The first, “The Buzz Starts Here: Finding the First Mouth for Word-of-Mouth Marketing,” tackles the issue of determining how to find the ‘right’ individuals to deliver a company’s word-of-mouth message – any word-of-mouth message (hopefully) spreads somewhere, so from whom should it spread? Probably not that big of a deal, concludes Knowledge@Wharton:
The study indicates that the spread of a product by word-of-mouth — what the authors call “contagion” — can and does happen over social networks. The study also indicates that marketers may need to re-think whom they identify as the best seeding points in their word-of-mouth campaigns.
Traditionally, drug companies have focused their efforts on reaching notable community leaders, believing well-known experts to be the most effective emissaries of a new product. In other industries, said Iyengar, marketers and their market research companies have tried to find opinion leaders through direct surveys, asking people, in essence, “Are you an opinion leader?” and then linking those answers to observable characteristics such as age, income, education level, media habits and so on. That, however, has proved rather ineffective, leading some companies to give up on finding seeding points and go for flashy “buzz” campaigns everyone talks about, such as when British fashion retailer French Connection UK put its four-letter acronym in large letters on its bags and shopping windows.
Both of those approaches differ from those used by sociologists and network researchers, who focus on how people interconnect. For example, to identify the most influential leader in a medical community, a sociologist would ask, “Whom do you turn to for advice for treating this kind of ailment?” The different approaches can produce widely different results, the study found.
Giving away the product has become a legitimate business model on the Internet and even beyond. And it’s been getting increased attention. Author Chris Anderson will publish a new book in July titled, Free: The Past and Future of a Radical Price. It’s a follow-up to his Wired magazine cover story last year, “Free! Why $0.00 is the Future of Business.” Anderson, the editor of Wired and a former Economist reporter, also wrote the 2006 book, The Long Tail, in which he observed how companies such as Amazon.com and Netflix were thriving by offering gigantic catalogs of products that each sell in small quantities. Today, those companies are among the few thriving through a recession.
Anderson isn’t alone in exploring what has been dubbed “freeconomics.” Venture capitalist Fred Wilson of Union Square Ventures popularized the term “freemium” to describe an emergent business model — popular among online service and software companies — of acquiring users en masse with a free offering but charging for an enhanced version in hopes of subsidizing the free usage.