Viral Marketing: Starting an Online Word-of-Mouth Epidemic

1. Viral Marketing: Starting an Online Word-of-Mouth Epidemic Stephan Spencer President, Internet Concepts sspencer@netconcepts.com www.netconcepts.com

2. The Problem: Data Smog • Not only are you competing with your competitors for their eyeballs and their loyalty, but also the information glut that fills the Internet and everyone’s lives. • Hear the NPR interview of David Shenk, author of “Data Smog: Surviving the Information Glut” at <http://www.npr.org/ramarchives/ne7a0301-6.ram>

3. Just Say No! • Interruption marketing just doesn’t work anymore • Unanticipated, impersonal, and irrelevant ads won’t break through the data smog • Stop marketing at people. Get out of the way and let people market your products to each other.

4. The Solution: Viral Marketing • Putting together the right offer • Who’s going to spread your message? • Making it easy…(email & web) • Potential traps and hazards • Best and worst practices • Case studies

5. What is viral marketing? • Word of mouth marketing augmented by digital communication • Facilitate the process of people referring their friends and colleagues • to purchase your products, visit your site, sign up for a free trial, subscribe to your newsletter, etc.

6. Traditional WOM Travels slowly Dies off E.g. recommend a book to some friends Digitally augmented WOM Spreads fast Travels far Exponential growth (amplification) E.g. Hotmail Word-of-Mouth on Steroids

7. Some New Jargon • Sneezer, ideavirus, vector, hive, tipping point, connector, maven, promiscuous, powerful, smooth, amplifier, persistence, word-of-mouse, network effect, Law of the Few, Zipf’s Law, Metcalf’s Law, compounding effect, etc. • Gotta love buzzwords!

8. Putting together the right offer • Is your idea virusworthy? • Ideaviruses love a vacuum

9. Who’s going to spread your message? • Seth Godin calls them “sneezers” • “Promiscuous sneezers” - have their price • “Powerful sneezers” - can’t be bought; difficult to predict what will motivate them • Malcolm Gladwell breaks them out differently • “Connectors” - masters of the ‘loose tie,’ seem to know everybody • “Mavens” - genuinely helpful • “Salespeople” - born to sell

10. Divide and conquer • Go after a demographic or psychographic group where your ‘ideavirus’ can dominate • Like people hang out together (e.g. the affluent mix in the same circles) • Target those sympathetic to your cause • BMW dealership - don’t target Ford owners

11. Observe who’s sneezing! • Identify your top sneezers by tracking ratio of “unique opens” for each message sent • 0 = didn’t open • 1 = recipient opened but didn’t forward • 2+ = recipient probably forwarded (unless they check mail from multiple PCs) • Reward and incent these sneezers! They’re worth their weight in gold.

12. Rewarding your ‘sneezers’ • Don’t insist that a referrer’s friend become a customer to earn the incentive. That’s outside his/her control. • Make sure the incentive is relevant to the recipient. • It doesn’t have to be expensive. • e.g. golf balls with the recipient’s name printed on them • DON’T change the rules mid-campaign

13. Gotta give to get • Don’t just give a speech and leave • Fly in your customers to tell their stories • Sponsor a cocktail party afterward • Don’t just tell them how your product is safe and secure; give them a first aid kit for their car • 3M Post-It Notes: • Secretary of 3M’s chairman sent a free case to secretaries of chairmen of the Fortune 500 • MCI Mail: • Blew it - built friction into the system by charging instead of giving it away to build critical mass

14. Network Effect • Metcalf’s Law - the value of a network increases with the square of the number of people using it • A world with 1000 fax machines is 250,000 times better than one with only 2

15. Power of bestseller lists • Zipf’s Law - #1 is MUCH more popular than #2 • Stanford study: artificially boosting bestseller status of downloaded files • Self fulfilling prophecy • If you can’t dominate one, create your own

16. Make it easy for people to“pass it on” • Ask recipients to forward your e-newsletter, email, or SMS message to friends • Include on your site “Email this page to a friend” buttons to refer your articles, products, etc. • Make it a fill-in form that allows the visitor to pass it on to a number of people at once • e.g. Ideavirus.com’s “Send It” page

