• by David L. Smith , July 16, 2001

Viral marketing is all the rage and has been so for some time. Everybody wants to do it. There are many good examples of successful viral marketing efforts. But one thing stands out. There are no good examples of companies who have successfully executed multiple winning viral marketing campaigns. If viral marketing were such a natural, there would be ongoing viral strategies for brands. They don't exist. Does this mean you should not do viral marketing? Do you buy a lottery ticket? Does the fact that the odds against winning are great stop you from doing so? No, but you don't quit your day job in the meantime. Yet, in the first meeting with many clients, viral marketing is brought up.

It's the perception in some quarters that viral marketing translates to a way to get something done at a low budget level. But, just like a lottery ticket, there is no guarantee that your investment will pay out.

That's why viral marketing is like the pet rock. The pet rock was a winning novelty product of the early 70's. The one-hit wonder of marketing. The guy who invented the concept made a killing on it. But he never repeated his success, even though he tried a number of times.

Viral marketing is similar, you need a good concept, but you need some luck along the way, too. And you need to recognize that just because you have done it successfully once, does not mean you can replicate it on an ongoing basis.

Guerilla marketing is another popular tactic. It can also be lower in out-of-pocket cost. But you get what you pay for. Yes, the results can be disproportionate to the investment, but this is a tactic that does not generally sustain a product by itself.

It should be pointed out that many companies who have launched successful viral campaigns (the new movie AI for example) also have large advertising budgets. The same is true for guerrilla marketing. It is not a panacea but a good tool to use against a heavy user segment of your target.

Too many times, new advertisers with small budgets and big expectations ask the agency to "do something out of the box". Or, "we'd like you to do something really creative here". This is like hitting a homerun in the bottom of the ninth when you are down by three runs and have the bases loaded with two out. Can it be done in the right situation? Sure. Should you bet the farm on it? Hardly.

What is the common thread among companies who hit homeruns with products? It's advertising. Sure, there are many examples of products that have made it without advertising campaigns. But eventually, they either adopt advertising to sustain their market or die. Take Coors beer, for example. In the 60's, they were proud of the fact that they did not advertise. Why should they? In many western states, they had over 30% of the beer market. That's of the total beer market, not just some slice. And they created incredible demand in the east through limited distribution. When people came back to Virginia and New York from a trip west with a case of Coors, it was all the rage. (A viral marketing success in the 60's and 70's)

So, why is Coors not the dominant beer in the west today? And why is it not so hip, now that one can buy it in the east? Advertising.

At the same time that Coors did not advertise, Anheuser-Busch was preparing an incredible juggernaut. Budweiser targeted California, the biggest Coors market. (Olympia, a beer from the Northwest was a strong number two in California at the time. Bud was nowhere to be seen on the share charts). It was a very long-term investment, taking a so-so image national brand to the number one slot. But they did it. It took a number of elements, advertising, distribution, community involvement and local breweries (fresh beer). Community involvement was incredible. Even today, you cannot go to a local fair in California without seeing a table or booth with a major Budweiser sign. This involvement is like guerilla marketing. Grass roots efforts in non-standard media at low out-of-pocket cost, tied to a minor distribution deal that helps to liquidate the cost. But done day after day, year after year, not just on a one-time basis.

PR is a little like guerilla marketing and a little like viral marketing. The investment is far less than advertising. But if you do it well and you do it consistently, over time it can usually yield long-term results, with some homeruns along the way.

But it remains that advertising is the only marketing element that you can count on. You can exert control of your advertising strategies and spending levels. You can control every element and you can measure their success.

It's easy to say that advertising is not the answer. Just look at all the money that the dot-coms (a word I have always hated) put into advertising before they went down. Just advertising per-se does not do the trick. There is a tried and true methodology that has been honed by the packaged goods advertisers in the last 40 years. One that most dot-com management groups ignored. That of payout marketing.

With payout marketing, you must have specific goals in your product plan. You then launch a test market to find out the viability of your concept. You perform attitude, awareness and usage research to verify potential related to customer lifetime value and long-term profitability.

You have to test and learn that your offering is viable relative to the payout model or adjust the model and the product expectations accordingly. No payout, no rollout. There is not a single dot-com success that followed the model. Everybody was in such a hurry to spend his or her VC capital (including the VC's), that everyone ignored the rulebook.

Should you do viral marketing? Why not? Everyone needs a long term shot in his or her portfolio. Guerilla marketing against your core users? They will love it and love you for it. But just as you should not quit your day job when you buy a lottery ticket, don't forget the most basic of all marketing programs. Plan your advertising carefully. Project your potential gains. Test your way towards success. Make adjustments that keep you in the black. And stay in business. Pretty simple, huh?

- David L. Smith is President of Mediasmith, Inc., the Integrated Solutions Media Agency based in San Francisco and New York. He can be reached at smith@mediasmithinc.com