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Let's Rethink How Advertising Works

While we’ve long discarded the simplistic notion that a prospective customer sees or hears a commercial or ad and then —“eureka”— decides to run out and buy the advertised brand, what we haven’t fully grasped is what exactly occurs on the long and winding path to purchase. 

The single most important factor in the success of an advertisement is this: Does it stimulate consumer conversation and sharing? Nothing else matters as much.

Recently, we have been discovering that the imagined wall of separation between advertising and “word of mouth marketing” doesn’t actually exist. As we use increasingly sophisticated analytical tools to evaluate the impact of earned and paid media, we are learning the two are in fact inextricably linked; the most powerful advertising is that which stimulates sharing and conversation, both online and offline. 

This assertion is based on a recent study organized by the Word of Mouth Marketing Association, or WOMMA, and conducted by independent modeling firm Analytic Partners. The study indicated that one-third of all consumer word of mouth is related to advertising in some way. Brand marketers including AT&T, PepsiCo, Intuit and Weight Watchers contributed to the study key data, such as ad spending and sales trends. The study also leveraged online and offline conversation data provided by two members of WOMMA.

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The study revealed that consumer conversations actually increase the sales impact of advertising by 15% and account for an average 13% of consumer sales overall. This means that consumer word of mouth drives roughly $6 trillion in annual consumer spending. For marketers eager to move sales by even a fraction of 1%, these are big numbers, and they suggest some major new opportunities for advertising.

As we begin to explore how word of mouth serves as a key interim step between paid advertising and purchase, a number of new strategies and tactics emerge:

• Advertising must be “talk worthy.” The creative and message content of advertising should lend itself to sharing and conversation, whether that happens through social media, private text and email or face-to-face conversations.

• Advertising should be a “trigger” to stimulate immediate conversations; media that reach people in a social context through co-viewing or co-listening can have more impact.

• Advertising should be targeted to the people most likely to talk about brands and share opinions. Such “influencers” vary significantly by brand category. 

• Ad campaigns should be tested and evaluated based on the additional engagement and reach produced by related word of mouth.

We are entering 2015 more fully aware that advertising works by activating our fundamentally social nature, a central factor in all decisions that we make. As far back as 1966, however, the phrase “word of mouth advertising” was coined in a Harvard Business Review article by Ernest Dichter, the father of motivational research (and the “focus group”). He exhorted the ad community to move from acting as “a salesman who tries to get rid of merchandise,” to the new role of “a friend who recommends a tried and trusted product.” 

With hard numbers supporting this recommendation, it is time to incorporate Dichter’s five decades-old advice into current marketing strategy.

4 comments about "Let's Rethink How Advertising Works".
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  1. Maxwell from eMaximize, February 12, 2015 at 10:42 a.m.

    Sounds like social media advertising .. imagine If Facebook's ad platform achieved these goals.

  2. Jim Nowakowski from Interline Creative Group, Inc., February 15, 2015 at 10:43 a.m.

    Profound insights, Brad. Social media has merely allowed us to SEE the links betweenWOM and advertising that have always existed. As a direct response guy, the whole idea of targeting is to stimulate the conversation in the form of action -- measurable action. We were tracking response with phone numbers long before the Internet. And, we have to be careful of response today as well; on the Internet, unless an order is placed, its very difficult to tell who is who. Thanks!

  3. Alan Westendal from West End Communications/Consul, February 15, 2015 at 1:25 p.m.

    Generally speaking, the only people who spend any measurable amount of time talking about ads are people in the ad business. Pretty often, when industry outsiders talk to each other about an ad, it's about the show-bizzy side and has nothing to do with the product or service. The report also seems to assume that any and all conversation about an ad will have a favorable effect on product sales. Finally, let's say the success=converstation idea is true; how can one know in advance whether an ad will "work"?

  4. Brad Fay from Keller Fay Group (an Engagement Labs company), February 15, 2015 at 7:33 p.m.

    Great comments, thank you. Jim, I like the analogy to direct response--I'll use that. Getting to "do" is a key step along the way to getting to "buy". Regarding Alan's question... not a lot of ads get the benefit of pre-testing, but one idea I've had is to have friends watch ads together and see which ads (or better, which brands) they talk about.

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