-2011 WOM Marketing Forecast
8www.kellerfay.com
100
110
120
130
140
150
2003 2004 2005 2006
WOMWOM
TV AdvertisingTV Advertising
Index to All Communications Index to All Communications ContactsContacts
Source: SMG/100+ MCA Studies
Word of Mouth Is Gaining over Advertising(Effectiveness Through Time)
WOM Is Gaining Over Advertising(Effectiveness over Time)
9www.kellerfay.com
Marketing Success in a WOM Era
Key Questions
1.What’s your story? …why should consumers talk about your product?
2. Who will tell it?…who are your influencers?
3. How can you facilitate the conversation?…what tools can you create?
4. What’s the impact?…does WOM lead to positive outcomes for my brand?
10www.kellerfay.com
TalkTrack®: A Unique System for Monitoring WOM
• TalkTrack® is the only system that:– Measures all WOM: Face to face, phone, online– Measures both the “talkers” and “listeners” (the WOM audience)
• What “talkers” are saying • What “listeners” hear and do based on WOM
– Is representative of US population, with demographically balanced samples
• TalkTrack® monitors the quantity, quality, and drivers of all WOM– Consumers report all brands they talk about (open ended)
11www.kellerfay.com
TalkTrack® Methodology
• TalkTrack® data are collected through an online survey – Sample drawn from several of largest online consumer panels– Demographically balanced to US Census for ages 13 to 69
• TalkTrack® counts conversations with assistance of 24-hour diary– Respondents recruited to take notes on conversations in 15 “marketing
relevant” categories over next 24 hours– Re-contacted a day later to answer standardized questions about
brands/companies talked about during past 24 hours
• Sample sizes to support time series analysis– 700 respondents per week; 36,000 per year– Yielding 8,000 conversational brand mentions week; ~ 450,000 per year
13www.kellerfay.com
Word of Mouth Is Mostly Face-to-Face
73% of marketing-related conversations
take place in-person
The remainder are:
1. Phone (17%)2. Email (3%)3. Instant or text message (3%)4. Online chatroom or blog (1%)5. Other (2%)
Base: Conversations (All Categories, n=256,370 conversations)Source: TalkTrack™, June 2006 through June 2007
14www.kellerfay.com
Word of Mouth Is Mostly Positive
63% 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
Base: Brand Mentions (All Categories, n=176,622)Source: TalkTrack™, June 2006 through June 2007
15www.kellerfay.com
Word of Mouth Has Impact(% highly likely to agree/take action, 9/10 on 0-10 scale)
55%
49% 49%
34%
Credibility/Believability ofWhat Was Heard
Likely to Pass Along toOthers
Likely to Purchase Likely to Seek Information
Base: Brand mentions where someone else provided advice (All Categories, n=110,183) Figures represent percentage scoring a 9/10 on a 0 to 10 scale.
Source: TalkTrack™, June 2006 through June 2007
16www.kellerfay.com
Marketing & Media Are Key Part of WOM
Base: 176,428 brand mentions* Other includes sports arenas, concert arenas and events
Nearly 1 in 2 brand conversations refer to brand marketing or media
Promotion5%
No Media/Marketing Referenced
48%
Point of Sale6%
Websites (Company/Other)
4%
Editorial/Programs11%
Advertising17%
Other*1%
Direct mail/emailing3%
17www.kellerfay.com
Marketing & Media Play Key Role
50% of consumer brand conversations refer
to marketing or media
…led by television (15%)Internet (12%)
point of sale (8%)newspapers (7%)promotions (7%)
Marketing and media are tools for encouraging WOM Base: Brand Mentions (All Categories, n=175,205) Source: TalkTrack™, June 2006 through June 2007
America’s Technology Conversation
© 2008 Keller Fay Group LLCNot to be quoted or distributed without written permission
19www.kellerfay.com
40% Talk about Technology Daily (% of respondents having at least 1 conversation in category on given day)
22%
23%
25%
27%
28%
32%
36%
38%
40%
40%
42%
43%
46%
55%
57%
Household Products
Travel Services
Children's Products
Personal Care & Beauty
The Home
Financial Services
Automotive
Health & Healthcare
Technology
Shopping & Retail
Telecommunications
Sports, Recreation & Hobbies
Beverages
Media & Entertainment
Food & Dining
% Respondents Having Conversation in Category
2.4
Average DailyConversations*
Base: 36,511 respondents*Average daily conversations among those who had discussions about each categorySource: TalkTrack®, January through December 2007
2.8
2.3
2.7
2.5
2.5
2.4
2.1
2.0
2.0
2.0
2.2
2.6
1.9
1.8
20www.kellerfay.com
Base: Branded Technology Mentions (Total, n=23,782)Note: These mentions are categorized as “technology” by Keller Fay Group, regardless of what category a respondent places them in. Source: TalkTrack®, January through December 2007
Consumer Electronics
30%
Computer Software
9%
Cameras3%
Computer Hardware
38%
Video Gaming20%
Computer Hardware & Consumer Electronics Leading Topics of Tech WOM
(Percentage of Total Technology TalkShare™ for each brand category)• Video gaming (20%), computer software (9%), and cameras (3%) make up the remainder of word of
mouth in this category.
