Talk it up

It’s one of the most powerful forms of advertising. It’s been around forever.

And now, it’s online.

Word-of-mouth advertising—consumers talking freely to other consumers—has always been a boon for the purveyor of a good product or deal and a bane to those with a problem on their hands. And consumers have always talked among themselves about brands and products. But the effects of those conversations have been limited: if a consumer had a complaint about a product or service, it might escalate as far as a letter-writing campaign.

The Internet’s changed that. Now, any consumer with an axe to grind and a mouse at hand can put his complaint in front of hundreds, thousands or more, in blogs, review features and sites, complaint sites and social networking sites. Conversely, if delighted by the product or brand, the consumer can turn to the same outlets to sing your praises.

The good and the bad

That’s how it works at Petco.com. The web site of Petco Animal Supplies Inc. had been looking for a way to cost-effectively leverage what it already knew was its customers’ strong desire to connect with others on the topic of their pets. “For our target customer, this is their child,” says vice president of e-commerce John Lazarchic.

The solution came from outsourced service provider BazaarVoice Inc., which since October has been hosting an application that gathers and posts consumers’ product reviews and ratings on Petco.com—both pro and con. Lazarchic understands that showing both sides is part of the deal. “We always knew that for the program to have any validity, we’d have to be willing to put up negative reviews,” he says.

Like it or not, the phenomenon of consumer-generated online media is turning on its ear the notion that enough of the right kind of advertising can control brand perception. “The acronym I use with brand marketers now is URUE,” says Andy Sernovitz, CEO of the Word of Mouth Marketing Association. “You Are the User Experience. You’re not what your ads say you are, you’re not what the brand says it is.” For example, he says, a cable provider such as Comcast might spend big on advertising about how ‘Comcastic’ it is, but if the personal experience of a user of the service is poor, the reality of that experience is the brand impression that user conveys to friends. “You can’t out-advertise that,” says Sernovitz.

The web’s made the consumer’s voice a highly visible part of the marketing mix and a significant consideration in brand management in some quarters, and more marketers are now watching and in some cases finding ways to participate in consumer media such as blogs, rating and review sites, and social networking sites. In 2004, a Jupiter Research survey found that 34% of marketers polled already had tried some form of viral marketing program in the previous year. More recently, eMarketer estimated that almost half of all online marketers engaged in some form of word-of-mouth or viral campaign in 2005. This year, it predicts, a majority of online marketers will conduct such efforts.

Making the commitment

But participation requires a commitment to an open and honest dialog with customers in the very public forum of the Internet. That’s a twist on 100 or more years of marketing practice in which marketers have been unwilling to put any resources behind messaging they did not originate and control.

“Brands are moving away from a position of holding a megaphone to holding a microphone,” says Joe Crump, executive creative director of interactive agency Avenue A/Razorfish’s Eastern region. Crump adds the trend is most relevant for two types of brands. One is brands that are essentially, digital: a pure play such as Amazon would be one example. The other is what he calls “analog” brands—Procter & Gamble, for instance—that may or may not have a direct digital channel, but that definitely have in their audience base a lot of heavy users of digital media.

“With different types of clients, we have different conversations about the relevance of social media,” says Crump. Relevance is a starting point for such discussions, and the requirements of execution are a consideration as well. Staffing levels and in some cases, in-house or third-party technology and services are needed to monitor, facilitate or publish the consumer voice. And unlike what online marketers have become so accustomed to in a cost-per-click environment, ROI is less directly measurable.

Retailers such as Lazarchic are willing to live with that. “Web sites are becoming so interchangeable and people are so easily able to jump between them,” he says. “So you have to look at what you are going to do to make yourself different. It may not be that what you do, whether it’s product reviews or different types of content, contributes directly to the sale, but it contributes to your differentiation from your competitors and causes customers to come back to you when they are ready to shop. There’s value in that.”

That’s a branding perspective, but the ratings and review tool at Petco has managed to deliver on some hard metrics as well, when those reviews were leveraged in an outbound e-mail campaign that targeted customers by pet type. Petco chose six top-rated products in each pet type and included snippets of favorable reviews on the product as part of the e-mail message. E-mail recipients could click-through on the message to read the rest of the featured reviews, as well as other reviews of the product. The click-through rate on the e-mail messages that contained product reviews was 200% higher than those in the campaign that did not.

Avoiding the liability

Petco.com had looked for ways to leverage the affinity of pet-lovers, and in fact, had hosted a community message board on its site from 1999 to 2001. When the staffing needed to maintain the feature and review comments before posting proved too expensive, Petco took the board down. BazaarVoice’s outsourced solution solves that problem, according to Lazarchic. BazaarVoice reads the reviews and flags Petco on any trends—and any it does not post. Reviews don’t get posted if they raise potential liabilities for Petco or its vendors, or if they require more information than supplied by the poster to provide an accurate assessment.

