In this second of a four-part transcript, Buzz Marketing's Mark Hughes continues his explanation of Buzz Marketing.

This conversation took place as a breakout session at February's iMedia Brand Summit in Florida. Read part one, in which Mark Hughes, CEO of Buzz Marketing, describes the Buzz Marketing Model. Today he gives some statistics and examples.

Mark Hughes: Let’s say you don’t take me at face value. What are some statistics? Let’s look at statistics under the traditional model. Today 71 percent of people who are buying TiVo are buying it to skip commercials. It’s kind of a hot topic in the media, but guess what? Sixty-three percent of us are skipping those commercials anyway. We’re just doing it with our clickers. TiVo just makes it easier. Thirty-eight percent of us now have internet pop-up blockers. According to the American Academy of Advertising, only 8 percent of us pay full attention to TV ads. If you’re a marketer today and you think that people are watching your ads, think again.

Okay, the statistics on integrating buzz: Euro RSCG, part of the fifth largest advertising conglomerate in the world, did a study, and they found that word-of-mouth marketing was 10 times more powerful than TV or print. The statistics are there. Integrated marketing works. Millward Brown performed a study and of those brands that are spending less than 50 percent of their marketing dollars on TV, they found on an apples-to-apples basis, cost-per-awareness point, they got 76 percent more bang for the buck.

Another recent phenomenon, word-of-mouth translates to the internet. Word-of-mouth conversations used to be captured in a vacuum. It was a one-time-only scenario where I had a conversation with you and that was it. No one else heard. But now, those conversations take place online in the form of message boards, in the form of postings, in the form of chat rooms. And the Harvard Business School just performed a study that found a correlation between word-of-mouth postings online and Nielsen TV ratings of programming. About one-third of Nielsen ratings are attributed to word-of-mouth conversations online. Harvard Business School, Euro RSCG -- the stats are there. Face-to-face will blow away a TV ad by a factor of 10-to-one every single day. Car companies are flocking to it.

Cadillac rented the El Toro Air Force Base in California. They had 400 Cadillacs. People were careening around a make-shift track. And this blew away any TV ad that Cadillac could do -- in person, face-to-face. Why? Because you have undivided attention. Ninety-two percent of us don’t watch a TV ad.

The reason why I’m here today, basically, is to offer to you what works and what doesn’t. Let’s talk about one case study involving text messaging. Let’s say you’re AT&T Wireless. We’ll go back to 2002. And your charge as CEO, Chief Marketing Officer, et cetera is to get more people to text message. You've got a good service, a good product. It’s crazy in Europe. People are text messaging out the waazoo. How about in the U.S.? Okay, so … let’s get a campaign; let’s get our ad agency involved. Pretty simple, right? Make an ad; send some message out; people start text messaging, right? Well, welcome to M Life. Anyone remember the ad campaign? It was probably the worst ad campaign in the history of marketing. They spent $120,000,000 on ads that annoyed me and ads that annoyed you. They kept on spending money. Nothing happened. Nothing happened. They followed the traditional model. So then what happened is they said, "Tell you what, let’s scrap M Life; that campaign really blew. Let’s do a Super Bowl ad and see what happens." They created a new ad. They put it up on Super Bowl of January 2003. It was not a bad ad, but $2,000,000 later nothing happened. Nothing happened. 

And then someone had a great idea. They said, "Let’s integrate some buzz into this, and let’s not even make it a commercial." Not make it a commercial? That’s not traditional. Someone said, "Let’s think like consumers." So in the second season of "American Idol," what happened is the show allowed people to send in their votes via AT&T Wireless text messaging. Now AT&T wouldn’t actually give me their data on this, so I looked at Verizon’s data, a competitor’s data. And what happened is in 2003, things changed. And this is just from a competitor. What happened is "American Idol" and AT&T Wireless exploded the entire category in America. So even for Verizon, they're up 162 percent. In one year, from 2003 to 2004, the text message volume in the entire category went from 11,000,000 and tripled to 30,000,000 text messages. It was not done in a traditional way.