21www.kellerfay.com
Holiday Peak for Electronics & Gaming WOM (Percentage of technology brand mentions among all brand mentions)
Technology Brand Mentions as a Percentage of All Brand Mentions
(4 week rolling average of technology brand talk)
• Video gaming and consumer electronics WOM peaked during the December holidays.
• Recently, electronics WOM is making a modest rebound.
0.0%
1.0%
2.0%
3.0%
4.0%
2006W/EJul02
2006W/EJul16
2006W/EJul30
2006W/EAug13
2006W/EAug27
2006W/ESep10
2006W/ESep24
2006W/EOct08
2006W/EOct22
2006W/ENov05
2006W/ENov19
2006W/EDec03
2006W/EDec17
2006W/EDec31
2007W/EJan14
2007W/EJan28
2007W/EFeb11
2007W/EFeb25
2007W/EMar11
2007W/EMar25
2007W/EApr08
2007W/EApr22
2007W/EMay06
2007W/EMay20
Computer Hardware Consumer Electronics Video Gaming Computer Software Cameras
Base: All Categories Monthly Mentions (June, n=21,760; July, n=27,191; August, n=26,959; September, n=27,180; October, n=21,793; November, n=28,145; December, n=28,795; January, n=44,367; February, n=32,314; March, n=38,347; April, n=22,133; May, n=25,854)Source: TalkTrack™, June 5th 2006 through May 27th 2007
22www.kellerfay.com
Polarity of Word of Mouth by Category
Quality of WOM Varies Widely in Technology
-25%
-18%
-16%
-12%
-11%
-17%
-15%
-16%
-9%
-6%
-6%
-4%
-8%
-8%
48%
62%
68%
75%
77%
66%
65%
MixedNegative Positive
41
46
35
All Categories
Computer Hardware
Computer Software
Base: Branded Conversations (All Categories, n=133,304; Technology Category, n=10,803; Cameras, n=292; Video Gaming, n=1,175; Consumer Electronics, n=3,396; Computer Hardware, n=4,366; Computer Software, n=942) NOTE: Technology category results includes conversations/brands that respondents group in this category, whereas cameras,video gaming, consumer electronics, computer hardware/software may have been mentioned by respondents in any category.Source: TalkTrack®, January through December 2007)
57
Consumer Electronics
Cameras
Video Gaming
Technology Category
• Computer software and hardware fall below the average Net Advocacy. Although cameras are low in terms of quantity of WOM, they earn the highest Net Advocacy.
42
7
62
Net Advocacy (positive less mixed and negative talk)
23www.kellerfay.com
76%
17%
3% 2% 1% 2%
16%
4% 4%2% 1%
73%
Face-to-face Phone Email IM/Text message Onlinechatroom/blog
Other
All Categories Technology Category
Even Most Tech Conversations Face-to-Face(How word of mouth conversation was conducted)
Base: Conversations (All Categories, n=187,790; Technology Category, n=11,876)Note: Percentages may not sum to 100 due to rounding. Source: TalkTrack®, January through December 2007
• Tech WOM and usage seem to go hand-in-hand as online communication modes perform slightly better than the average for all categories.
