WHEN it came to promoting its new video-game console, the Wii, in America, Nintendo recruited a handful of carefully chosen suburban mothers in the hope that they would spread the word among their friends that the Wii was a gaming console the whole family could enjoy together. Nintendo thus became the latest company to use “word-of-mouth” marketing. Nestlé, Sony and Philips have all launched similar campaigns in recent months to promote everything from bottled water to electric toothbrushes. As the power of traditional advertising declines, what was once an experimental marketing approach is becoming more popular.
After all, no form of advertising carries as much weight as an endorsement from a friend. “Amway and Tupperware know you can blend the social and economic to business advantage,” says Walter Carl, a marketing guru at Northeastern University. The difference now, he says, is that the internet can magnify the effect of such endorsements.
The difficulty for marketers is creating the right kind of buzz and learning to control it. Negative views spread just as quickly as positive ones, so if a product has flaws, people will soon find out. And Peter Kim of Forrester, a consultancy, points out that when Microsoft sent laptops loaded with its new Windows Vista software to influential bloggers in an effort to get them to write about it, the resulting online discussion ignored Vista and focused instead on the morality of accepting gifts and the ethics of word-of-mouth marketing. Bad buzz, in short.
BzzAgent, a controversial company based in Boston that is one of the leading exponents of word-of-mouth marketing, operates a network of volunteer “agents” who receive free samples of products in the post. They talk to their friends about them and send back their thoughts. In return, they receive rewards through a points program—an arrangement they are supposed to make clear. This allows a firm to create buzz around a product and to see what kind of word-of-mouth response it generates, which can be useful for subsequent product development and marketing. Last week BzzAgent launched its service in Britain. Dave Balter, BzzAgent’s founder, thinks word-of-mouth marketing will become a multi-billion dollar industry. No doubt he tells that to everyone he meets.