Have You Heard the Word?

Tell a friend: Word of mouth rocks. It’s how many people find a dentist, a plumber, a pediatrician and a realtor, even a shrink. You tend to trust your friends. So when one of your close pals swears by her hairstylist, raving about what a “shear” delight he is, you are apt to give him a shot rather than thumbing through the phone book and blindly calling random barbers. Then you’ll tell your friends. “

Small wonder this type of hype is highly coveted.

Now countless companies are trying to glean lessons from the phenomenon of friend-given recommendations. It’s increasingly difficult to cut through the advertising clutter, as consumers gain more and more control over the messages they receive in this world of DVRs and video on demand. Thus, companies invest an estimated $100 million to $150 million a year on word-of-mouth or buzz marketing.

Intelliseek’s “2005 Consumer-Generated Media and Engagement Study” polled 660 online consumers and explored attitudes and opinions across key consumer-generated media venues – including Internet message boards, forums, blogs, direct company feedback and offline conversation. The study found that, compared to traditional advertising, word-of-mouth behavior continues to grow in importance in consumer awareness, trial and purchase of new products.

Consumers are 50 percent more likely to be influenced by recommendations from peers than by radio or TV ads, which is a slightly higher level of influence and trust than found in a 2004 study coauthored by Intelliseek and Forrester.

Yes, everyone knows that good word of mouth can do wonders for a company’s reputation and its bottom line. Of course, the flip side is that the masses can also bad-mouth you and ruin your chances at future fame and fortune. The reality is that, while everyone wants to get good word-of-mouth buzz, not many companies understand how to garner that much sought-after street cred and high regard.

If you’re an affiliate, buzz marketing is an affordable way to generate interest and develop traffic. Even the smallest of affiliate sites can engage customers in this way. It takes strategic thinking but not an ad budget to rival Coke or Pepsi. What is required, however, is some dedication to spreading an idea, a few passionate people and a willingness to talk. A lot. The payoff is that you’ll encourage some folks to check you out online. And you might even earn better commissions as a result.

But currently, word-of-mouth marketing appears to be a fickle business, but if marketers apply some strategy, they are sure to be singing its praises. Whether you tell your friends your secrets or not is up to you.

Take a Bite From Apple’s Book

Apple Computer is one of the best-loved brands around. Even though it claims less than 5 percent of the PC market, fans are rabid about its products. And take a look down the street – see any white ear buds? The prolific iPod phenomenon is proof of how Apple is transforming the music business through good buzz.

One reason Apple got to be so popular in the first place can be traced to Guy Kawasaki, best known for his former role as chief evangelist at Apple; he helped spread the company’s Macintosh operating system through word of mouth. Soon after, other tech firms like Microsoft hired their own evangelists. Kawasaki has authored eight books on marketing, and he thinks that today’s high tech changes will make it easier to spread the word.

“The ubiquity and freedom of broadband are absolutely changing the world, making it easier to build brands, not harder. You used to have to have $3 million to buy a Super Bowl ad,” Kawasaki says. “MySpace and Facebook have been able to build great products and use word-of-mouth and guerrilla marketing to build amazing brands. Nowadays, blogging and podcasting are considerably more powerful means of word of mouth than people simply spreading the word by, well, word of mouth.”

Kawasaki’s advice to marketers hoping to build buzz is to first create a great product and then let customers try it out, let them test-drive. And maybe, just maybe, they’ll spread the good word.

G’head, Squeeze the Charmin

A couple of marketers are taking Kawasaki’s advice and letting the public experience their products in a very hands-on way in the form of “pop up” stores. It’s tough to cut through the clutter, so some brands are renting space on a short-term basis to let consumers experience their goods and generate buzz.

Kodak and Illy Caffè both wanted to let consumers see and experience their products in a hands-on environment. So each opened brief “art exhibits” at their self-created temporary galleries. Kodak’s galleries, which were open during the month of November in New York City and San Francisco, didn’t have merchandise for sale, just photos on the walls and new cameras for gallery-goers to check out.

