If you would like to hear more about this research we encourage you to join us in a webinar we will be hosting on Tuesday, July 21 at 2pm EDT/11am PST. If you would like to participate, register by clicking here.
The rising power of word of mouth, and social media, has led some prognosticators to proclaim the "death of advertising."
But increasingly, we see that there is a symbiotic – not adversarial – relationship between advertising and word of mouth advocacy for brands. And there is now new evidence that media plans can be designed and evaluated on the basis of their ability to help advertisers drive word of mouth.
Previously in this column, I wrote about the important – and often underestimated – role advertising plays in driving word of mouth. Research conducted by my company, the Keller Fay Group, shows that 20% of all word of mouth conversations include a reference to advertising, which is an important indication of consumer engagement with ads, and leads to a significant "multiplier effect" for ads as their message is passed along via word of mouth.
As importantly (if not more so), conversations that include references to advertising are significantly more likely than other conversations to include active recommendations to buy/try the brands being discussed. Our research on this topic was featured at the Wharton School's Symposium on the Future of Advertising in December, and in a new, special issue of the Journal of Advertising Research that emerged from that conference and is focused on "What We Know About Advertising: 21 Immutable Laws for Intelligent Advertising Decisions."
Now there is additional research, unveiled recently at the ARF's Audience Measurement 4.0 conference by Graeme Hutton, SVP of Universal McCann and my partner, Brad Fay, that shines a different light on the topic. The aim of this new research is to explore the relationship between advertiser media weight and word of mouth.
If a relationship can be found, then there is an opportunity (a) to use the model to evaluate the consumer effects of an ad campaign using WOM as an interim action standard between tracking recall and sales; and (b) on a forward basis, to predict word of mouth levels based on media spend levels.
Further, media agencies can use word of mouth data, coupled with audience data, to plan media buys in innovative new ways. And media companies can use word of mouth in ad sales as a way to differentiate their audience on this important dimension – the ability of the audience to drive word of mouth based on advertising in that medium (or cross platform, for multimedia properties).
Two tests were conducted, with fascinating results that illustrated the importance of advertising in driving WOM generally, while also demonstrating the value of print and television advertising specifically.
The first case – Advertiser A -- involves a "top 50" WOM brand that gets strong recommendations from consumers who talk about the brand. The research – which combined word of mouth tracking from my firm, with TNS AdSpend data -- found that media weight could explain 89% of word of mouth, a very strong statistical fit. Further, the research found that for this particular advertiser, the ROI for print media (especially magazines but also newspapers) was considerably higher than for television. In fact, magazines were found to be 25 times as efficient as television.
A second test was for Advertiser B, a "top 10" WOM brand. In this case, we once again found a very strong 80% relationship between media weight and advertiser WOM. But unlike the results for Advertiser A, where advertising was found to be a very important driver of WOM, here we found that other factors account for 77% of WOM. And also unlike Advertiser A, here we found that TV provides higher WOM ROI than print.
The results of this research – which is the first stage of a continuing effort -- show that there is a clear and predictable relationship between ad expenditures and word of mouth. And, because the relationship between advertising and word of mouth can be effectively modeled and predicted, it is the authors' conclusion that word of mouth can be used as a broad metric of ad effectiveness. Further, it provides further support for the importance of thinking about WOM as a key outcome variable of advertising and marketing. Those that do so will reap benefits as the effect of their efforts will be extended via word of mouth, and enhanced because of the credibility that WOM carries.
If you would like to hear more about this research we encourage you to join us in a webinar we will be hosting on Tuesday, July 21 at 2pm EDT/11am PST. If you would like to participate, register by clicking http://kellerfay.com/?page_id=221.
Ed Keller, CEO of the Keller Fay Group, has been called "one of the most recognized names in word of mouth." The publication of Keller's book, The Influentials, has been called the "seminal moment in the development of word of mouth." Ed can be contacted at firstname.lastname@example.org.
Read all Ed’s MediaBizBlogger commentaries at Ed Keller - MediaBizBlogger.