Online (NET)
All Categories: 6%
Technology: 10%
24www.kellerfay.com
-29%
-24%
-20%
-18%
-20%
-16%
-25%
-15%
-8%
-9%
-7%
-6%
37%
49%
59%
62%
63%
68%
Polarity of Technology Word of Mouth
Online WOM Less Positive Than Offline
MixedNegative Positive
36
9
Computer HardwareOnline Conversations
Computer SoftwareOffline Conversations
Base: Branded Conversations – Offline/Online (Consumer Electronics, n=3,024 / 317; Computer Hardware, n=3,927 / 376; Consumer Electronics, n=3,024 / 317) Source: TalkTrack®, January through December 2007
31
Computer HardwareOffline Conversations
Consumer ElectronicsOffline Conversations
Consumer ElectronicsOnline Conversations
46
-17
35
Net Advocacy (positive less mixed and negative talk)
Computer SoftwareOnline Conversations
25www.kellerfay.com
Apple’s Online and Offline WOM Sometimes Similar, Other Times Different
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
2006
W/E
Jul
02
2006
W/E
Jul
23
2006
W/E
Aug
13
2006
W/E
Sep
03
2006
W/E
Sep
24
2006
W/E
Oct
15
2006
W/E
Nov
05
2006
W/E
Nov
26
2006
W/E
Dec
17
2007
W/E
Jan
07
2007
W/E
Jan
28
2007
W/E
Feb
18
2007
W/E
Mar
11
2007
W/E
Apr
01
2007
W/E
Apr
22
2007
W/E
May
13
2007
W/E
Jun
03
2007
W/E
Jun
24
2007
W/E
Jul
15
2007
W/E
Aug
05
2007
W/E
Aug
26
2007
W/E
Sep
16
2007
W/E
Oct
07
2007
W/E
Oct
28
2007
W/E
Nov
25
2007
W/E
Dec
16
2008
W/E
Jan
06
2008
W/E
Jan
27
Net Offline Net Online
Moving together
Moving independently
Base: Total Conversations 4 week average (Offline, n=15,416; Online, n=1,222)Source: TalkTrack®, July 2006 through December 2007
26www.kellerfay.com
Relationship Between Online & Offline WOM Also Varies for Dell
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%Net Offline Net Online
Moving independentlyMoving together
Base: Total Conversations 4 week average (Offline, n=15,416; Online, n=1,222)Source: TalkTrack®, July 2006 through December 2007
27www.kellerfay.com
Microsoft’s Online WOM Is Far More Volatile than Its Offline WOM
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
2006
W/E
Jul
02
2006
W/E
Jul
23
2006
W/E
Aug
13
2006
W/E
Sep
03
2006
W/E
Sep
24
2006
W/E
Oct
15
2006
W/E
Nov
05
2006
W/E
Nov
26
2006
W/E
Dec
17
2007
W/E
Jan
07
2007
W/E
Jan
28
2007
W/E
Feb
18
2007
W/E
Mar
11
2007
W/E
Apr
01
2007
W/E
Apr
22
2007
W/E
May
13
2007
W/E
Jun
03
2007
W/E
Jun
24
2007
W/E
Jul
15
2007
W/E
Aug
05
2007
W/E
Aug
26
2007
W/E
Sep
16
2007
W/E
Oct
07
2007
W/E
Oct
28
2007
W/E
Nov
25
2007
W/E
Dec
16
2008
W/E
Jan
06
2008
W/E
Jan
27
Net Offline Net Online
Base: Total Conversations 4 week average (Offline, n=15,416; Online, n=1,222)Source: TalkTrack®, July 2006 through December 2007
28www.kellerfay.com
Online vs. Offline WOM
• Much more happens Offline• Offline and Online WOM are not the same
– Offline is more positive; online more negative– The two forms often follow different trajectories
• Yet, instinctively, we know the Internet is vital to word of mouth, particularly in the technology category
• Smart marketers will understand and seek to maximize WOM in both offline and online channels
29www.kellerfay.com
All Categories Technology
WOM
Percent of Brand Mentions Involving One or More References*
45% 51%
Television 14 11
Internet 11 20
Newspaper 6 6
In Store Display/Video 5 8
Direct Mail/E-Marketing 4 5
Magazine 4 6
Coupon/Circular 5 3
Radio 2 2
Product Package 3 4
Product Sample 3 3
Billboard Ad 1 1
Base: Brand Mentions (All Categories, n=132,421; Technology Category, n=12,395; Offline, n=11,230; Online, n=1,165) *Respondents are able to select up to two media/marketing references, so percentages do not add to the top summary row.Source: TalkTrack™, January through December 2007
The Internet’s Vital Role Is in Supplying Content to WOM
(% citing marketing or media source in conversation)
30www.kellerfay.com
All Categories Technology
