Word-of-mouth (WoM) has influenced all my mobile phone contracts, where I took my wife on Valentine’s day and the last jar of instant coffee I purchased. It has for you, too, probably. Maybe not those exact items, but you’ve been influenced by people saying that they had a great meal here, that you really need to get some X and their holiday in Y at the Z hotel was fantastic.

No need to be ashamed. It’s the easiest and best source of advice in most circumstances. Nor would it be an appropriate subject for this blog.

A recent McKinsey Quarterly article (registration required for this venerable organ) focusing on how marketers might measure and evaluate WoM through social media and other means, however, is definitely of interest. It’s entitled ‘A new way to measure word-of-mouth marketing’.

The Marketing blog at Brand Republic has already had a few stabs at this piece of tosh, but I felt morally compelled to join the pile-on.

The article shows how important WoM can be, especially in areas where there isn’t an established market, like many technology sectors:

In the mobile-phone market, for example, we have observed that the pass-on rates for key positive and negative messages can increase a company’s market share by as much as 10 percent or reduce it by 20 percent over a two-year period, all other things being equal.

It’s at this point, sadly, that the article starts turning from informative to utter nonsense.

As is ever the truth in editorial, there must be a list of three and long words. McKinsey identifies three 4–5 syllable types of WoM influence:

Experiential: your mate tried it; it was rubbish/great; s/he tells you about it.

Consequential: brands put out messages (e.g. ‘this face cream will make you look younger’). People believe it and pass it on.

Intentional: appears to refer to product placement or buzz marketing.

From here to insanity. McKinsey ‘develops’ a theory of ‘WoM Equity’, which everyone else calls ‘Share of Voice’ but <snark>they wouldn’t be good analysts if they didn’t make up new words for things we already know about</snark>. So what is this revolutionary new formula? WoM value is:

the average sales impact of a brand message multiplied by the number of word-of-mouth messages.

Colour me gobsmacked. This is revolutionary stuff indeed.

No, it isn’t: it’s bullshit. Nearly 3000 words to say “People pass on their opinion about good and bad things. Agencies can try to influence this by creating clever stuff people will pass on. You should measure it by multiplying the (undefined) impact of the message by the number of times it is mentioned”.

The first two conclusions are fine, if inane. The formula is bullshit on so many levels that I don’t know where to begin.

• we still don’t know from any of this what makes an ‘impactful’ message, other than it might be like the Cadbury’s Gorilla campaign (which appeared shortly after the Cadbury’s food poisoning scandal, so sales would always be significantly better than the previous quarter).
• they’re saying a clever advert is more important than a genuine conversation. Really, always?
• and that life-long loyalty is less important than a quick hit?
• isn’t this WoM stuff about your brand’s reputation to at least as great an extent as flogging stuff?
• a model based on interruption, then, rather than interaction or engagement? Are you sure that’s what the Cluetrain is about?

I did quite like their chart (below), though.

picture credit: Mareen Fischinger

First, what we might call the ‘good news’: as social media marketers have been telling us for the last five years, more useful, fun, non-pushy content is more likely to engage people than straightforward advertising.

The reports says the sponsored content was a St Patrick’s Day page containing a video and UGC. The video mentioned the brand sponsoring the content. ‘Give’ widgets let you create a present – like a badge or a greeting card – for friends. ‘Get’ widgets let you create similar things for your own profile page.

But there is a significant caveat here. Yes, people said they’d click links on sponsored content and give/get widgets to a greater extent than on banners, newsletters and non-interactive brand pages. But not by as much as you’d think. The ‘likely to click’ score for sponsored content is 3.3; for old fashioned banners it’s 2.8. That’s a 10% difference in impact. I suppose you might argue that it all depends on how good the content is, and how relevant it is to the site’s users: I can’t really comment on that since I haven’t seen the media used.

Sponsored content is a good thing, then, as far as getting people to click through is concerned. It’s good for awareness and improving sentiment. Unfortunately, there’s absolutely no correlation between this and persuading people to buy things.

Sponsored content was found to be the least successful in terms of converting exposure into sales. I’d imagine that this is probably down to context and the lack of any particular call to action. If you load up a flash game – some sort of Farmville knock-off – and it happens to be sponsored by Corona beer, I’d wager you might think: ‘oh yes, Corona beer – that exists’. If it’s a good game, then you might think: ‘Fair play to you, Corona. Nice one.’ What you probably don’t think is ‘Right, I’m off down to the shop to buy some Corona’. [Actually, that might have been a bad example. Mmm… beer.]

Better targeted, relevant sponsored content would presumably work better: a good example is the free recipe cards that supermarkets give away. If I worked for a supermarket, I’d be all over allrecipes.com with my free recipes, but not with a car-racing game.

