Blogs, networking sites have people talking about new products

By SINCLAIR STEWART

TORONTO GLOBE AND MAIL

NEW YORK — When Procter & Gamble Co. introduced a new cleaning product, Dawn Direct Foam, its ads remained faithful to one of the dishwashing industry’s abiding tenets: Trumpet some kind of technological innovation or soapy alchemy that represents a breakthrough in the War on Grease.

Behind the scenes, however, the packaged goods giant experimented with something a little more radical. The company crafted a message that the new foam would help make dishwashing more fun for kids, and promptly delivered the pitch, along with some coupons and talking points, to its 450,000 mom “connectors” — an army of brand evangelists, called Vocalpoint, that P&G uses to incite discussions about its products.

The moms held up their end of the bargain, increasing sales of Dawn by 50 percent in the test markets, and in the process, making it one of the most successful efforts in a nascent but quickly evolving sector of the marketing business: word-of-mouth advertising.

Word of mouth, sometimes referred to as buzz marketing or viral marketing, was the fastest-growing slice of the $254 billion marketing industry last year, and is expected to account for more than $1 billion of ad spending in 2007, according to a report by PQ Media of Stamford, Conn., an alternative media researcher. That number is forecast to reach $3.7 billion by 2011, fuelled in part by the eruption of blogs and the increasing popularity of social networking sites such as Facebook.

Word of mouth, paradoxically, is one of the oldest forms of advertising. As long as there have been brands, people have talked about them, both positively and negatively. No industry understands this better than Hollywood, which is largely at the mercy of word of mouth once a movie is released at the box office.

Yet it is only in the past few years that a diverse range of marketers, from drug companies like Glaxo Smith Kline to clothing manufacturers like Lee Jeans, have begun to make it a regular staple of their brand strategies. For one thing, it is relatively cheap. More important, it is trusted.

“It totally outweighs all the other forms of advertising and marketing direct in terms of trust,” said Leo Kivijarv, vice-president of research for PQ Media.

A recent survey by A.C. Nielsen found that 78 percent of respondents viewed recommendations from other consumers as trustworthy. That compares with just 63 percent for newspaper ads, the second most trusted medium, and well above the 18 percent for text ads on mobile phones.

Trust, however, can be a double-edge sword. Nothing can kill a brand faster than bad word of mouth, precisely because feedback from other consumers is viewed more credibly than a conventional piece of advertising.

“It’s overhyped,” insisted Jack Trout, president of marketing and research firm Trout & Partners in Greenwich, Conn. “Word of mouth has always been Nirvana — obviously, having a third party say you’re terrific is better than saying you’re terrific yourself ... but my sense is that it’s still a work in progress.”

Trout furnished a pair of recent high-profile flops to illustrate his skepticism. One was Pontiac’s decision to give away its new G6 model on Oprah, an effort that generated significant awareness, but “didn’t sell a damn thing.” The other was “Snakes on a Plane,” the Samuel L. Jackson thriller that relied on an ambitious online word-of-mouth campaign but bombed at the box office.

“Everybody wanted to talk about it, but no one went to the movie,” Trout said. “Think about it — what a terrible title.”