Word on the Street

By Barbara Kiviat
Time Magazine
April 18, 2007

The next time someone you know raves about a dish detergent or motor oil, consider this: you might be on the receiving end of a clever marketing campaign. It’s a brave new world for people whose job it is to sell you things, what with consumers’ TiVo-enabled ability to skip over ads they don’t want to see, and their Internet-empowered freedom to find out all the stuff left out of a cheery 30-sec. TV spot. That’s driving marketers to all sorts of new places, including your circle of friends--a trend that has produced some surprising intelligence on how word-of-mouth communication really works.

Procter & Gamble, a pioneer in the field, has been taking control of word of mouth for six years through its Tremor division, which has enlisted 225,000 teenagers to tell their friends about brands like Herbal Essences and Old Spice. Last year, figuring the strategy could be just as effective with adults, P&G signed up 500,000 volunteers, all mothers, for Vocalpoint, a program in which the moms evangelize about pet food, paper towels and hair color. P&G gives the women marketing materials and coupons, but they are free to say whatever they like (or nothing at all) about the products. BzzAgent, a firm that specializes in word-of-mouth marketing, has its 260,000 volunteers submit detailed profiles about their habits and interests, which BzzAgent uses to match them to word-of-mouth campaigns for products made by companies such as Nestlé, Arby’s, Philips, Kraft and BP. The so-called agents are provided with information about the clients’ products and in return give detailed feedback about the conversations they have.

This unscripted strategy might sound like a big risk--there’s nothing stopping the volunteers from saying they hate a product. But despite the conventional wisdom that consumers are much more likely to voice complaints than praise, recent research finds the opposite. In one study, Andrea Wojnicki, an assistant professor of marketing at the University of Toronto, looked at self-styled experts and found that they were likely to keep negative experiences to themselves, lest their skill--at, say, picking a restaurant--be called into question.

And why are these citizen marketers so willing to shill for free? “It gives people social currency,” says Walter Carl, an assistant professor of communication studies at Northeastern University. Inside access to products and the feeling that companies care about what you and your friends think are such strong motivating forces that other forms of compensation pale in comparison. BzzAgent’s members earn reward points, which they can cash in for prizes like DVDs and books--yet 87% of them never do.

Word of mouth has been around for ages--"Try the apple,” said Eve--and it continues to prove resilient. Even in the era of MySpace, some 90% of word of mouth still happens off-line, according to research by both P&G and the consultancy Keller Fay Group. Breaking it down, Keller Fay found that 18% of word-of-mouth marketing took place on the phone, and 72% face to face, despite the ubiquity of electronic communication. Or perhaps because of it. Inundated by marketing messages, says Tremor CEO Steve Knox, “consumers have gone back to their most trusted source--family and friends.”

Naturally, some people aren’t happy about marketers’ following them there. In 2005 the advocacy group Commercial Alert asked the Federal Trade Commission to investigate company-fed word of mouth and other buzz tactics, which the group says take authentic relationships and unduly commercialize them. Not all firms ask word of mouthers to disclose their corporate connection, but the Word of Mouth Marketing Association requires its 400-odd members to do so as part of its ethics code. There might also be a business case for disclosure, according to Northeastern’s Carl. Working with BzzAgent data, he found that agents actually gain credibility by mentioning their affiliation. Word of mouth is built on trust, explains Gerald Zaltman, a sociologist and professor emeritus at Harvard Business School. Fessing up reinforces that.

But perhaps the biggest lesson companies can learn from word of mouthers is that there’s an unmet social need among consumers to feel that their opinions matter. “They care what you have to say,” says Carol Engels, a Vocalpoint mother in suburban Chicago. “That’s what I like most.” Smart companies find that when they listen, they also get a shot at steering the conversation.