“Half the money I spend on advertising is wasted; the trouble is I don’t know which half..”
John Wanamaker, advertising pioneer and famous merchant


We had the pleasure of hosting Andy Sernovitz, the founder of WOMMA and a Bazaarvoice Advisory Board member, at our office a few weeks ago. Andy gave a lunch presentation to our team, and something he said really struck me: “Advertising is the tax companies pay to sell poor products”. Google, Starbucks, and many other brave companies decided to buck the formula and invest in the product instead of “brand imagery” (i.e., advertising). Andy has countless examples, and wrote a fantastic book on the subject that has been endorsed by the likes of Seth Godin and Guy Kawasaki, two of my favorite authors.

And then I met with a large apparel company a week later that is afraid of reviews. Prospect: “We tell the consumer how they should think about our products”. Prospect: “A hip woman in NYC may be turned off by a woman in Topeka, Kansas writing a review on a trendy fashion”. I’ll save you my lengthy and impassioned response.

As I write this, I’m on my flight back from London after spending a week in our UK office, speaking at the e-consultancy conference and meeting with prospects, partners, and press. And tomorrow is the 4th, so I’m feeling kind of revolutionary. So, here is my take on how advertising will evolve.

First, I would modify Andy’s quote: “At its best, advertising is a reinforcement for positive word of mouth, and it reminds a customer to buy”. Think about it for a moment. Do you remember most ads? Of course not. We all selectively filter information based on relevance to us at that point in time. But if you are shopping for a new phone-PDA, like I was recently when my phone broke, you are likely to call an expert. In this case, I called Michael Osborne, who is a gadget nut (check out his Bazaarblog post on the iPhone). He recommended the BlackBerry 8800 for a number of reasons: 1. call quality, 2. ease of use, 3. sexiness, and 4. built-in GPS. The last one really mattered to me, as I have always wanted a GPS when walking around a large city like NYC or driving a rental car. I bought one four hours later, after doing a bit more research (like talking to the sales rep in the store). Michael’s recommendation meant more to me than any amount of advertising ever could. And I can already say that the BlackBerry 8800 is the best phone-PDA I have ever owned. Built-in GPS navigation is a break-through in mobile phone technology (it will leave you thinking “how did I live without this?”, just like when you bought your first mobile phone).

Now let’s introduce advertising into this. Let’s say I wanted a new digital camera, and I had a longer lead time to look for one. I speak with the experts in my network. I read reviews online (both expert and consumer). I receive a range of different opinions. For my price range, I center on a Canon ABC or Nikon XYZ for different reasons. The Nikon has a slightly faster shutter speed and a better construction, but the Canon has slightly better software and is easier to use with more accessories. If I have multiple weeks to make this decision, advertising can now play an important role:

1. It can introduce me to retailers that carry these products (although I am already aware of the better ones since I read reviews online).

2. It can reinforce the positives that I already learned about via word of mouth and remind me to buy.

The best advertising is that which does a great job of highlighting real benefits in a concise and entertaining way. How many advertisements have you watched for cars driving fast on twisty roads? [Yawn!] We all know that very few cars are actually known for that. A Porsche, yes. That is real. But the majority of this advertising is almost completely useless. At its worst, it’s fraudulent. In this age of overabundance of media, it insults our intelligence and makes us want to tune out. We don’t like being lied to and the truth is more accessible than it has ever been before, due to the Internet. The best advertising is that which listens to real word of mouth and highlights real benefits.

This is easier than it sounds, again due to the Internet. Here’s the three-step formula:

1. Find a product that has a high velocity of positive word of mouth. No need to advertise a product that no one cares about. You are fooling yourself if you think you can get consumers to start talking about a boring, or poor, product. Better to put that money into better product development or invest it in your stores than waste it. But a product that a lot of people are talking about – that’s the sweet-spot. Wii ads everywhere – and highlight the revolutionary controller, please.