“The vision behind the Kodak Gallery is to invite consumers in to experience photography and to feel and touch the products. It is much more about the learning experience and getting immersed in the digital experience,” says Kate Imwalle, who helped put together the Kodak Gallery in San Francisco’s Cow Hollow neighborhood. “This gallery is about the power of photographs and celebrating community.”

Kodak promoted the gallery and encouraged foot traffic, but a key component of the experiment was the lack of outright product-pushing. That way, gallery-goers could relax and enjoy the environment.

Galleria Illy at 382 West Broadway in New York had a coffeehouse vibe and tons of art events – acclaimed painter Julian Schnabel created coffee mugs, and NYU film students shot a series of films – to get American consumers hip to its brand. The rental was short term in the high-priced SoHo neighborhood; it opened Sept. 15 and closed Dec. 15. The idea was to give people a chance to experience the brand in the artsy milieu of a coffeehouse/art gallery.

“The galleria was a physical manifestation of our brand. It was like our business card,” says Greg Fea, president and CEO of Illy Caffè North America. “People got to experience Illy and education and culture. They had a full immersion experience with the brand. It was received really well. We’ve been extremely pleased. We had events around art and culture, because culture is a big part of coffee. ” People in New York got to know us better. We served 20,000 coffees, like 300 to 400 on weekend days, and 200 a day during the week.”

Kodak and Illy both advertised without being overt about it. Instead, they created places where people gather and could talk about photographs or coffee. They created communities.

Create Community

Communities happen online, too. A perfect example of how rock bands have used word of mouth to gain recognition for their songs and gigs is found at MySpace.com. Basically, MySpace combined the Internet Underground Music Archive’s song-posting service with Friendster.com’s meet-your-buddies’-buddies community model while ditching that site’s control-freakish attitude on how members can and can’t use the service.

More than 42 million members have joined MySpace.com since its inception in 2003. Rupert Murdoch’s News Corp. bought the website for $583 million last summer.

“Our band has been a part of MySpace since 2003, and we have like a million friends now,” say Pete Wentz, lyricist and bassist of Fall Out Boy, a punk/pop band that will be featured on a MySpace record compilation. “There’s a whole group of kids who are disenfranchised. So you’ve got to go to sites like MySpace.com to reach those people.”

MySpace.com founder Chris DeWolfe says that his company will remain true to user-generated, not corporate-dictated content. “Music labels now understand word of mouth. It happens in an organic manner on MySpace.”

Viral Videos

Now that broadband is a reality, videos can get passed around virally. Spending on online video advertising is anticipated to triple in the next two years, according to research firm eMarketer. Spending will reach $640 million in 2007, up from $225 million 2005. Advertisers will spend at least $1.5 billion or more by the end of the decade.

Coffee company Illy has video podcasts to immerse people in the brand. And Nike has a stealth video campaign out, too. In it, Brazilian soccer sensation Ronaldinho sits on the grass. Someone hands him a metal box. He takes out new cleats, laces them up, then juggles a ball and kicks it into the crossbar four times in succession. A swoosh is subtle but clearly visible through the 2-minute, 44- second commercial. And no, this isn’t a Nike spot on TV.

This “Touch of Gold” video was viewed at a nascent website called YouTube.com an astonishing 1.9 million times after being up on the site for only a month. Nike, a pro at underground publicity, creates under-the-radar campaigns that spread like wildfire – and doesn’t shell out millions to do so.

Nike’s latest play-for-no-pay stunt also includes “Dance with the Ball” and “Don’t Tread on Me: Manifesto.”

“If you want to talk to U.S. soccer fans, you have to go online,” says Nike spokesperson Dean Stoyer. “Soccer is a huge initiative for Nike, and the soccer community lives online. We’re always looking for new ways to be on the cutting edge.”