The big winner for brands is having a profile page with fans. The ‘with fans’ difference is that fan pages give users a badge that shows on their own profile. Straight brand pages without fans are just there to look at, and are not so successful. The commitment – however slight it may seem – of publically saying that you like a brand turns out to be a fairly strong motivator to buy things from them. The report’s authors suggest that this is because people hate being seen as inconsistent, or displaying cognitive dissonance, science fans. If you’ve joined the Marmite fan page and then buy Vegemite, then that’s odd and wrong, even to you:

…once people purchase products from a brand, they report liking the brand more. But the reverse is also true – when people declare publicly that they like a brand (by putting a logo on their profile for all of their friends to see) they are more likely to buy from it.

This also explains why ‘Give’ widgets work better than ‘Get’ widgets. If you send your friend a virtual pot of Marmite, then that’s a much more public display of affinity than making one for yourself, so you’re more likely to stick to your professed tastes.

The full report is here [PDF]. via. MediaPost

picture credit: CaptPiper

Only poor MySpace has a greater proportion of slackers, while Facebook seems like a hive of communal activity in comparison, with a whopping half of the users there accounting for nearly all the time spent on the site. (sarcasm not intended, but may be enjoyed nonetheless).

[Nielsen invokes the ‘Pareto Principle’: the 80:20 ‘rule’ that’s so frequently mentioned nowadays. That 80% of the content/wealth/product/whatever is produced by 20% of the populace. Except, of course, it isn’t a rule. And if it was, it doesn’t apply here. On Twitter, it would actually be a 79:7 rule, which is totally different. And Facebook would have similar figure, which it doesn’t. And there wouldn’t have been a theatre group called 7:84, since 7% of Scotland’s population own 84% of the wealth.

In actual fact, the scientific term for this distribution is a coincidence.]

Moving on, the Times Technology Blog reports today on some research published at the end of January by RJMetrics. Surveying 50,000 users, the report found that most members of Twitter simply do not tweet. Here, around 80% of users have published fewer than ten updates since opening their account.

The issue is not, as you might have imagined, abandoned older accounts, but rather new users who simply never get started. Over the last six months, the likelihood of a new member tweeting in their second month on the site has declined to just 17%. The next graph shows your likelihood of tweeting this month against the date that you joined:

The network – from some perspectives – is also becoming less social, according to this research: “the average Twitter user has 27 followers, down from 42 followers in August 2009”. The new users aren’t tweeting and aren’t connecting either (the two help to explain each other, of course). Around 80% of Twitter members have fewer than eleven followers, with the mega-stars inflating the average figure very considerably.

You might take this as a sign of Twitter’s figures being over-inflated, or of it being a fad of which people have already grown tired. The Times blog sees the figures as evidence that the site is vastly over-hyped and will soon disappear from the headlines, backing this up with its own ‘original’ reporting:

In an unscientific survey of my friends and business contacts here in San Francisco, the home of Twitter, I found that no one not using Twitter felt they were out of the loop. Only those who needed to get a message out there, usually for company reasons, were using it.

Even those in Tech PR are finding it nowhere near as useful as it once was. One told me: “We launched a social media platform for our client but after a few days, once the the spammers had cottoned on to us, it was pretty much a waste of time.”

I’d suggest that there are at least a couple of reasons why newer users aren’t following or tweeting as much as older users, and neither of them are that Twitter is a fad or a failure. First, if you join Twitter now, it’s all rather odd and intimidating. Every other user is seemingly more popular and interesting than you are. There are no instructions about what to do – why would anyone be interested in what I’m doing right now? Even I’m not interested in that. Then a bunch of marketing bots will start following you. The people you know who are already on Twitter are following too many people already and, as nice as you are, don’t want more on their list. 

Second, and more importantly, there’s more than one Twitter. Here are four:

• there’s the one where geeks swap links and chat;
• there’s the one where people make thinly veiled boasts about their professional success;
• there’s the one where marketers and publishers spurt content blips at people;
• there’s the one where you read celebrities’ micro-blogs.

And there’s plenty of other use cases as well, and many people will probably fall into more than one category. In each case, the criteria for the site delivering a useful experience to its members is slightly different. If I joined Twitter because I am a devoted fan of Lindsay Lohan, then it’s more than likely that I am following one person, am followed by nobody and am saying nothing. It’s quite possible that I don’t even open my own account, preferring to bookmark Linday’s page like my other websites. I’m not a bad user or behind the curve: I’m using the site my way to achieve my aims. Twitter is represented in the press as a celebrity micro-blog site. There is a book about it. No, wait, there’s two. If the site is represented as an online companion to Hello magazine and reality TV shows, it shouldn’t really surprise anyone that a lot of people join in order to consume celebrity lifestyle information.

