But Does It Work?
Buzz marketing stands in direct contrast to traditional television or radio advertising — the classic ‘mass marketing’ approach that is based on the premise of broadcasting a message as widely as possible, assuming that this is the best way to reach the largest possible number of interested consumers. Buzzing, which might also be described as ‘micro-marketing,’ assumes that a person-to-person marketing message is much more powerful because it is so personal — and that it could potentially reach more people than a broadcast message, if only it is buzzed about in great quantity by people who have very long contact lists and no qualms about promoting products to anyone who will listen.
Wind points to a survey performed by CNW Marketing Research on the 15 largest U.S. television markets as evidence of why buzz marketing is becoming so important to companies today. It found that more than half of the ads for cars, credit cards and pet-related products are ignored by television viewers. In addition, 42% of ads about home products are ignored, as are 45% of fast food advertisements. The numbers are far worse in the case of viewers with personal video recorders such as TiVo. For that group, 95% of fast food ads were skipped, as were 68% of car ads, 80% of pet product ads, and 94% of financial product advertisements. "The 30-second commercial is becoming less and less powerful. We have to realize that most of the money spent on advertising is being wasted, so advertisers have to look for others sources and ideas for marketing their products," Wind says.
That’s why Vespa turned to buzz marketers to ride its scooters around town and talk up their ‘cool factor’ when they debuted, and why Ford loaned its new Focus cars out to buzz agents for the first six months of its launch. In each case, companies looked for ways to gain high visibility and personal recommendations through buzz.
Not every product can be effectively marketed by buzz agents, however. "It has to be an interesting one," says Kahn. "Products do have to live up to the hype, they do have to deliver. If these products aren’t delivering coolness, this will not over time be a credible method." According to Kahn, products that fit this description are fashion items and items of cultural interest such as TV shows, books and movies — anything that connotes a sense of being ‘in the know.’ "They have to be products where value comes from the social interaction," Kahn says. "What you wear, what movies you go to, what things you read — these are all influenced by social opinion. There are other things that I buy where I don’t care what other people think about them. I like Sweet Tarts. I don’t really care what anybody else thinks about Sweet Tarts. But I like to go to the ‘in’ restaurants, and I want to have read the book everybody’s talking about. I want to know what everybody’s talking about around the water cooler."
The fear for buzz marketing is that, however successful it may currently be, the effectiveness of the approach will inevitably be diluted through overuse and, dare we say it: too much buzz. "Right now it’s a very nontraditional practice which makes it exciting," says marketing professor Peter S. Fader. "But look at pop-up ads and email marketing, which five years ago, when you saw them for the first time, seemed interesting. Now they are at the point of tremendous annoyance. They went from clever, path-breaking and really, truly creative to this incredible annoyance where now, people have just thrown out the baby with the bathwater. And there is no question that buzz marketing is poised to go exactly the same way.
"Buzz marketing needs to be used very judiciously for it to remain effective," he adds. "Otherwise people will become so skeptical and annoyed by it that they will become completely immune to the marketing virus that [marketers] are trying to spread." Fader doesn’t think companies will succeed in preserving buzz marketing as an effective tool because they simply don’t exercise restraint when they have discovered a new marketing approach. And perhaps even more importantly, Fader says, they regularly confuse useful marketing tactics for real marketing strategy.
"What people have to realize is that it’s not a strategy; it’s a tactic. That’s an important distinction," he notes. "Buzz marketing is one of many elements that a company should be doing when trying to get a new product out to market. It’s a specialized tactic. But these days companies are relying on it too heavily, losing sight of what they really should be focusing on: strategy." According to Fader, the buzz about buzz marketing is analogous to the hype that surrounded the Internet in the late 1990s, when so many companies mistook the web and its technology for a new business ‘strategy’ rather than the sales and information channel that it is. "Your strategy is what your overall approach is going to be. It’s answering bigger questions such as, ‘Are we trying to leak into the market slowly or are we trying to explode into the market all at once?’ For example, there are very different sales patterns for movies, which explode, versus new MRI machines, which need to be eased into the market. Next, you ask things like, ‘Do we start with a high price and bring it down? A low price and bring it up? Do we advertise slowly and spread out the message?’ Those are strategic questions."
Once set on strategy, tactics come into play. "There could be a role for buzz building in both skim and penetration marketing strategies," Fader says. But buzz marketing should be combined with other forms of marketing to create a pattern of tactics that support the overall strategy. "It needs to be decided in concert with decisions about what other forms of both traditional and non-traditional forms of marketing should they be using, and exactly how much of the budget should they be spending on each form of messaging. Too many companies are starting with tactics and backing into them as a strategy. I’m a little afraid that people are loading onto particularly small bandwagons such as this and losing sight of the larger, more important issue of resource allocation."
According to marketing professor David R. Bell, who conducted a study looking at retail purchase patterns for online retailer Netgrocer.com, "in general, we should expect the ‘buzz effect’ to be most prominent the first time a consumer tries a product." Netgrocer.com, he says, "ships nonperishable groceries using FedEx anywhere in the U.S., so we took a look at their customer data to see how their customer base evolved over both time and space." With traditional grocery stores, Bell says, customers can all be found within a 10 mile radius of the store. For an online store that ships anywhere, one might expect to see no geographic pattern at all. "What we found was that there were in fact very strong spacial clusterings: New customers came from the places where existing customers lived. It demonstrated very strong social contagion patterns – word-of-mouth. Your neighbor orders from Netgrocer.com, tells you about it, and you decide to try it, too."
Bell, however, also discovered something else: Word-of-mouth apparently has a shelf life. "Before people try something once, they don’t have their own experiences to make judgments, so they will try something based on what their social acquaintances tell them. But for repeat customers, there was no spacial pattern at all because the decision to purchase again requires no input from others. You will buy something if you liked it the first time. Period."