2. Research what people are saying in reviews, blogs, forums, and social networks. Word of mouth is now digitally archived, globally accessible, and available at the speed of your fingertips. Learn what the real benefits are. There are probably only three key benefits that everyone is passionately agreeing on. Don’t waste your money on a focus group; that isn’t a real conversation. That’s old school – it honors the days when marketers had to guess at word of mouth (i.e., when it wasn’t digitally captured for analysis). Today, nothing is more real than tapping into a C2C conversation – where there is no reason to share anything but the truth. No agenda – just social connection, good karma, and a little ego. If you haven’t searched your brand on Technorati, try it now – it’s a start and it’s free.

3. Highlight these three authentic benefits in your advertising in an entertaining and concise way. Have you seen the recent Apple vs. PC ads (see above)? Pure brilliance. Entertaining, real, clever, memorable, and emotional.

Now, assuming you do a good job of placing the ad where potential buyers will see it, you will remind them of the positives they have already learned about and therefore increase the chance that they will buy it from you. That ad will drive the behavior that you are ultimately accountable for (i.e., sales).

Although this form of advertising is currently rare (i.e., most ads rarely highlight authentic benefits), I am convinced that this is how advertising will evolve. The Internet has made it mandatory. Everyone online now has near-immediate access to the real positives and negatives. It is becoming increasingly difficult to advertise to consumers in an inauthentic way because they are now hyper-educated. And as advertising evolves, advertisers and merchandisers will work more closely together (they have to) and we will tune back in.

Products will get better, too, but that is a subject for another time.

9 Responses to “How Advertising Will Evolve Using Word of Mouth”

  1. Very good points, James. And glad to have someone of your stature weighing in here. The main point of this article is that instead of spending money on focus groups, customer surveys, and other “tired” means of researching so that you can hit the mark in advertising effectiveness, you now have digital word of mouth to tune into and do so.

  2. Hi Bret – you make good points about bad products/services not worth advertising. Someone once said “Nothing will kill a bad product or service faster than good advertising.”

    But just as WOM has been around since the beginning of time, so has advertising (note: cave drawings) as well as “video did not kill the radio star”, no form of media every replaces another, they all morph based on changing consumer habits.

    If you really want to answer your question, start charting review activity against a brand health measure and determine if there is a correlation. My sense is the lines will trend the same.

    BTW – Google, Starbucks, etc… all advertise. Big misnomer. Not that I’m biased, but we can show the ad tracking data to prove it.

    Thanks for sharing the post.

  3. Brett Hurt

    David,

    I agree with your comments, and believe we will see advertising evolve in this way, to some extent. I have seen those same efforts by Ford, and applaud their efforts. At least they are paying attention and experimenting. The key is for advertising to evolve based on listening to the market. Hasn’t the end goal of advertising always been to sell the product? And isn’t the buyer ultimately wielding the most control as it is their wallet? Now that the market conversations are digitally archived and voluminous enough to not be affected by sample bias, there is simply no excuse for not paying attention.

    Best,
    Brett

  4. Brett Hurt

    David,

    I agree with your comments, and believe we will see advertising evolve in this way, to some extent. I have seen those same efforts by Ford, and applaud their efforts. At least they are paying attention and experimenting. The key is for advertising to evolve based on listening to the market. Hasn’t the end goal of advertising always been to sell the product? And isn’t the buyer ultimately wielding the most control as it is their wallet? Now that the market conversations are digitally archived and voluminous enough to not be affected by sample bias, there is simply no excuse for not paying attention.

    Best,
    Brett

  5. Great post, Brett. I’d like to see advertising take it a step further and incorporate more real people into the ads giving their testimonials instead of paid actors reading scripts; also one of the reasons CGM is so powerful and misunderstood by agencies. I’ve noticed a trend where various ads are referencing web sites and their users (notably Yahoo Autos in a Ford ad), however I still think advertising’s reputation scales down the credibility of the review. Quite frankly, it’s not quite the same on the mass market level as discovering the review yourself through organic search or exploration of a short list of trusted web sites.

    I do think advertising can benefit via a smart word of mouth campaign, however, because it can be used to reinforce a notion once a consumer has told another consumer about that product or service.

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