I think that this is why the usage figures are so different for Twitter and Facebook. Facebook tells you what to do on the site and then gives you multiple ways to do it. Twitter is a blank canvas in comparison: the way you use can be totally different to the way everyone else uses it. To many people, that’s an invitation to their creativity or to their egos; to others it’s an invitation to spend their time on a more obviously useful site.

It also shows us how meaningless averages and per-user figures are in social media. It makes absolutely no sense whatsoever to lump the Lohan fan in with the geek early adopters. It is a different site with different purposes.

As you will be equally unsurprised to learn, Facebook remains the front runner, with 206mn unique visitors in December – 67% of all social media users.

While the rate of growth is impressive, there’s another side to these figures which is rather less so. Five-and-a-half hours over a month? Pathetic! People in the US spend four hours a day watching television.

Of course the figures are slightly meaningless, except as a comparison to the same measure over the previous period. The figure of 5h30 is arrived at by dividing all the time spent online by the number of people using social sites during that time. In truth, there’s probably a very stark differentiation between people who spend hardly any time at all on social sites and those who are never off them.  Nonetheless, a bit of a reminder that social networks have quite some way to go before they rival more traditional media for consumption rates (although — interestingly — their reach is pretty similar).

Another interesting chart shows the differences in time spent across different countries. Australians appear to be the most socially active, with the Japanese bringing up the rear. Presumably interactions using mobile devices weren’t measured? We in the UK come third — another Bronze for the plucky Brits. I’d love to speculate further, but wouldn’t be able to resist national stereotypes.

picture credit: Avlxyz

The diagram was changed to add in users of Twitter and other ‘status-update’ applications, most notably Facebook. Author Josh Bernoff notes that this group has a different demographic make-up to others:

Conversationalists intrigue me. They’re 56% female, more than any other group in the ladder. While they’re among the youngest of the groups, 70% are still 30 and up.

He also explains that people don’t just belong in one category. That’s why the percentages don’t add up to 100 — people take on a variety of roles at different times — the rungs are behaviours rather than groups. I’d argue that all of us are Spectators at least some of the time — people who continually contribute tend to be a bit annnoying, to say the least.

It’s clearly appropriate that Tweeters be included, and understandable that they weren’t perceived as a meaningful description two-and-a-half years ago when the chart was first published. But why are they placed higher than Joiners, Collectors and Critics? It surely doesn’t take any more commitment or engagement to publish an update than it does to join the site in the first place?

I guess the problem is that Twitterers are a broad church. Some people are using it as a microblog or lifestream; some use it to share or republish cool links; some just offer a daily ‘I’m doing this today’; some have conversations.

This was a problem with the ladder analogy in the first place: it’s a little too coarse. Owning a blog doesn’t necessarily mean you’re more ‘engaged’ or ‘participatory’ than someone who doesn’t.

picture credit: Anne Oedolfhirsch

Late December and early January see the seasonal appearance of a popular type of blog post: ‘My Predictions for [Next Year]’. They’re a great stock-in-trade because you can say whatever you like and nobody can prove you wrong until the end of the following year, by which time everyone’s forgotten. I’ve written a couple in the past, but refrained this year, leaving the task to wiser heads than mine.

Heads such as those at analyst firm Gartner, which has just produced its own variation on the theme:  Key Predictions for IT Organizations and Users in 2010 and Beyond. Since they get paid thousands of pounds by businesses to be correct about the future, Gartner doesn’t offer many 12-month predictions, with several stretching to the six-year level – even high-paying subscribers won’t remember by 2015. ;-)

Anyway, the bold bits are from the press release. The regular text is my attempt at a quip or reaction.

By 2012, 20 percent of businesses will own no IT assets.

Quite a lot of businesses own very few IT assets right now. The phone is still the key communications tool for plenty of bricks-and-mortar firms. But what Gartner is talking about is the Cloud, of course, or – more prosaically – leasing arrangements. I’m not entirely sure I buy this. I can see that there will be fewer server rooms, more leasing and more thin devices, but no IT assets is quite a stretch. As I understand it, most leased IT at present is basically the big printers that have come to replace photocopiers, which were always leased anyway.

By 2012, Facebook will become the hub for social network integration and Web socialization.

A safer bet here, I think – with 350mn subscribers already, Facebook could already make this claim to some extent. But Gartner is bolder than this looks – it means all web socialisation. That other social networks and websites will have to offer Facebook integration to survive. This goes against the common wisdom that the incumbent dominant social network will eventually go the way of Friendster, Six Degrees and Friends Reunited as fresher networks attract the restless young.

