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Buzz Marketing Tested As Effective Approach
In their quest to transcend the 30-second spot, more brands turn to word-of-mouth firms
September 01, 2005
By Cara Marcano
Last month, 1,000s elected Hispanics nationwide received in the mail a head-to-toe outfit — pants, shirt, socks and belt — from Levi's Dockers to try out for fit and feel.
The effort was no traditional direct mailing, but the beginning of a six-figure, word-of-mouth campaign executed by Boston-based marketing firm BzzAgent Inc.
In exchange for the free outfit, recipients (also known as Bzz Agents) received BzzKits with instructions on how and where to wear the pants and how to strike up conversations about them with friends, family, colleagues and even random strangers. The agents also are required to file weekly online reports about what happened when they started chatting up the product in question.
Though the outfits are for men, the company decided to also allow 20 percent of its participating agents to be female, because though men are increasingly style conscious, research shows women often wear the pants, so to speak, when it comes to their men's attire.
BzzAgent charges clients a standard $95,000 for such an effort, which includes a 12-week, 1,000-agent program. Not included are product samples and agent awards. Prices go up and down from there depending on how many agents are employed to create the buzz, says Vanesa Kolodziej-Guerra, director of BzzAgent's Hispanic channel, which launched in mid-July.
One of the oldest forms of marketing, word-of-mouth has been used to target Hispanics, who are known for talking about products and services with large networks of family and friends. Thirty-five percent of Hispanics say they would tell a friend not to shop at a store where they were treated rudely, according to a June study by Parsippany, N.J.-based market research firm Ipsos Loyalty.
Many marketers executed a version of the strategy using public relations or other grass-roots means before larger TV, radio, print and other traditional media budgets opened to Hispanic advertising. But for the first time, the phenomenon is developing as a tried-and-true marketing practice. For example, six months ago, The Word of Mouth Marketing Association was founded, and today the group has more than 150 members.
"[Buzz marketing] is nothing new to me as a Hispanic marketing specialist," says Heidi Eusebio, founder and director of Edelman's Diversity Solutions business. "But it's now starting to develop as an actual discipline within Hispanic marketing."
That is due, in part, because the Internet has made it easier to create networks and distribute information to greater numbers of potential word-of-mouth agents, says Richard Israel, founder of the Hispanic division at Informative, a Brisbane, Calif.-based online word-of-mouth marketing service launched in July. "With traditional focus groups, size is a limitation," Israel says. "The technology has made it easier for this information to travel. You can send an e-mail or use blogs. You can contract and report on thousands of conversations so we can rank consumer ideas."
Though similar, Informative's strategy is different from that of BzzAgent. BzzAgent recruits participants for campaigns from volunteers who sign up on the company's Web site. Some are new visitors and some of the 5,000 active Hispanic members were recruited from BzzAgent's general-market list of more than 100,000 agents. The company predicts it will have 15,000 Hispanic representatives by December.
To market its Hispanic service, BzzAgent is offering a one-time, 20 percent discount for the next three Hispanic BzzChannel clients who sign up for a campaign. "Because the Hispanic BzzChannel is a new offering, we are pricing it more aggressively," says Kolodziej-Guerra.
Informative, in contrast, is executing a strategy that focuses heavily on individuals identified by some psychologists and marketers as early adopters. These so-called trendsetters are great communicators, with tons of acquaintances, who tend to talk a lot about products. Informative is spending significant dollars developing technology to identify these individuals and educate them about products and services so they can spread the word, Israel says. "Of 10 people in a room, only two are advocates for a brand or product, but everyone might be talking or buzzing about say, Janet Jackson's wardrobe malfunction at the Super Bowl last year," he says. "Buzz marketing is about getting people to talk about your products; our strategy is to get 10 out of 100 people who are brand advocates talking about a product."
Both BzzAgent and Informative were founded by private equity investors who see a huge demand for word-of-mouth marketing efforts organized online and executed just about anywhere. Other companies active in the space include blog search firm Technorati Inc. of Sunnyvale, Calif., and Cincinnati-based Intelliseek, both launched this year. These companies electronically monitor word-of-mouth as it appears on message boards, in chat rooms and blogs.
But critics say the buzz about buzz isn't supported by market research."It doesn't work most of the time," says Timothy Keiningham, senior vice president and head of consulting at Ipsos Loyalty. "It tends to work with movies or any type of entertainment or high-risk related thing, such as advice on moving to a new neighborhood. Obviously, you can't be a successful hip-hop artist without it, but you can't sell toilet paper with it. For most product categories it's a pretty weak source of customer acquisition."
But marketers are in desperate need of a way to take things beyond the 30-second TV spot. Some companies pay for the efforts with funds from their marketing budgets, while others finance the work with research money, says Kolodziej-Guerra. For now, only a handful of brands have begun including a paid form of word-of-mouth in their yearly marketing budgets. In addition to Levi's, Cadbury Schweppes' Clamato brand began a campaign through BzzAgent on Aug. 1. Agents received cans of Clamato and Clamato coupons and info about how to invite colleagues to a "Clamatito Fridays" happy hour in place of a traditional after-work drinking. Agents were also instructed to take Clamato to a party or picnic. "Now," says Kolodziej-Guerra, "we are just waiting for the buzz."
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