A few weeks ago, YouTube.com was just two guys – Chad Hurley and Steve Chen, CEO and CTO, respectively (both early employees of PayPal). Currently, YouTube uploads 10,000 videos per day, moving 12 terabytes of video daily – an entire Blockbuster store and a half worth of footage.

The site highlights the most-viewed videos and who’s linking to each clip. MySpace, BlogSpot.com and Friendster all helped steer traffic to Touch of Gold. The best part: YouTube is like photo-hosting site Flickr.com, only for videos – and it’s free. People can upload and share clips with the world.

Beware the Backlash

A word of caution to any would-be word-of-mouth marketers: Be careful what you wish for. For example, take Sony, which recently hired graffiti artists in various cities to paint comics on outdoor surfaces (it paid local merchants for the right to do so). The artwork showed kids playing with various toys with dazed, expressionless faces and hypnotized eyes. Upon closer inspection, the toys they are playing with aren’t rocking horses, marionettes or skateboards, but Sony PSP (PlayStation Portable) game devices.

The ads never mention the company or the product. The concept behind the campaign was that people would see the graffiti, recognize the PSP, think they were cool and tell others to check it out.

The only problem was that in locations like San Francisco, real artists tagged the work “Fony” and wrote scathing manifestos telling the electronics giant to leave city sidewalks alone. This is a perfect example of attempted word of mouth gone terribly wrong. Sony got plenty of buzz, but it also branded itself a poseur in the indie art community.

Likewise, the Intelliseek study found strong negative reaction to shill marketing or artificial buzz, in which consumers are paid or offered incentives to recommend products or brands. One-third of respondents said they would be disappointed if a trusted contact did not fully disclose a paid or incentive-based relationship; 26 percent said they would never trust the opinion of that friend again; and 30 percent said they would be less likely to buy a product or service.

“Trust is the currency of effective advertising,” says Pete Blackshaw, Intelliseek’s chief marketing officer who oversaw the study. “But it’s highly fragile.”

Boston-based BzzAgent has clients like Lee Jeans, Penguin Books and Ralph Lauren. Its “agents” are regular people who volunteer to receive products and plug them. Technically, disclosure is encouraged, but it’s left up to the individual. Tremor, Procter & Gamble’s four-year-old word-of-mouth division, has a group of selected “cool” teens to help hype products. Both firms have gotten a lot of buzz for the buzz they create for clients. But not all the buzz is bueno.

In October, nonprofit advocacy group Commercial Alert sent a letter to the Federal Trade Commission urging a thorough investigation of P&G’s Tremor, which has enlisted about 250,000 teenagers in its buzz marketing salesforce. Commercial Alert charges that Tremor targets teens with deceptive advertising.

“The Commission should carefully examine the targeting of minors by buzz marketing, because children and teenagers tend to be more impressionable and easy to deceive,” says Gary Ruskin, Commercial Alert’s executive director. “The Commission should do this, at a minimum, by issuing subpoenas to executives at Procter & Gamble’s Tremor and other buzz marketers that target children and teenagers, to determine whether their endorsers are disclosing that they are paid marketers.”

DIANE ANDERSON is an editor at Brandweek. She previously worked for the Industry Standard, HotWired and Wired News.

Holy Profits!

Webmaster Jermaine Griggs truly believes in selling the Gospel online. His sites gross almost seven figures per year. His conversion rates are miraculous; six out of 10 people coming to his site end up buying. His list of potential customers grows by 6,000 each month. He has 650 affiliates evangelizing his products. And he’s barely old enough to drink communion wine.

“I attribute everything to God,” the 21-year-old preaches. “This is not only a business venture, it’s a ministry.” His products are mainstream enough: videos that teach piano players how to perform gospel music by ear. But with GospelKeys.com, HearAndPlay.com and a host of other sites catering to the church crowd, Griggs sings the praises of online religious sales with the same passion and conviction with which he leads the choir at Good Success Christian Fellowship in Long Beach, Calif.

