AT&T’s Greg Pharo, who heads marketing analytics, recently joined Ed Keller for a webinar and shared the results of AT&T’s market mix modeling, revealing the significant role that WOM plays in driving new customer acquisition.

Pharo reported that paid advertising plays the biggest role in bringing new customers to the fold, accounting for 30% of “gross adds” or sales.  Word of mouth is a close second, explaining over 10% of sales volume through positive comments, plus over 10% of lost/unrealized sales volume due to negative comments.

What about other metrics sometimes used by brands as a surrogate for word of mouth?  “We’ve tried other metrics besides Word of Mouth, such as online buzz (social media) and NPS (the Net Promoter Score),” said Pharo.   “While they provide some insights, they aren’t as strong or reliable for explaining sales as word of mouth.”

In conclusion, Pharo told the audience, “Word of Mouth is an impactful, relevant variable for influencing sales in the wireless category.  WOM metrics belong on a CMO dashboard as a key performance indicator.”

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UM’s Graeme Hutton, SVP and Group Partner, Research, writes about the Nielsen TV/TalkTrack fusion in a recent blog post, saying, “Thankfully, the advertising industry, particularly TV selling and buying, recently received a major shot in the arm from a joint-research initiative by Nielsen TV and the Keller Fay Group…The result is that we now have marketing category-specific rankers of 100+ broadcast and cable TV channels and many more shows highlighting which stations and programs have an above-average, or below-average, proportion of active category brand talkers.”

Hutton continues:  “Overall, I think there is a potential, three-way win-win with this welcome research initiative:  (1) Marketers can create distinctive WOM marketing strategies for brands within their portfolio and versus competitors, ( 2) Agencies can develop unique WOM-centric solutions that can boost campaign reach, and (3) Media owners can offer diverse added-value solutions for each of their TV properties.

     Read more here

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At Keller Fay our research has consistently shown that 90% of all brand conversations take place offline.  New academic research published recently in the Journal of Consumer Psychology helps to explain why.  “Our report shows that when it comes to sharing recommendations on products and services on social media sites, users tend to stay quiet.  They would rather communicate via word of mouth.”  Why?  Because of “the social risk associated with different communications modes,” namely the extent to which people fear “being embarrassed or looking stupid by recommending the brand.”   According to the researchers, the perceived social risk is far higher when it comes to making recommendation on social media than it is when making recommendations in person. 

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