Nonetheless, I’m relatively happy with the suggestion that Facebook will remain a dominant force. I see more and more websites with Facebook Connect installed. I even installed a module allowing users to log into this site to make comments using their Facebook account. Albeit an open-standards model that will work with other OpenID providers.

It will be interesting to see how this pans out internationally, though. While Facebook dominates in English-speaking countries, there’s considerably more flux and variety elsewhere. Maybe Gartner meant “in the US”, though the text doesn’t say that.

Internet marketing will be regulated by 2015, controlling more than $250 billion in Internet marketing spending worldwide.

Woah. That’s a big push – but remember they’ve got six years for it to happen or for us all to forget. There are a couple of problems with Internet marketing regulation: (1) it already is regulated. Companies have to operate to the same standards they do in offline dealings. (2) But it’s regulated by local laws.Suing a dodgy dealer in Timbuktu in a UK court is all very well, but you still won’t get that herbal vi-gr– you ordered. (3) Increasing local regulation tends to be unpopular because it puts local businesses at a disadvantage compared to those in Timbuktu.

By 2014, over 3 billion of the world’s adult population will be able to transact electronically via mobile or Internet technology.

I can buy this. If anything, I think it will happen quicker. There are already 4bn mobile phones in use. The next iPhone is tipped to incorporate near-field communications. People change their phones at least every 18 months – so now everyone’s got at least a cameraphone with bluetooth. Chip-readers should surely become standard within two generations.

By 2015, context will be as influential to mobile consumer services and relationships as search engines are to the Web.

Pretty vague, but context here means the use of location, time, the accelerometer, near-field communications etc. So if I am walking into Tesco at six-o’clock, the phone loads an appropriate shopping portal that I can wave at the things I want to buy and reminds me to get washing powder, that sort of thing. And why not? Tesco has already got this sort of thing for desktops and dedicated appliances. If my mobile is four-generations better, then I don’t see why I shouldn’t have it there.

By 2013, mobile phones will overtake PCs as the most common Web access device worldwide.

As I’ve mentioned above, there are already 4bn mobile phones in circulation, versus about 1.5bn PCs. If those phones are two generations better, then they can probably do an OK job of rendering the web, maybe through micro-projectors and gesture recognition.

I’ll finish, though, with this video of mobile guru Tomi Ahonen about the next 4bn mobile users. One key point he makes is that the next 4bn are probably in developing nations and that they’ll still be using SMS and WAP for some time to come (he’s not very sanguine about the mobile web, full stop) – thus the biggest revenue opportunities for businesses aren’t the mobile web at all, but in far more down-to-earth, but universally usable applications.

photo credit: Panoramas

Pew Research Center reports that older people are almost as likely to embrace technological change as young people:

…innovations in cell phones, email and online shopping are seen as changes for the better by most Americans with positive views reaching well beyond the youngest Millennial generation. These kinds of change are viewed at least as favorably by Americans in their 30s and 40s as they are by those in their late-teens and 20s and, in many cases, it is only those 65 and older who have less enthusiastic views of these innovations.

This is hopefully the beginning of the end for the remarkably widely rehearsed ‘digital natives vs. digital immigrants’ argument.

It’s not all good news for the digital evangelist, though. There’s a considerably more stark – and perhaps depressing – contrast in opinion when it comes to approval of some of the newer web innovations: blogs and social networks. Only a quarter or fewer over-50s see these things as a positive change.

Just 15% of over-65s think the arrival of blogs is a change for the better, compared to 44% of 18–29 year-olds.

However, this lukewarm response to web innovations is likely to be the result of a lack of familiarity rather than experience. In the UK, around 25% of over-50s and 70% of over-65s have never used the Internet (caveat: these are 2007 figures — I’d guess it’s less now, and perhaps less in the US than the UK, anyway). It’s hard to imagine those people giving a positive appraisal of blogs and socnets, when they’ve never read, written, used or been a part of one. Given their response to mobiles and email, they’re as likely to enjoy these things as anyone else, given the opportunity.

(via. Josie Fraser)
picture credit: Tiago Rïbeiro

42.6% of respondents say they feel less inhibited interacting online than face-to-face.

20% say they lashed out at companies or products thanks to the anonymity of online interaction.

31.5% say that online interaction let them do something they’d been wanting to do.

via marketingcharts.com

Research from Euro RSCG suggests (as you’d have guessed) that people become ‘disinhibited’ as a consequence of an increased ability to interact with brands, products and people.

There’s a positive element to this, of course. Being inhibited is by no means a pure good.

