• by Ross Fadner , August 19, 2004

Peter Blackshaw, Intelliseek chief marketing officer, had an unusual firsthand experience with the impact of online word-of-mouth. It started with his purchase of a hybrid car. Blackshaw was initially very satisfied with his purchase--so satisfied, in fact, that he took the initiative to do what many early adopter/influential types across the globe now do on a day-to-day basis: write about his experience on a Web log. Blackshaw founded HybridBuzz.com, which became a mouthpiece for Blackshaw and other early adopters with fuel-efficiency on the brain to talk about their like-minded enthusiasm for hybrids.

However, one day, Blackshaw discovered his hybrid vehicle was falling far short of the mileage that his car dealer guaranteed him. Naturally, Blackshaw expressed his displeasure on his Web log, and others responded with similar gripes. Soon thereafter, Blackshaw received calls from Wired magazine and Slashdot journalists requesting more information about what was surely a scam. By the end of the day, Blackshaw said there were 2,000 messages on his blog posted in response to his finding, and within a few days he was fielding calls from CBS Evening News, which was poised to do a 3-minute segment on hybrid cars.

This represents, albeit in a magnified sense, the power of consumer-generated media (CGM). CGM refers to commonly archived online content that is readily accessible by other consumers or key marketplace influencers. Blackshaw uses the term CGM--and not word-of-mouth--because there is one crucial difference between the two terms: CGM is highly measurable, although very few market research firms do so.

Now, Blackshaw makes his living analyzing the effect of such online word-of-mouth on brands. At an ARF Webcast entitled "Consumer-Generated Media: The New Metric for Quantifying Word-of-Mouth," Blackshaw presented evidence of CGM's impact, discussing both the threats and opportunities it poses to brands.

As opposed to other media, Blackshaw said, "the Web, really, is first about listening," and consumer dissatisfaction, in the digital age, can be detrimental to a brand if it strikes a nerve in the wrong kind of person. These wrong kind of people are called speakers--and they represent roughly 10 percent of the population, but trickle through to influence 90 percent of the population, called seekers.

According to research conducted by Forrester and Intelliseek, the trust factor for consumer-to-consumer communication is near 90 percent. As Blackshaw says, so-called speakers "are finding reach in ways that have never been experienced before," through various online mouthpieces such as blogs, bulletin boards, public/private discussion boards, forums, reviews and opinions on product pages, and consumer feedback on branded Web sites.

Blackshaw pointed out that marketers continue to spend more and more on paid search, even though it might only click-through 3 percent of the time, while more often, Web users are clicking on natural results that have a greater likelihood of directing them to a CGM.

These are the root causes of most online word-of-mouth phenomena. However, each leaves a digital trail behind it for an enterprising public relations or marketing person to follow, according to Blackshaw. "CGM can be a very powerful means of auditing your entire marketing mix, because it's entirely measurable," he said, noting that CGM requires vigilance on the part of PR agencies and marketers.

It also enables them to figure out who their clients' influentials are--something planners could take advantage of by segmenting this audience, sending it product samples for testing, or generating marketing ideas based on the buzz they create, etc.

As compared with traditional marketing, CGM is high-reach and high-impact, according to Intelliseek data. It exceeds traditional marketing in its high trust rate and little-to-no cost, but it is erroneously perceived as having low perceived frequency, which Blackshaw noted is no longer true in the digital age.