Under those rules, a customer product review stating that a dog food brand made the customer’s dog ill, for example, would be rejected for posting, given that the illness could be the result of other circumstances. In that case, the review would be passed along to customer service for a follow-up with that consumer, to Petco’s buyers and to the product’s manufacturer. But how about a review stating that a dog didn’t like a purchased toy? “That’s okay,” says Lazarchic. “I like some books, but not others. It’s an opinion.”

Consumer comments and reviews have another utility, as outdoor adventure outfitter MountainGear.com found after it launched customer reviews from ASP provider PowerReviews last November. Customer feedback can narrow the gap between consumers’ expectation and their experience if it’s used to adjust product descriptions on the site. According to Whitney Parsons, MountainGear’s Internet marketing manager, PowerReviews moderates reviews submitted for posting on the site for language considerations such as profanity and to ensure that the review is product-focused: if it meets those criteria, it’s posted.

“If something didn’t meet your expectations, we are going to share that so everyone else can form their own conclusions about it,” says Parsons. So when a customer gave a product a two-star rating out of a possible five, MountainGear dug further into the review to find out why. The poster’s negative comment about the product, a pair of hiking boots, was that the weight as listed on the site was actually a pound heavier—a significant amount of weight for a hiker. A check by MountainGear determined that the poster was correct, prompting a change in the product copy. “That let us provide the correct weight for everyone,” Parsons says.

Turning up the microphone

Parsons says she’s also seen benefit from a program element in which customers who buy a product are invited to supply a review of it a few weeks after purchase. “We have seen a lift in the number of repeat orders just through that e-mail contact,” she says. But the program’s biggest plus may be in magnifying the positive effects of hearing from one satisfied customer by sharing those comments with other customers. “It has been amazing to see how happy consumers are with the products,” says Parsons. “It’s a great thing to have.”

Petco’s and MountainGear’s choices about how to turn up the microphone on customer opinion on their sites represent one approach to the issue that keeps some marketers on the sidelines regarding the use of consumer-generated media. That’s the fear that unedited, such an exchange might backfire on the site and the brand. In both cases, consumer posts are moderated, and depending on the circumstances, some reviews aren’t posted.

Both programs strive to balance a marketer’s desire for control of messaging with the need to keep what’s expressed by consumers authentic. “The average consumer today can recognize corporatespeak and PR spin,” says Derek Gordon, vice president of marketing at Technorati Inc., a search engine for blog content. “So this takes bravery on the part of the brand because they have to accept that if they enter the conversation, they are not always going to hear what they want to hear. They can’t control the total outcome of the discussion.”

Sites that want to exercise more control in presenting the consumer voice or engaging with it in an Internet forum have other options. Canadian-based technology provider Genuosity Inc.’s hosted service, KudosWorks, captures and posts customer testimonials, not reviews, on marketer clients’ sites. Marketers using KudosWorks get access to two links from the technology provider: a link to a KudosBoard seal they can post on their site and a link to a testimonial capture page their site can present to customers.

Customers who’ve purchased an item from a retailer that uses KudosWorks get an e-mail a few weeks after purchase seeking feedback on the product and inviting customers satisfied with the experience to write a testimonial. Interested customers are directed to the KudosBoard icon back on the retailer’s site. A click there pops up the testimonial capture page, which explains how to enter a testimonial in text, video, or audio form. Customers who enter a testimonial and send it to a designated number of friends are entered into a rewards contest.

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Accentuate the positive

“A lot of people in word-of-mouth marketing feel all you should care about is having somebody out there talking about you,” says Genuosity CEO Herbert Ong. “We focus specifically on the positive. So we capture testimonials. If you sell fishing poles, and just sold one to somebody, it’s logical to ask them to share that with their friends. Because their friends are going to be your target market.” Ong says that KudosWorks maintains an authentic voice with a program design that motivates referrals of existing testimonials, but does not motivate consumers to create testimonials in the first place.

Graham Morfitt, vice president of marketing at outfitter ModernOutpost.com, says that using the consumer’s voice to talk about products is “infinitely better” than other, conventional mass media approaches the small retailer has tried in the past. But he’s more comfortable with capturing and presenting testimonials via KudosWorks than with some other consumer voice vehicles. “You are creating a positive image for yourself, and you have a lot more control than you do on a blog or forum,” says Morfitt, who adds KudosWorks has been up on ModernOutpost since last year.

