Two research studies about the importance of word of mouth in China came to my attention recently. One was by Initiative and the other by TNS. These come on top of a 2010 article in the Harvard Business Review on "The Power of Word of Mouth in China" by two McKinsey consultants who say, "Physical or virtual, word-of-mouth is an essential brand-building tool for companies in China."
To gain a better understanding about word of mouth and social media in China, I had a discussion with Asit Gupta. After 17 years with multinational companies like Procter & Gamble, British American Tobacco, and DDB Advertising - in India, Russia, UK and Greater China -- Gupta recently started Advocacy, a word of mouth marketing company in China,. Advocacy is the only WOM activation company in China affiliated with WOMMA, which is how we met.
Q. Word of mouth and social media are big and growing forces in the marketplace in developed markets such as the US and Europe. Can you tell us what the situation is in China?
A. WOM has a huge influence in China, even more than in developed countries. The reasons for this are understandable given the history of information control by authorities which continues even today and extends, to a degree, to the content in commercials. Further, trust in product integrity is low as there are fake and counterfeit products even in FMCG categories. Thus even before 2006, when social media sites like Facebook or RenRen, were launched, Chinese consumers were massive users of BBS forums to exchange opinions on products and services.
Q. You say that WOM is quite influential in China. But how evolved is word of mouth marketing? How much of what's happening in word of mouth marketing in China is based on the growth of online social networking tools, and how much is based on offline WOM. Are there any important statistics we should know about?
A. WOM marketing is in its infancy in China. Most marketers are associating WOM marketing with digital social media campaigns and have a traditional "campaign" approach to WOM marketing. They need to recognize that effective WOM which drives purchase is grounded in authentic product experience, and requires sustained engagement with a community of real consumer influencers (not celebrities). Here is where offline plays a significant role. Further the web usage amongst key demographics like moms in Chinese cities beyond the four Tier 1 cities is less than 25%. So a reliance on just online for WOM creation, especially for non-youth orientated categories, is not enough and produces low ROI.
Q. You have been a marketer in a number of countries other than China, including India and Russia. Are there things about word of mouth in China that are unique? And what are the things that are similar to what you've seen elsewhere?
A. All 3 countries are quite unique in their history, culture, information control and general technology orientation, which in turn impacts marketing in general. In Russia I worked in the Tobacco category. The #1 premium brand in Russia today (Kent) was built on a WOM marketing campaign using influencer seeding, way back in 1999 before digital social media existed. Thus I have seen the concept of influencers in action – namely, a certain percentage of the target audience in a category having disproportionate influence over others. This applies in all the markets where I have worked.
However, there are 3 things in China that make WOM even more powerful and relevant for marketers.
First, mass media inflation is the highest in the world leading to most TV commercials being 15 seconds. How does one communicate a brand story in 15 seconds? WOM marketing can provide depth in messaging. Second, product integrity is a huge issue in China across categories. A friend's endorsement about a product thus is very reassuring. Such issues don't exist as much in other countries. And finally, the "follower" mentality is quite prevalent. People don't like sticking out, and therefore they look at what others are doing, saying and buying for reassurance that they are using the right products.
Q. On a personal note, I'm always interested to know about what motivates an entrepreneur to leave the comfort of a corporate position and start a new venture.
A. Many of my friends often ask why I launched Advocacy. Is this just an entrepreneurial bug? Is it a great commercial opportunity which will make me a multi-millionaire when we get acquired? The answer is simple. The continued lack of authenticity and accountability in the marketing communications world is startling. Things have not moved on despite the world having changed. The case for marketing WITH the consumer is well established, but we still keep marketing TO the consumer. We continue to set up measurements poorly. As a passionate marketer, this pained me. But, at the same time the opportunity to do something about it in China and Asia was huge. With Advocacy, we are flying the flag for Authentic and Accountable marketing.
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 email@example.com. You can follow Ed Keller on Twitter: @kellerfay
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