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February 17, 2015

Let's Rethink How Advertising Works

As Originally Published By Brad Fay on MediaPost.com

While we’ve long discarded the simplistic notion that a prospective customer sees or hears a commercial or ad and then —“eureka”— decides to run out and buy the advertised brand, what we haven’t fully grasped is what exactly occurs on the long and winding path to purchase.

The single most important factor in the success of an advertisement is this: Does it stimulate consumer conversation and sharing? Nothing else matters as much.

Recently, we have been discovering that the imagined wall of separation between advertising and “word of mouth marketing” doesn’t actually exist. As we use increasingly sophisticated analytical tools to evaluate the impact of earned and paid media, we are learning the two are in fact inextricably linked; the most powerful advertising is that which stimulates sharing and conversation, both online and offline.

This assertion is based on a recent study organized by the Word of Mouth Marketing Association, or WOMMA, and conducted by independent modeling firm Analytic Partners. The study indicated that one-third of all consumer word of mouth is related to advertising in some way. Brand marketers including AT&T, PepsiCo, Intuit and Weight Watchers contributed to the study key data, such as ad spending and sales trends. The study also leveraged online and offline conversation data provided by two members of WOMMA.

The study revealed that consumer conversations actually increase the sales impact of advertising by 15% and account for an average 13% of consumer sales overall. This means that consumer word of mouth drives roughly $6 trillion in annual consumer spending. For marketers eager to move sales by even a fraction of 1%, these are big numbers, and they suggest some major new opportunities for advertising.

As we begin to explore how word of mouth serves as a key interim step between paid advertising and purchase, a number of new strategies and tactics emerge:

• Advertising must be “talk worthy.” The creative and message content of advertising should lend itself to sharing and conversation, whether that happens through social media, private text and email or face-to-face conversations.

• Advertising should be a “trigger” to stimulate immediate conversations; media that reach people in a social context through co-viewing or co-listening can have more impact.

• Advertising should be targeted to the people most likely to talk about brands and share opinions. Such “influencers” vary significantly by brand category.

• Ad campaigns should be tested and evaluated based on the additional engagement and reach produced by related word of mouth.

We are entering 2015 more fully aware that advertising works by activating our fundamentally social nature, a central factor in all decisions that we make. As far back as 1966, however, the phrase “word of mouth advertising” was coined in a Harvard Business Review article by Ernest Dichter, the father of motivational research (and the “focus group”). He exhorted the ad community to move from acting as “a salesman who tries to get rid of merchandise,” to the new role of “a friend who recommends a tried and trusted product.”

With hard numbers supporting this recommendation, it is time to incorporate Dichter’s five decades-old advice into current marketing strategy.

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Contact us if you would like to discuss how Keller Fay can help you drive word of mouth advocacy.