• enable users to articulate and make visible their social networks
• these networks often reflect offline networks in that they make explicit friend-of-friend links and other ‘latent ties’
• Friends on these systems are not necessarily friends in the offline sense, but are very likely to belong to the same offline social network somehow
• implement a (variably) visible profile system, which also displays a list of Friends within that system
• Friends can normally leave visible messages for each other — some actually evolved from messaging systems e.g. QQ and Cyworld
• Many social networks attract groups of quite similar people, at least initially.

So far, so good — not much that most people would find enormously controversial — and a useful list of defining characteristics to keep to hand the next time someone asks you, ‘So what are these social network sites, then?’

Then I read JP Rangaswami’s posts Some Friday Night Ruminations about Facebook et al. and  More Musings about what makes Facebook Different. The short answer to what makes it different, from the first of those posts is that:

I don’t quite know, but it is. Stuff like MySpace and Bebo are overtly narcissistic, it’s all about how you express yourself. Facebook, on the other hand, is about relationships and conversations.

So that kind of wrecks the neat list and the generalisations, because while I agree with them all, I can’t help but observe that he’s right.

In his later post, JP remarks Facebook seemed like ‘a site where communities coalesced and sometimes even collided’ — given its overwhelming take up among the UK and US population over the last twelve months, you find and re-find friendships with family, school-friends, colleagues, ex-colleagues, lovers and rivals — its omnipresence and insistence on real names makes your Facebook identity a lot like your real-life identity. JP reckons this ought to be of value to enterprises because it allows work contact to deepen through the discovery of shared likes, random insights into a fellow’s personality which make you feel more intimate. This is a topic I wrote about in the Double Intimacy Score post at the end of September.

It seems to me that Facebook’s focus is on interaction, not representation. The home page, crucially, I think, is not your profile, but the lifestream of your network. The topmost item of everyone’s profile page is the stream of their latest actions and interactions on the network. That’s the big attraction, not creating the pimpingest profile page ever. That’s why you might go back several times a day — to see what’s going on in your neighbourhood. Once you’ve set your profile up, maybe automated streams from your blogs, flickr and twitters, etc., you’re not actually that likely to return to it very often at all. Once you’ve established contact with a Friend, you’re not even likely to visit their profile page very often, except the sub-sub-sections for new notes, imported items and photos, etc. The action’s in the actions. You add applications because they provide additional ways to interact with people. The action’s in returning that Poke, playing your turn at Scrabble, biting that chump. It’s the wall-to-wall page you look at, not the wall.

YASNS = Yet Another Social Network System

• 46% of the online population in Asia have a blog (compared to just 8% of US web users).
• Almost half of all Asian bloggers (56%) are under 25, while 35% are 25 to 34 years old, and 9% are 35 years old and over. 74% of bloggers in Malaysia are under 25. Compare this to the US, where there is a much wider age spread: 46% of bloggers in the US are aged 30 or over.
• Females make up 64% of Malaysian bloggers compared to 46% in the US. On average, women make up 55% of Asian bloggers.
• More than 40% of Asian bloggers have less than 10 visitors per week.
• 74% of those in the survey find blogs by friends and family to be most interesting.
• About 50% believe blog content to be as trustworthy as traditional media. (Compare to 24% in Europe)
• 56% of those polled said they blogged in order to have an opinion space for themselves.

Asian bloggers are unlikely to read or write about politics and business issues, with the report describing these uses as ‘nascent’.

The main exceptions to this picture are South Korea and India. In Korea, blogging is huge, and their subject matter covers all walks of life. The figures aren’t available in these reports, but I’ve read elsewhere that around 90% of Koreans in their 20s have a Cyworld blog, and that there are perhaps 11.9mn bloggers across the entire population (48.3mn). Korea arguably skews the average figures given above upwards.

In India, blogging is a predominantly male activity, with only 24% of bloggers being female (which will skew the 55% average downwards). It’s also an exception when it comes to subject matter, since business-related blogs are very popular. Around half of Indian bloggers said they found business blogs most interesting, compared to a quarter in the other areas polled.

Update: Was a bit shy of offering any analysis in the original post, not being Asian. Just thinking about how India might skew the averages, it appears personal communications with friends and family are overwhelmingly the most popular use of blogs in the rest of Asia. According to Pew (op cit), this is quite different from the US: it isn’t a reason to blog for 40% of their research respondents and only a minor reason for a further 22%. The culture of blogging, personal and feminised for most of Asia, seems very different to the Western model where it appears to be very much a personal and professional public platform. Indian blogging, on the other hand, seems to be very much driven by entrepreneurial endeavour.