Percent of Brand Mentions Involving One or More References*
45% 51%
Television Ad 9% 8
Television Program 6 3
Company Website 4 6
Internet Ad 3 6
Internet Blog or Chatroom 1 2
Online Consumer Reviews 1 4
Other Website 2 3
Newspaper Ad 4 4
Newspaper Article 2 2
Magazine Ad 2 4
Magazine Article 2 3
Radio Ad 1 1
Radio Program 1 1
Company Websites, Online Ads, Online Reviews Important in Driving Tech WOM
(% citing specific media element in conversation)
Internet
Television
Newspaper
Magazine
Radio
Base: Brand Mentions (All Categories, n=132,421; Technology Category, n=12,395; Offline, n=11,230; Online, n=1,165) *This table only includes media channels (e.g. excludes POS, promo, etc.). Media sums will not always add to the totals on the previous slide because respondents sometimes select more than 1 item in the same media group (radio ad & program). Source: TalkTrack®, January through December 2007
Who Are the WOM Leaders in Tech?
© 2008 Keller Fay Group LLCNot to be quoted or distributed without written permission
32www.kellerfay.com
Quantity of Word of Mouth
Dell Leads in Terms of WOM Volume(Technology brands with most mentions in TalkTrack® for 2007)
1. Dell Computers2. Sony3. Microsoft4. Apple Computer5. iPod6. HP7. Nintendo8. PlayStation9. Samsung10. Xbox
Base: Technology Brand Mentions (Total, n=28,503)Note: Brands are color coded to indicate which technology brand category they belong to.Source: TalkTrack®, January through December 2007
• Consumer electronics, computer hardware, and gaming are equally represented with three brands each in the Top 10.
33www.kellerfay.com
Quality of Word of Mouth
Cicso & Nintendo Lead in WOM Quality(Based on Net Advocacy: Positive less negative/mixed word of mouth for 2007)
Base: Branded Technology Conversations (Total, n=12,12,689)* (* Brands with 50 or more mentions)Note: Brands are color coded to indicate which technology brand category they belong to.Source: TalkTrack™, January through December 2007
1. Cisco/Linksys2. Nintendo3. Halo4. Kodak5. Canon6. Intel7. Creative Labs8. Xbox9. PlayStation10.iPod
• Camera brands, which do not even make it on the top 10 list in terms of quantity of word of mouth (previous slide) appear when looking at WOM Quality (as measured by Net Advocacy).
34www.kellerfay.com
In Summary
• WOM is a powerful driver of consumer technology• WOM works differently than you might expect
– Mostly offline – Mostly positive – Often driven by advertising and other marketing
• The Internet is key, but not the way you expected– Provides content to offline WOM– Must align offline and online marketing strategies– Need measurement approaches to capture both offline & online
• Your brand can be a WOM leader– Use marketing to drive higher levels of talk– Product quality and best customers key to high quality talk
Thank you!
© 2008 Keller Fay Group LLCNot to be quoted or distributed without written permission
36www.kellerfay.com
Ed Keller, CEO
• President of Word of Mouth Marketing Association (WOMMA)
• Has been called “the godfather of word of mouth marketing research”
• Former CEO of RoperASW, a top 20 market research firm
• Co-author of business bestseller The Influentials, a 2004 Berry-AMA Award finalist for most important marketing book of the year
• Two decades working with Influentials™ segment
• 25-year veteran of market research industry; board member Advertising Research Foundation (ARF); 2005-06 President of the Market Research Council
• Visiting Lecturer at University of Pennsylvania’s Annenberg School of Communication, Spring 2006
37www.kellerfay.com
Keller Fay Group
Keller Fay Group
65 Church Street
3rd Floor
New Brunswick, NJ 08901
732.846.6800 (Tel)
732.846.6900 (Fax)
Ed Keller, CEO, [email protected]
Brad Fay, COO, [email protected]