New GE Study: Word-of-Mouth Referrals Improve Traditional Marketing Efforts

Marketers have long assumed content shared by friends or other influencers carries more weight than paid placements.  Someone is more likely to visit a restaurant when referred by a friend, the thinking goes, than from a television or radio ad.

Now General Electric has some proof.

In late 2011, the company compared the effectiveness of a paid advertising campaign and paid advertising campaign coupled with online-sharing.   Overall, consumers who saw the ad and received a referral from a friend were 138% more likely to view GE favorably than those who saw the ad alone.

The results of the test were originally published in the January 25th edition of Advertising Age.

“Personal referrals are far and away the most influential form of communications,” said Sparklight Communications President Joseph LaMountain.  “Yet many companies and causes fail to incorporate word-of-mouth into their marketing and communications campaigns.”

For example, organizations can raise significant levels of awareness, or funding, for an issue by asking its supporters to share  information to friends, neighbors and work colleagues.  Yet too often this valuable “human capital” is not effectively mobilized.

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The Future of Advertising?

Some two decades ago, writes Michael Serazio for The Atlantic, in a sly yet silly vignette from Wayne’s World, Mike Myers and Rob Lowe exchange testy remarks about a sponsor’s gauche intrusion into Wayne’s cable access show. Reclining nearby in mullet-to-toe Reebok gear, Garth, Wayne’s companion and co-host, laments, “It’s like people only do things because they get paid. And that’s just really sad.”

This weekend, Morgan Spurlock, documentarian provocateur last seen eating his way to angina in 2004’s Super Size Me, gives that same joke full-length treatment in The Greatest Movie Ever Sold, a film financed by and about “advertainment”—the increasingly pervasive nexus of commercialization and entertainment.

Knowingly or not, Serazio writes, Spurlock’s wink-wink meta-narrative on promotional culture speaks to a much more serious, simmering crisis of faith in the media industry today. No longer able to depend on traditional institutions of advertising to get their message across, corporations need a vessel. No longer able to depend on the publishing and programming apparatus that long supported them, creators of pop culture need a patron.

And thanks to profound economic and technological transformations, audiences’ ability to filter out advertising from their lives—via TiVo, satellite radio, national Do Not Call registries, spam filters, and the like—may one day result in all content becoming branded content.

On one level, Serazio writes, we have no one but ourselves to blame. The more we steel against marketer entreaty in familiar venues—armed with our DVRs and pop-up blockers—and the more that we refuse to pay for editorial content, be it entertainment or journalistic, the more the media and advertising industries will need to wind up in bed together in order to survive.

And the ongoing development of such branded material could be a harbinger for how these businesses are funded and managed—redefining their roles in, rules for, and relationship to popular content.

But if advertising is, indeed, “geographically imperialistic,” and the growth of word-of-mouth marketing over the past decade is any indication—whereby brands try to seed buzz in our everyday conversations—we may well be facing the next creepy horizon of commercial colonization: “real life product placement.”

Look for the Secret Gold Box

Do you ever feel like information goes in one ear, and out the other?  How about all the time.  That’s why it’s so important to make messages sticky.  A sticky message stays with people. It helps them more easily remember your company, candidate or cause.

A slogan increases stickiness, so does a good logo.  But they’re not the only way.  In 1977, the Columbia House Record and Tape Club tried something different. They told TV viewers to look for the “Secret Gold Box” in their print ads and direct mail.  Click on the video below to see one of the original commercials.

Although they ran late at night, the commercials were a huge success.  Every Columbia House print ad circulating with the “Secret Gold Box” promos made money, the first time that ever happened.

What’s so special about the Secret Gold Box?  “Tipping Point” author Malcolm Gladwell thinks it’s a small piece of information that serves as a proxy for a larger piece of information (and a smaller piece of information is easier to remember).  The Secret Gold Box was also special and exclusive, and gave “those in the know” something for free. When the mail and magazine ads hit, the Secret Gold Box acted as a trigger.

How are you using sticky messages get your customers’ attention?

Heather Locklear: Grassroots Visionary

Want to know the real power of grassroots communications?  I read this in my daughter’s Ripley’s Believe it or Not! book: “If everyone who was told about a midnight murder told two more people within 10 minutes, everyone on earth would know about it before morning.”

Hard as it may be to believe, it’s true.  Just look at this chart and mathematical formula I developed (LaMountain’s Law for short).  It shows the cumulative number of people reached using Ripley’s assumptions.  While slow to get started, grassroots ultimately trumps every other form of communication in reach and speed.

So where does Heather Locklear fit into all of this?  She was espousing the power of grassroots communications all the way back in 1979, as seen in this television commercial.

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