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SECOND-WAVE OF ADVERTISERS READY TO ADOPT
WORD-OF-MOUTH MARKETING

Online word-of-mouth strategies appear to be viewed as highly effective

Charlottesville, VA – (May 11, 2006) – BoldMouth, a word-of-mouth marketing agency, today released a new study on Word-of-Mouth Marketing with Osterman Research titled – Perceptions, Practices and Ethics in Word-of-Mouth Marketing. The study can be downloaded directly from the BoldMouth.com site.

“The goal of the study is to provide organizations interested in, or even intimidated by, word-of-mouth campaigns with data and guidance designed to help them integrate this exciting strategy into their marketing and media plans,” noted BoldMouth CEO Todd Tweedy.

Until now, the bulk of published research on WOM has been piecemeal, or appeared as a small section of a more general survey, or was conducted too long ago to still be useful. Given the rapid changes in the marketplace, not to mention recent industry buzz around artificially engineered viral marketing (e.g., incentivized agents) organizations needed a comprehensive view of this emerging industry.

Nevertheless, a cursory review of the data from BoldMouth’s study, Perceptions, Practices & Ethics in Word-of-Mouth Marketing uncovers some interesting findings:

• A second wave of organizations appear to be waiting on the sidelines, preparing for the right moment to launch WOM efforts: 34.7% of study participants stated that they plan to use WOM marketing, which could expand the industry to the realm of more than one billion dollars in activity.

• Nearly 90% (89.9%) of all study participants noted that WOM was ethical.

• Based on campaign examples provided by 24.6% of survey participants it appears as if organizations have a “devotion to promotion” bias when it comes to WOM.

• 51.2% of organizations are unable to track performance and 20.9% of organizations lack in-house talent to properly manage WOM campaigns.

• 65% of respondents noting they don’t have a WOM plan or are in the process of creating one, it’s likely that their organizations may have been relegating WOM to only support tactical marketing duties.

• Nearly 64% of all survey respondents noted that WOM is either “very important” or “extremely important” to their overall marketing plans.

• Close to 60% of all respondents noted that they never use outside experts. This reliance on in-house talent can lead to confusion over campaign success metrics and contribute to future barriers to secure adequate campaign budgets.

• Face-to-face communications received the highest WOM effectiveness rating (86% or “extremely effective”), however, when online WOM marketing strategies are combined, this aggregated category of responses under the heading of Online WOM Marketing Strategies suggest as high, if not a higher, cumulative effectiveness rating than face-to-face communications.

Tweedy noted that, “The lack of more widespread attention to planning implies that a systematic approach to WOM marketing does not exist. Perhaps the greatest risk to not having a WOM plan in place is how organizations will deal with the likelihood of negative word-of-mouth. Based on study data, we believe the percentage of organizations that note “criticism from customers about campaigns” (7%) as a problem is likely to increase over the next twelve months as more organizations experiment with WOM.”

Additional insight from the study revealed:

• A wide-scale belief across organizations that buzz from a WOM campaign happens quickly (44.9%) and campaigns are most effective if the buzz is created quickly (48.7%). Managing expectations is likely to be a major hurdle for marketing professionals when 45.4% of respondents anticipated seeing results within a few weeks or less.

• Organizations appear to have no misconceptions about what can trigger WOM: Excellent customer service (82.2%) and/or satisfied customers (53.3%). Survey data support the conclusion that most marketers grasp as the chief principle behind successful WOM marketing: namely, that satisfied customers or advocates represent their most important source of referrals.

Osterman Research, a leading analyst firm in the messaging and collaboration space, collected data for this survey. Osterman Research employed a web-based survey interface that fully automated data collection. Osterman Research also made revisions to response types and finalized the order of questions to remove potential bias.

The study can be downloaded directly from the BoldMouth.com site via this link.

About BoldMouth.com

BoldMouth.com – http://www.boldmouth.com – partners with organizations and brand marketers to develop cost-effective word-of-mouth marketing models that leverage real-time communications and database-driven information delivery to enhance customer acquisition, retention, and mobilization initiatives. BoldMouth was founded in 2005 by veteran online marketer Todd Tweedy.

About Osterman Research

Osterman Research – http://www.ostermanresearch.com – as founded by Michael Osterman in 2001. Since that time, the company has become one of the leading analyst firms in the messaging and collaboration space, providing research, analysis, white papers and other services to companies like Microsoft, America Online, Sun Microsystems, Yahoo!, Network Appliance, Iron Mountain, Postini, Hewlett Packard and many others. The core of Osterman Research’s capabilities is its market research panel of IT professionals and end users that are regularly surveyed on a variety of topics related to email, instant messaging, spam, collaboration, security, storage, archiving, data retention, compliance and other areas. This continually updated knowledge base of information from decision makers and influencers helps Osterman Research to understand developments and gain insight into the trends that affect its clients.

TAGS: WOM, word of mouth marketing, word of mouth research, word of mouth, BoldMouth, Osterman Research, Todd Tweedy