Online Word of Mouth Drives Buying Decisions
Internet Marketing Helps Generate Sales
© Kaili Xu
Jun 4, 2009
The loss of consumers' trust and use of traditional media has prompted market researchers to ask themselves where consumers go for information about brands, products and services.
The answer is word of mouth generated from consumers – shared on the Internet.
“Audiences are filtering out more traditional ways of how companies communicate with them, such as advertising, press releases, and other more ‘one-way’ avenues, and the return on investment for these is decreasing,” said Walter Carl, the founder of ChatThreads, a Marblehead, Mass.-based word of mouth research company.
Carl said word of mouth marketing is important for brands today because consumers trust companies less and Internet amplifies consumer voices.
People may be skeptical of an advertisement, but they are less skeptical if a product is endorsed by a friend, said Joe Pilotta, VP Research of BIGresearch, a Worthington, Ohio.-based market intelligence firm.
Internet Supplants Traditional Media
Consumers have a natural instinct to tell others about products they have purchased and services they have used. They usually discuss their likes and dislikes online more freely than in person.
Emails enable consumers to share their purchase experiences more widely through the use of “reply to all” and “forward” buttons, address books and distribution lists. The rise of blogs, forums, consumer ratings Web sites and individual Web sites has also supercharged abilities to pass the personal experiences. Everyday, there are millions of conversations being posted by American consumers.
Recommendations, reviews, ratings, and even horror stories are chronicled via online channels, and their effects give customers a louder and more influential voice than ever before.
Thanks to the Internet, word of mouth is not one to one anymore. It becomes one to more, said David Godes, a member of Word of Mouth Marketing Association’s Advisory Board, in a phone interview.
Online Word of Mouth Tells Problems
The Internet conversations can also serve as early indicators of larger problems. A company can learn what consumers are saying about its competitors and track changes in the marketplace. Consumers’ postings can help executives judge if the company is doing things right or wrong, experts said.
The data itself tells the research what is compelling and interesting, said Joshua Sinel, Founder and CEO of Kaava, a White Plains, N.Y.-based word of mouth research company.
Pilotta also said word of mouth not only reflects consumers’ ideas, opinions and experiences about brands, products and services, it is also “much cheaper.”
Internet Users Worry About Privacy Issues
Kiki Zhao, a graduate student at Boston University writes her blog to share experiences and feelings with friends, but someone may be “watching” her blog everyday for commercial use.
Buzzlogic, a San Francisco company empowering marketers to grow their businesses through influential social media, tracks conversations about certain topics from millions of blogs, social networks, other social media, corporate sites, and about 8,000 mainstream media sites.
“Social media is a huge opportunity in that it represents a new way for marketers to connect with consumers in a highly engaged way,” said Valerie Combs, director of public relations at Buzzlogic. “Blog readers represent one of the most highly engaged audiences on the Web, and blogs have fast become one of the most popular ways to find and share information online.”
Some bloggers have privacy concerns because there are research companies which trawl blogs without informing them. But Sinel said that his company strips out and discard any and all Personally Identifiable Information, and do not re-publish or distribute studies outside of its commissioning client.
“The social networks and communities that we utilize for our research projects are open communities, typically with no registration required in order to read posts,” said Sinel in a follow-up email interview. “It should be understood by most participants that the comments they publish to these open communities are able to be read by virtually anyone who wants to.”
The information in this article was derived from a series of interviews conducted by Kaili Xu.
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