ChatThreads ChatterBox

Free access to Admap article: "Is Talking Getting You Anywhere? Measuring WOM Marketing"

Here's a PDF of my Admap article (Admap allows us to post it free for 30 days so read it now, or get your subscription to Admap). Be sure to check out other Admap articles devoted to WOM as well.

It was strange for me to give up editorial control over the final content of the article. Overall, though, the editors did a great job making my verbose language choices more concise and incorporating images and tables to bring the content alive. Just a couple comments to clarify some of the content:

- Figure 3 on p. 19: There should be a dollar sign not a pound sign by Net Conversation Value. (While we do work in the UK, this Conversation Value Model analysis was done for a U.S. client. Must have been a typo missed in the final editorial process).

- The blurb by the photo on p. 17: "Research by ChatThreads found that 50% of influencers' conversations were face-to-face, while 35% took place online." Be sure to read the full text in the body since we measured this for a new technology product launch where a company engaged influential bloggers. Other programs we measure, such as for CPG products, typically have 80%-90% of WOM that takes place offline. (Also, the article states that ChatThreads is the WOM marketing agency, while that text should refer to Matchstick).

WOMMA Webinar: Measuring the Value of WOM, Come Rain or Come Shine

What are you doing at noon EST on Thursday, April 9th?

You should be calling in to the free webinar I am doing (courtesy of the Word of Mouth Marketing Association) on how to measure the value of consumer conversations. It's free whether you are a WOMMA member or not. Here's the official blurb:

Whether the days are cloudy or sunny, or your brand is in or out of the money, measuring the value of word of mouth (WOM) has become a strategic imperative. This webinar will guide participants through five ways that consumer conversations impact a brand’s bottom line and offers specific tips and techniques to assess the value of WOM to your brand.

Hope to see you on the call! Register Here

Admap series of articles on WOM Marketing

Be sure to check out the current issue (April 2009) of Admap which has a series of articles on word of mouth. Articles include:

Where is talking getting you? Measuring WOM
Comparing new models for measuring word-of-mouth ROI, such as Conversation Value, Momentum Effect and Net Promoter Economics. 
Dr Walter Carl, ChatThreads

Influencers are essential in driving WOM
As demand for word-of-mouth marketing has grown, so has the need for insight into how influencers stimulate demand. 
Ed Keller and Brad Fay, Keller Fay Group

Empower consumers to shape the brand
Getting word-of-mouth right is not about telling people what to think, and may require a change in corporate culture. 
Ivan Palmer, Wildfire

Paying lip service is not enough
Word-of-mouth needs to be integrated into the whole brand development process, not tacked on as an afterthought. 
Geoff Gray, Naked Communications

Tap into passions of brand advocates
To ensure productive and long-term conversations with consumers, a brand must first identify its discursive matrix. 
Molly Flatt, 1000heads

The Anatomy of Buzz Revisited

If you haven't heard yet be sure to check out Emanuel Rosen's newly revised book The Anatomy of Buzz Revisited. I have long advocated the original version of the book and have used it in teaching my classes on word of mouth and social media. I would tell people that if they could only read one book on WOM marketing to read this one. But after talking with Emanuel about his plans to rewrite the original and being interviewed for it I am now recommending that people read the new version. Here's the marketing blurb I wrote for it:

"I'm sorry to say I can't recommend The Anatomy of Buzz as my top pick anymore. There's something better out there and it's called The Anatomy of Buzz Revisited. Like its predecessor, it's accessible, compelling, and is based on solid principles of how word of mouth works, but this book has been completely revamped to include fresh material, new topics, and the latest research."

You might also be interested in Guy Kawasaki's interview of Emanuel Rosen. Be sure to check out question 13 in this interview: "How can a company effectively measure the buzz it's generating?"

The book is officially available February 24th.

Cross-posted from Word-of-Mouth Communication Study

The Future of Measurement: Predictions for 2009

Over at Social Abacus, Kate Niederhoffer compiled a list of predictions for 2009 about measurement and analytics. Below are four broad themes she pulled out from individual researchers' contributions to the discussion. You can download her summary as a PDF file from her post.

• We will substantially advance our understanding of individuals and the meaningful connections they have.

• We will identify methods to tap what people are *really* thinking, feeling, and paying attention to, meanwhile gaining insight on what a measurement is truly capturing.

• We will determine how to measure the value of social interactions and attach financial value, whether we’re monetizing attention or a new medium.