So let me ask you a question. A lot of us here are marketers. Give me a show of hands if anyone thinks they’ve got enough marketing dollars. Wow, no one has enough marketing dollars.

Let me ask you a question: If your boss walked into your office and said, "Tell you what, I’m going to double your marketing budget. Would that be something you would like?" Yeah, okay. Show of hands? Anyone want a double marketing budget? Yeah? Yeah? All right. Well, how about if your boss walked in your office and said, "Tell you what, I’m going to increase your marketing budget by sixfold, not double." That might be of interest to you. 

Let’s take a look [shows a video]. What’s going on here? This is a little campaign I did while I was at Half.com. I was working late at night, probably, like you were last week, eating Chinese food, opening up a fortune cookie and thinking to myself, you know, the biggest problem in advertising and marketing today is to get people to pay attention to your ad, and then, get people talking about your ad or talking about your marketing -- that’s what we want. So I was reading this fortune and I said, everyone reads fortunes. And then the light bulb went off. Two months later I struck a deal with the largest fortune cookie manufacturer of the United States. And I was reaching 22,000,000 people a month, with an ad on the back of a fortune. Consider it the world’s tiniest billboard in America. So we had internet tracking. We offered a coupon code. Save a fortune at Half.com. Books, CDs, DVDs and more blah-blah-blah. Here’s the code “fortune 77.” We track everything. That’s what we’re about, we track things. 

Here’s the data, in terms of responses. All of the sudden, something happens. Any guesses? It jumps. It leaps. It doesn’t gradually go up. It jumps by sixfold -- sixfold. What happens -- and let me remind you, Buzz Marketing is about capturing the attention of consumers and the media to the point where it’s entertaining, fascinating and newsworthy. The media picked up the news story. And all of the sudden, response increased sixfold. We didn’t increase our ad spend sixfold. It was the same media buy out there. It was the same stuff out there. 

What this demonstrates is what still holds true from David Ogilvy’s research 40 years ago. David Ogilvy’s research 40 years ago showed that on average, people read newspapers and magazines six times more than they read the ads in those newspapers and magazines. Anyone subscribe to a magazine here? Can you remember an article you read in the magazine? Can you remember an ad from the magazine? No. Anyone subscribe to magazines because of the ads? No. What we know is that people are reading content. They’re not looking for ads -- the tug-of-war for attention.

I think my time is up. But if I can leave you with three takeaways:

Be unusual. People talk about the unusual. You know, fortune cookie ads in a media campaign is kind of a tough sell, I know, but you know, not too many people are talking about traditional advertising. One of my clients works for Reckitt Benckiser, I was in a room very similar to this. I asked him, "Let me ask you a question. Your ad for Lysol in Good Housekeeping, how many of your neighbors came up to you and said, "Oh, my gosh, that was an amazing ad in Good Housekeeping Magazine? None?" So what the company did, slightly nontraditional, is they sponsored, if you will, the restrooms on the New Jersey turnpike -- “This restroom has been cleaned by Lysol.” And I asked him, I said, "How many of your neighbors came up to you and said, 'Hey, I saw your Lysol brand sponsoring the restrooms on the Jersey turnpike?'" I said, "That’s buzz at work." Be unusual.  

Second thing, be less corporate. People do not trust corporations these days as much as they used to. People trust people, and if you can make your advertising and marketing look more personal, do it.

I’ve got a case study in my book where someone had a $7.00 marketing budget. You can read about it later, but look personal, do not look corporate, that was the basis for the $7.00 marketing budget.

Give people something to talk about. Give them a ready-made story to talk about. And notice that word “give.” It’s not about taking anymore. It’s not about taking their attention. It’s about giving them something that they can talk about and then they can spread the word about that brand, or about that campaign. And all of the sudden you become the giver of buzz currency; you become the person in the know; giving, not taking.

So here’s my shameless plug: The book [Buzz Marketing] comes out July 7th.

Tomorrow: Maria Mandel, Partner, Director of Digital Innovation, Ogilvy Interactive provides examples of integrated direct marketing.