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Viral marketing has become the defining marketing trend of the decade. Brands big and small launch viral videos via YouTube, post new product information on their MySpace pages, court the blogosphere and send forth armies of evangelists to spread the gospel by word-of-mouth (WOM). But without customer identification and access to customer data, are viral marketers just blowing smoke?
In the 1995 Wayne Wang film Smoke , William Hurt's writer character tells a possibly apocryphal story about how legendary English explorer Sir Walter Raleigh once made a bet with Queen Elizabeth I that he could weigh the smoke from a cigar. Stop us if you have heard this one before.
First, Sir Walter placed an unsmoked cigar on a scale and weighed it. Then he lit up and smoked the cigar, carefully tapping the ashes into the scale pan. When he was finished, he placed the butt into the pan along with the ashes and weighed what was there. Then he subtracted that number from the original weight of the unsmoked cigar. The difference was the weight of the smoke.
Elizabethan bar bets aside, weighing smoke is problematic, if not an exercise in futility - and viral marketers face a similar problem in measuring the return on investment (ROI) of WOM. The buzz about viral and WOM has transformed marketing, as marketers eschew the hard work of building customer relationships through loyalty and database marketing in favor of distracting them with such shiny baubles as YouTube videos and interactive adver-games.
"We are really at the early stage of a big change," says Jim Nail, Chief Strategy and Marketing Officer at Watertown, Massachusetts-based Cymfony. "Companies are creating titles and even departments around word-of-mouth marketing. It's really beginning to take a grip."
Although WOM spending is difficult to track, the trend is clearly behind the record-setting increase in internet advertisement spending, with the Interactive Advertising Bureau reporting that companies spent $4.9 billion on the internet channel in the first quarter of 2007, up 26 percent from the same period last year. If you doubt that WOM is leading the virtual land rush, then note a recent Inc. magazine study, which found that 82 percent of the fastest-growing private companies use WOM techniques.
There is no doubt that...