• We will build better tools to manage-- analyze and visualize-- massive volumes of data, primarily tapping the evolving social graph.

Doin' It "Animal Style" In Vegas

I am on my way home from Las Vegas after attending the Word of Mouth Marketing Association's annual conference and had to stop at In-N-Out on my way to the airport.

As I was placing my order in the drive-thru my taxi driver heard me ordering a Double-Double with onions. He said "Make it 'animal style'." I was sure I had no idea what that meant. He said "grilled onions and extra sauce."

I knew about the grilled onions, but not this animal style business. I was skeptical so I made sure to tell the In-N-Out guy just give me the Double-Double with grilled onions. But the cabbie wouldn't have it. He insisted I do it animal style.

In the face of such certainty, and with a bit of adventure, I told the guy at drive-thru to make it animal style.

I've been going to In-N-Out every trip to the West coast for the past 15 years and had never done it animal style. Never even heard of it. I was an animal style virgin. I felt so naive and vulnerable.

But no more.

With great anticipation I ripped into the first bite, and it did not disappoint.

It was a little more greasy than what I was used to but the flavor was richer beyond my wildest dreams. I devoured it with a raw, hungry passion. I didn't want it to end but knew it must.

The cabbie says he's made the recommendation to 150 people and I can see why.

I tipped him extra in appreciation when he dropped me off at the airport.

My first time doing it animal style was special indeed. Maybe it can be for you too. As it turns out, a relevant word of mouth recommendation, with a bit of surprise and delight, is good for everyone.

State of Word of Mouth Research & Measurement 2008

Earlier this morning I presented the State of Word of Mouth Research and Measurement at WOMMA's annual Research Symposium. You can see it here.

What Does Facebook Do?

Facebook has a new way of describing itself.

It used to be: "Facebook is a social utility that connects you to the people around you."

Now it's: "Facebook helps you connect and share with the people in your life."

Rather than describing what it is AND what it does, it now just describes what it does. In this case, I think it's a better move because most people never really understood what a "social utility" is. Plus, it shifts the locus of agency from Facebook to you, the user.

If anyone knows of any other self-descriptions Facebook had throughout its history please mention in the comments.

Cross-posted from Word-of-Mouth Communication Study

Mapping the Social Networks of a Small Town

There's a fascinating article in the New York Times about how Unilver is attempting to map the spread of conversations about their Vaseline lotion, Clinical Therapy, in an Alaskan town.

 

Through mapping the conversations Unilever was able to identify a network hub, Petal Ruch, who was apparently the most well-connected town resident. Unilever's advertising  agency and production company then built a marketing campaign around her story.

 

The network map is supposed to make its way onto a branded website called Prescribe the Nation.

 

Given our research on mapping the conversational geography of word of mouth and we're especially interested in this endeavor and will watch with interest how this develops.

Cross-posted from Word-of-Mouth Communication Study

Why iPhone Didn't Get Me (Yet)

I have used a Palm for a number of years: Palm IIIe, Zire 71, Treo 600, Treo 650, and currently my Treo 700p -- and love smartphones.

But I have used Apple computers for even longer -- Apple IIe, IIGS, Mac Powerbook G3 and most recently my 24" iMac -- so I was naturally intrigued by the iPhone.

Three factors made this a relevant time for me to consider switching to the iPhone: 1) the new iPhone 3G release, 2) my wife's mobile phone was falling slowly towards its demise and my Treo 700p is on the older side, and 3) we have both fulfilled our contract so there's no penalty fee for switching.

And if you know your research on word of mouth you know that conditions of higher risk and uncertainty are fertile grounds for WOM and information-seeking behavior. This was true for me. Everyone I see who has an iPhone I've talked to and I've asked about their experiences with it. I watched the Steve Jobs keynote when the new iPhone was released, and have read a number of online ratings and reviews from lay and professional reviewers.

So, why haven't I switched?

First of all, let's pause for a second because most research on persuasion and influence focuses on change, not maintenance, of existing behaviors.(A point I learned especially well in grad school with my advisor, Dr. Steve Duck, who often noted that research on personal relationship tended to focus more on relationship change rather than sustaining or maintaining relationships).

But there's a lot of insight we can learn by focusing on why things DON'T change, just as much as why things DO change (and perhaps more so).

Why I'm tempted to switch to the iPhone:

1) Sleek interface

2) The promise (but not necessarily reality) of a seamless experience with my Mac via MobileMe

3) App Store

4) Larger screen

5) Better music, video, and photo experience

But why didn't I switch?

