Consumer-Generated Marketing

The conversations that consumers have with one another online -- in message boards, blogs, email listservs and product review sites -- represent the largest collection of word-of-mouth data that has ever existed. BuzzMetrics, a research and intelligence company, was created to mine these conversations and uncover market insight. We talked with Jonathan Carson, president and CEO of BuzzMetrics, to learn more about how marketers can leverage the word-of-mouth channel.

iMediaConnection: You're calling it word-of-mouth. We've been using the term consumer-generated publishing or marketing. Are we talking about the same thing -- blogs, discussion lists, and so on? What else is included in this category?

Carson: When we are talking about word-of-mouth, we are talking about the conversations and commentary that consumers create. It is the person-to-person spreading of ideas. Specifically, BuzzMetrics focuses on all of the online dialogue consumers engage in, including message boards, blogs, email lists, product review sites, chats, corporate gripe sites and personal home pages among other things. These are the traditional forms of content, but there are other very exciting types on the horizon. Huge numbers of individuals are posting photographs online, which is kind of an extension of the old Web cams. Social networking sites have added a whole new element of communication, and they introduce personal reputation systems and rankings on a global scale. These could have huge ramifications for marketers.

iMediaConnection: How is consumer-generated publishing affecting marketing efforts?

Carson: Already, this content is having a huge impact on certain vertical sectors, whether marketers are engaged in it or not. It has been well documented that the entertainment industry is largely driven by this chatter, and so online buzz campaigns have become a standard part of its marketing mix. Nobody doubts the power of this channel in the political world, either.

But we also see tremendous levels of shopping research occurring through these channels. Users read the recommendations that other users post to help them research their purchase decisions. Perhaps more exciting is the direct engagement that takes place as part of the shopping process, which we see all the time. For example, someone goes into a forum and asks for recommendations for a product purchase, and existing owners come out of the woodwork to endorse or slam the product. If you are trying to decide which $3,000 plasma TV to buy, who are you going to trust -- the 20-year-old sales clerk at Circuit City or an online super consumer whose passion in life is to track the high-end home-theatre market? These influencers are closing big deals every day.

One of our clients is a large brand of home durables, and they have just come to realize that, in aggregate, these online interactions are probably more powerful to their market than Consumer Reports magazine. This is an industry that has spent the last three decades building products to the specifications of the editors of one magazine. They didn’t care what consumers wanted. All that mattered was that they got their Consumer Reports recommendation. So for them to have that sort of realization is a huge breakthrough. And frankly, it’s a wonderful development for consumers. Why haven’t these companies been listening to what their customers want?

We also do a lot of work in healthcare, and there is no question word-of-mouth is revolutionizing that industry. Consumers are taking a far more active role in their treatment decisions, but they have a difficult time finding information. For example, their doctors don’t have time to explain anything to them because they rush them in and out of the office so quickly, and the drug companies aren’t allowed to interact with them because of FDA regulations. So they are going to online patient-support groups to talk with other folks who are going through the same things they are. This is an incredibly powerful concept. Manhattan Research just reported that over half of Americans with multiple sclerosis actively post to online patient-support groups -- that’s half of the market. And if half are posting, then it’s likely nearly the entire market is reading. This channel can make or break a drug or treatment.

iMediaConnection: Word-of-mouth has always been an important element of marketing/selling/branding. How does what's happening now differ from what went on before and why should marketers embrace it?

Carson: We spend a lot of time educating brand marketers on the fact that BuzzMetrics and online word-of-mouth is not an “Internet thing.” People have always had these conversations, but there was never a way to track them before. But the Internet has radically changed the paradigm in three ways.

First, it increases the impact of word-of-mouth recommendations. Ten years ago, an MS patient may have struggled to find other MS patients to communicate with. The Internet solves that problem by offering an infrastructure for people with similar interests to find one another. It’s not a coincidence that all of these reports are coming out showing that word-of-mouth is becoming more and more important to consumers; it's because the Internet has made word-of-mouth work better.

Second, the concept of the influential consumer has taken on a whole new level of importance. The consumer influencer used to have a network of a few friends and family, maybe a couple dozen. Now, any individual with an interesting perspective on any issue can become an influencer with minimal effort. Influencers don’t have to build a network, because people looking for advice on that topic will seek them out.

Third, and most important to marketers, word-of-mouth no longer dissipates as it often does when a traditional water-cooler or over-the-fence discussion ends. You can now study it. You can find the people driving it. You can participate in it. This is a revolutionary idea.

These three things coming together at once have created a “perfect storm” -- and that is why you are seeing so much attention being placed on word-of-mouth right now.

iMediaConnection: How can marketers take advantage of it?

Carson: Marketers can absolutely participate in this channel. They can influence the way people talk about them, they can impact their word of mouth or create buzz.

But this is a free space, so you can’t buy messages. It’s an open and self-policed space, so there is no one to complain to if someone says something mean about you. It’s a conversation space, so you have to be engaged in actual dialogue. This is a new concept for marketers; companies don’t typically put customer service in the marketing department. And it’s a space built on sharing, so you have to bring something of value to the table. If marketers are going to leverage this channel, they have to accept these cultural underpinnings and play by the rules. 

Monday: Why marketers can't ignore word-of-mouth, despite the challenges involved with tapping into it.