17. Soft sell • Not a blatant, in-your-face demand but an informal invitation • Should not smack of commercialism or spam • e.g. a blank postcard with a funny cartoon referencing the book and its topic

18. The customer is in control • Of the content • Of the frequency • Of the relationship

19. Hotmail HOTorNOT.com Quixtar Unleashing the Ideavirus Blue Mountain Arts Google SETI@home Budweiser parody Absolut Gaming company Etc. Success stories

20. Hotmail • Appended a small plug to every outgoing email: “Get Your Private, Free Email at http://www.hotmail.com” • Founded in 1996. By Summer 1998, had 25 million active accounts • Signs up over 150,000 subscribers per day, each of them profiles themselves upon registering • Founder (Sabeer Bhatia) sold to Microsoft for $500 million • Sabeer invented the term “viral marketing”

21. HOTorNOT.com • Formerly AmIHotorNot.com • View photos of strangers and rate their looks from 1 to 10 or post your own photo • Launched by 2 unemployed Californians on a whim and with no funding • A MediaMetrix Top 50 most visited site • Peaked at 14.8 million page views in a single day

22. Quixtar • Amway e-commerce site • Distributor hands out a business card with their referral code, required to log in to the site • MLM

23. “Unleashing the Ideavirus” • Book by Seth Godin - in paperback, hardcover, and e-book format • Free to download from the web at www.ideavirus.com • Web site also allows you to easily email it to all your friends • Most downloaded e-book in history • An Amazon.com best seller

24. Blue Mountain Arts • Online greeting card site (bluemountain.com) • Sender chooses an e-card on the site, site then sends an email to the recipient prompting them to click on the link to pick up the card • Recipient is encouraged to send their own e-card

25. Google • Now the most popular search engine on the planet • Came out of nowhere to dethrone the incumbents • Spent no money on advertising • A great service - most relevant results, fastest, and most complete

26. SETI@home • Search for Extra Terrestrial Intelligence • Analyzing noise from space • More than 2 million PCs crunching numbers in their spare time, for no compensation • Propagated by ‘powerful sneezers’ • Persistent

27. Budweiser Parody • “Wassup Superfriends” • Budweiser, wisely, didn’t interfere • Further burned Budweiser’s brand and ad campaign into our subconscious

28. Absolut • Planted attractive women as paid sneezers at bars • When men asked to buy them a drink: “Absolut gin & tonic” • After a while, everyone was ordering Absolut gin & tonics • Imagine now paying the bar to post a bestselling drinks list, then it becomes persistent!

29. Handheld video game maker • Gave them away to the ‘popular kids’ • On the condition that they play with them on the schoolyard

30. More examples • ICQ • Ebay • Paypal • Vindigo • Napster • Hamsterdance

31. Ready, Aim, Misfire. • Southwest - negative WOM spreading like wildfire • SMEI Auckland free CD campaign - lukewarm results • Amazon.com email campaign - signed “Big Bird, King of the World, Amazon.com” • Email marketer’s newsletter - “Ream more”

32. Southwest Airlines

33. SMEI Auckland • Incentive for referring workshop registrant leads: a free CD on “Guerrilla Selling” • Auckland chapter’s first experiment with viral marketing was a non-starter • Why? • Uncompelling incentive? Non-virusworthy product being pitched? Poorly presented? Wrong target audience? • Had good tracking of referral sources (both partners and individual sneezers) • www.smei.co.nz/freecd.php

34. In Summary • Viral marketing dwarfs traditional WOM • Identify your best sneezers • Make a compelling offering and exploit the sneezers’ motivations • Make it easy to spread (“smooth”) • You can influence, but not control

35. Further Reading • Unleashing the Ideavirus by Seth Godin • The Tipping Point by Malcolm Gladwell • www.digitrends.net/marketing/13640_10856.html • www.cbi.cgey.com/journal/issue6/unleashIdea.html • www.webdevelopersjournal.com/articles/site_promotion/sticky_viral_site.html • www.wellsfargo.com/biz/products/resources/advisor/archives/08viral/07viral.jhtml