1) Mobile phone network. I don't like being forced to switch from Verizon to AT&T.

2) I have a lot of money invested in software and peripherals for my Treo. Dictionaries, eReader Pro,  Agendus,  Clock Wireless, Docs to Go, PDA Net, Volume Care, Missing Sync, and games like Scrabble and Monopoly, expansion cards, sync cables, chargers, extra battery, etc.

3) Replaceable battery. It bothers me that you can't replace the battery in the iPhone.

4) I can use my Treo to tether to my laptop to get an internet connection (using PDA Net).

5) Developers are still programming for Treo, such as the TypePad and Facebook apps, so I feel I'm still current.

6) I use iTunes but I don't like being bound to it. I like that I can load my own MP3s (I still buy old school CDs so I can rip them and use them in both iTunes and on my Treo).

7) Identity reasons. I like to think I make autonomous decisions (though I know this is often a pleasant fiction I tell myself) and am not interested in switching just because something is shiny and new. Plus, my Treo 700p still works great and there's some pride in using it until it dies (though note this is near last on my list and didn't stop me in anyway from switching from the 600 and 650, both of which I sold on eBay in order to upgrade).

8) It seemed a lot of money for both me and my wife to switch to new iPhones. We save money being on the same network so our decision is going to be a mutual one.

So my wife and I decided to stay put -- for relational reasons having to do with the fact that we are in it together, functional reasons, identity, and financial reasons. And she just ended up buying a Palm Centro. More reason to stay put, for now!

"Is Talk Cheap? How Cheap?": Conversation Value and Conversation Cost

I was excited to see an article in Brandweek about the value of a conversation titled "Is Talk Cheap? How Cheap?". The article is about how the WOM industry is making efforts towards a standardized ROI metric, or at least a set of standardized metrics.

There are some really important points in this article, and to fully appreciate it I think it's valuable to understand the distinction between the *cost* of a conversation and the *value* of a conversation.

First, some key points from the article:

- putting a value on a WOM conversation is indeed a hot topic and definitely worthy of coverage
-  the Word of Mouth Marketing Association, of which ChatThreads is a member, is helping to shape the discussion on this important topic
- when determining how to attribute purchases to a particular initiative it can be challenging, though not impossible, to isolate the effect of WOM especially in light of other influences going on in the market
- there are companies actively working in this space to help define the value of a conversation (by the way, here are links to papers by three of the companies mentioned in this article who have written on this topic: ChatThreads, Satmetrix, and BzzAgent's series of papers and stay tuned for more in the upcoming Measuring Word of Mouth research book by WOMMA).

Second, to appreciate this topic it's important to distinguish between conversation cost and conversation value. Here's the scoop:

One way to calculate the *cost* of a conversation is to divide the amount invested in a marketing initiative by the number of conversations that can be attributed to that marketing initiative (this is the formula that BzzAgent was cited as using in the article and how they arrived at a figure of $0.50 per conversation).

A different formula is required to calculate the *value* of a conversation. At ChatThreads we use the Conversation Value(TM) model which incorporates the conversational reach of a marketing initiative, reported purchase behaviors, and a number of other factors related to customer lifetime value (see the white paper for details). The outcome of this analysis is a single number, like $0.51 per conversation, which means that each time a conversation occurred about a particular brand that can be attributed to a marketing initiative, the bottom-line value to the brand was $0.51 (if the number is negative then the program failed to deliver a positive ROI). Based on our internal analysis we have found that this number can vary widely across product and industry categories, as one might expect.

In the Brandweek article, the figure that is attributed to BzzAgent refers to the average cost of a conversation. The figure that is attributed to ChatThreads refers to the value of a conversation (for a particular lower-involvement CPG product).

To summarize then, the cost of a conversation refers to the resources the company invested to generate those conversations (whether it be media spend, investments to improve the product or customer service, etc.). The cost of a conversation is established by the market, and can be used to set the rate for media spend, for example. The value of a conversation is the bottom-line impact to a brand of a WOM conversation. It is established by research and can be used to measure the effectiveness of particular marketing initiatives and for ongoing tracking of a company's performance.

This is an exciting time for WOM research and I'm appreciative that Brandweek chose to cover this important topic. Stay tuned for more research throughout the upcoming year!

(By the way, if you are a researcher who has something to add to this topic please consider contributing to the special section on Value of a Conversation for the Word of Mouth Marketing Association's research book, Measuring Word of Mouth, Volume 4.)