Given this reality, many companies have started to redefine key aspects
of their marketing mix to include social media, adjusting their budgets.
79 percent of the top 100 Fortune companies already use Twitter,
Facebook, YouTube or corporate blogs to communicate with their
customers. 2/3 have at least one account on Twitter, which is the
platform most used by companies and 54 percent have a Facebook.
active SM presence is
as a means of
THIS IS A MISTAKE!!!!!
Social media obey very different
rules from traditional advertising. A
company can use social media to
start conversations or build brand
recognition, but the results are
much more difficult to predict or
Advertising in conventional media has high and potentially massive
reach, while traditional WOM based on one-to-one communication is
limited by nature.
However, the rise of SM is radically transforming the pattern of social
interactions, including personal recommendations. Now, hundreds of
thousands of people can conspire to put a company’s reputation,
brand or product on a pedestal or drag it through the dirt.
Not even the best advertisement can match a personal
recommendation in credibility. WOM is almost unbeatable in its power to
influence and persuade.
Obviously, an anonymous advertising message does not have the same
credibility as a recommendation from someone we know and trust. 38
percent of SMM users pointed to other consumers as the most reliable
source of information about a brand or product. The next most popular
option, 32 percent of respondents, was the brand itself.
In conventional advertising, advertisers always have full control over the
message they want to convey. WOM is different in that it cannot be
e-WOM has one major advantage over advertising: It is immediate and
interactive, and that makes it easier to intervene. If a campaign goes
off the rails, you can adjust it as you go along. You can try to deflect
negative feedback by joining in the conversations or making amends.
From a consumer’s point of view, a fundamental advantage of WOM
over advertising is that it is voluntary and consensual, whereas
advertising can be annoying and intrusive. There is always the risk of
saturation or causing a nuisance if the messages sent through social
networks are not carefully measured.
In a cost comparison, we might expect WOM to win hands down over
advertising. But it’s not that simple. Traditional WOM may be relatively
inexpensive, but if a company wants to use social networks to get
people talking about a brand or product, it will have to put up the
The fact that most
platforms are free
does not mean that
strategy will be free.
In fact, e-WOM
requires a sustained
commitment of time
Advertising has shown that it can increase the value of a brand by
enhancing the brand’s image, reputation and recognition. At its best,
WOM can do the same. Positive WOM enhances brand value, but
negative WOM can cause serious, even irreversible, damage to a
brand’s reputation and sales.
Advertising plays a key role in achieving brand recognition, whereas, as
things stand today, WOM has very little to contribute in that respect.
Empirical evidence suggests that the elasticity of sales in response to
advertising is rather low in the short run, but that advertising does affect
brand value and consumer price sensitivity in the long run.
In contrast, the volume of conversations about a product is directly and
immediately correlated with sales – positively or negatively, as the case
may be. Furthermore, the duration of advertising’s “pull effect” is
disputed, whereas the effect of WOM appears to be more lasting.
The volume of conversations about a product is
directly and immediately correlated with sales –
positively or negatively, as the case may be.
Some products and services naturally generate conversations, while
others simply are not talked about. People are more inclined to talk
about things they purchase rarely and use publicly, such as holidays or
cars, whereas things they buy regularly and use privately, such as
toothpaste brands, are barely mentioned. This is a key factor when
deciding whether or not an e-WOM initiative is appropriate.
PRODUCTS AND SERVICES.
How much WOM is generated will also depend on the context in which
the communication takes place. Whereas advertising has proven
effective in all kinds of cultural and social environments, WOM appears
to behave differently among different social and cultural groups.
It is tempting to think that social
m e d i a a r e a l o w - c o s t
alternative to traditional
advertising, for informing and
p e r s u a d i n g c o n s u m e r s .
However, even though the
investment to establish a
presence in social networks is
relatively small, the cost of
generating content is high, as it
demands creativity, time and
A l t h o u g h m o s t
and e-WOM to be
fact is that the two
are competing with
one another for a
E-WOM is part of an
The lesson to be learned here is that social networks act as
amplifiers of traditional advertising, which remains
indispensable in order to reach the point of sale.
Many questions remain
What combination of
advertising and WOM is
How can WOM reinforce
the image of a brand that
a l r e a d y h a s s o m e
recognition in traditional
When, if ever, can WOM
b e a s u b s t i t u t e f o r
Today, the ad may be the opening gambit in an ongoing
conversation across platforms or, conversely, a continuation
of what consumers have already heard in social media.
As a general
one another, as
if through cross
Now that we know what WOM is all about, we
can start to define a social media plan,
following a series of recommendations.
Be aware. Whether you planned it or not, your brand
or product is already being talked about in social
networks. So listen to what people are saying.
Do a brand audit. Before you rush out to conquer
social networks, analyze your brand or product to see
if it is capable of attracting the target audience and
withstanding pressure. If, for some reason, you cannot
act transparently, if your product is not the kind that
generates conversations or if there are reputational
risks, such as a fair chance of generating hostile
conversations, then perhaps you should hold back or
keep a low profile.
Set targets. Decide exactly what you want to achieve
via the Web. Possible goals might be: to attract
customers; to gather feedback from existing
customers; to build links and mentions, so as to
generate traffic to the corporate website; to become
an opinion leader or expert in a certain area; to use
the network as a benchmarking tool; to launch
Choose the right mix. Specify exactly where you
want to be and how you want to get there.
Decide on platforms, profile, message type and
Decide on content and tone. The content may
be generated by the company itself, by users or
even by employees. You will need to establish:
the type of content; the user participation
model; and, above all, the right balance
between content (70 percent) and selling (30
percent). First, you inform; second, you entertain;
third, you interact; and last, you sell.
Measure. What metrics will tell you whether you
have succeeded or failed? It will depend on your
goals. On the Internet, you need a variety of
metrics, but you have to appreciate that they
are likely to be more diffuse than in traditional
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