Recently, ModernOutpost selected 100 customers who’d purchased from the site and who also had phone or other communication with the company and invited them to submit a testimonial if they were satisfied with the product. “Just through that e-mail follow-up, we received about 20% back, and we were able to choose the ones we wanted to display,” he says. “KudosWorks has built in a lot of controls on what we display, who we display, and how we ask people. As a marketing tool, this is the closest thing I have seen to being able to control word of mouth.”

At the other end of the spectrum are blogs, where marketers exercise no control over what’s posted about them by other parties, and also risk taking lumps close to home if they host a blog on their own site. Consumers have a particular sensitivity to what’s authentic—or not—on a company blog, and if they take issue with what’s presented by the company there, they’ll respond either right on the spot, if it’s a blog that accepts outside posts, or in forums elsewhere in the blogosphere.

Dealing with the truth

The potential upside of blogging is that positive buzz in the blogosphere can boost both brand presence and search engine rankings. And properly handled, company blogging may deepen trust between the company and its audience. Microsoft, for example, had hoped to release its new operating system prior to the holiday season but wasn’t able to do so, to the disappointment of its partners that sell computers. “They distributed the news through their blog as well as other places, but they talked honestly about it, about how much code is involved, and how hard it is to update it,” says Technorati’s Gordon. “No one loved it, but it was the truth. People are better able to deal with the truth than not.”

But what works for Microsoft won’t necessarily work as well for every brand marketer or every retailer, and it would be a mistake to assume they all need to start blogging, industry experts say. “Any brand that misbehaves, is going to be subject to retaliation now, particularly if they have a lot of digital consumers,” says Crump. “If Crest, for example, doesn’t do what Crest is supposed to do, there are 100 blogs where that is going to get out. That doesn’t mean Crest should have a blog. It just means Crest should do the best it can to deliver on the promise of its brand.”

It also means that whether or not brands, marketers and retailers themselves decide to blog or pursue any other vehicles to capture and present the consumer voice, they should use the methods now available to them to understand consumer opinion as it emerges in these new online outlets. The blog-tracking Technorati presents one such opportunity; Nielsen BuzzMetrics, a service that searches the web on behalf of marketer clients for consumer recommendations, opinions and comments, is another. Interactive agencies wrap professional services around their use of such monitoring tools for their clients. For DIYers, blog search tools available at Google offer another means of getting at what consumers are saying to other consumers about a brand, retailer or product.

Looking to each other

As online shopping and marketing goes mainstream, the web presents an enormous number of choices for consumers. “People are overwhelmed with marketing messages so they look to each other for guidance and turn to each other in blogs, in places such as Epinions and BizRate, and increasingly, on web sites,” says Brett Hurt, CEO of BazaarVoice.

The consumer voice on the web supplies what some say is missing from the online shopping experience: the input and influence of other shoppers in the store. So the online consumer buzz around brands and products is in a way, nothing new, but simply another venue for the people-to-people exchange that has existed since the dawn of retail and will go on for as long as people shop—whether merchants are listening or not.

“I think the marketer today has a choice,” says Andy Chen, CEO of PowerReviews. “You can either ignore it and close your ears—or you can actively engage.” l

mary@verticalwebmedia.com

All the places marketers need to keep an eye on

“Consumers have a range of tools at their disposal today that allow them to let their voice be heard through consumer-generated media,” says Dana VanDen Huevel, director of new business development at Pheedo, an online advertising platform that delivers contextually relevant ads along with subscribed content such as blogs to consumers’ RSS readers. Among the tools he notes:

• Blogs: Customers that write blogs can be evangelists, vigilantes or both. Whatever side of the fence they’re on, it pays to get to know them and read their blogs.

• RSS: Subscriptions to the blogs and web sites of sources that consumers trust give them a constant flow of information on products, services and experiences from across the web.

• Opinion and review sites: Statements about marketers’ products and services are scattered throughout the web. Places like Amazon.com, complaints.com and epinions.com have thousands of customer reviews that are worth mining for insight.

• eBay: Some companies are using eBay as a pricing research tool because the potential consumer data is immense, especially for second-hand and grey-market products.

• Testimonial sites: Web sites and services like KudosWorks are making it easy for customers to offer testimonials on a brand’s or retailer’s products, and those of their competitors.

• Newsgroups: While blogs get most of the attention these days, newsgroups and USENET are still alive and well. Searching groups.google.com can yield insights from engaged customers.

• Flickr and BuzzNet: Online photo sharing sites where customers take pictures of the products they use in their daily lives can yield a treasure trove of data that would never be found in a focus group

• Tagging: The words consumers use to describe or refer to a product or brand may be different from the words used by the brand or product manufacturer itself. Using sites such as Technorati.com to search on a product’s associated keywords can unearth blog posts and photos that customers have tagged in this way.