“I empower musicians who not only play for themselves but go on to play for churches,” Griggs said. “That’s the ministry side, and it really gives me satisfaction.”

Griggs is one of thousands getting satisfaction from selling faith-based products online. In what comScore ranks as “one of the top 10 gaining categories,” merchants and their affiliates are bringing products once relegated to religious bookstores and church foyers to the online masses. They’re selling religious books, CDs, videos, devotionals, Bibles, gifts, greeting cards, crucifixes, rosaries, menorahs, Kiddish cups, stationery, art, church supplies, incense and – the latest fad – T-shirts with a religious message. “In the past, most of the online sales were driven by [religious] music and books,” said Mike Goldenberg, marketing director at body products merchantMountOfOlivesTreasures.com, which promotes its affiliate program as an online fundraiser for religious groups. “But the theme is now expansion into other categories that heretofore have been largely ignored.”

Suddenly, religious kitsch seems sublime. What was a $2.6 billion market in 1991 is now an $8 billion market, according to Packaged Facts, the publishing division of MarketResearch.com. A growing portion of that revenue comes from online merchants and affiliates. Many target Baptists and charismatic or evangelistic Christians, who are nearly twice as likely to buy Christian books as other Protestants or Catholics. A survey conducted by Hallmark showed four out of five Americans – roughly 230 million – call themselves Christians. Evangelical Christians alone represent 72 million potential buyers, said Goldenberg.

Current events may be fueling a revival. Religious validation, it seems, is often tied to war. And then there’s the buzz gen-erated by Mel Gibson’s movie, The Passion, which grossed nearly $600 million worldwide in its first 10 weeks at the box office. “With The Passion movie that blew through theaters, business has been quite good,” said Ian Rutherford, who founded the Catholic resource AquinasAndMore.com, which pays 6 per- cent to 12 percent to its affiliates. “Our March sales actually beat Christmas.” That doesn’t mean believers are willing to buy every religious trinket online; at least not yet. But it does mean that savvy Webpreneurs are finding ways to get some of those searchers to their own online paradise. “Many specialty items aren’t readily available at Wal-Mart or even the local Christian bookstore, especially if you’re not Christian or your branch of Christianity is not well served by the local store,” said Roger Finke, director of the American Religion Data Archive at Penn State University. “The online retailer can carry greater variety and a larger volume because they are appealing to a potentially larger market.”

With 50 million hits and 275,000 unique visitors per month, Bible.com fits the bill. ComScore’s Media Metrix ranked it the 14th most popular religious site on the Net in April. Who would guess it’s run by a soft-spoken retired couple from Dewey, Ariz.? “We’ve been in this Internet ministry since 1994, with no prior experience,” said Bud Miller. “I’m 75 years old, and Betty is 64. We’re not quite in the age group in the cutting edge of the Internet, and it’s been quite a learning curve. But because we’ve been in ministry, everything we do is trying to get the gospel of the Lord Jesus Christ out. And if we sell something that helps underwrite what we’re doing, then praise God.”

Profit and Piety

These affiliates say they don’t embrace profit; the message, they believe, could be lost in the medium. “Although at times hypocrisy results from this mix of profit and piety, for the most part this sense of ministry imparts a refreshing collegiality to the business,” reports Packaged Data. “Indeed, religious products marketers tend to regard themselves as allies against their real adversaries: the godless and corrupt influences of the secular world.”

Not surprisingly, one hears very little about spammers, predatory ads or other problems in this segment. Revenue spoke with affiliates who earn less than $100 a month and others who earn tens of thousands. Whatever the cash flow, it is often earmarked for greater goals, such as construction of a new parish, missionary trips or the ability to continue spreading a spiritual message.

“We’re pretty much financing the ministry by ourselves right now,” said Marilyn Bush, operator of FastTrackMinistries.com. “And it’s just one more way to make money.” Her job introduced her to the value of affiliate relationships – she’s assistant to the marketing director for GospelCom.net, parent company to GospelDirect.com. Now she uses a GospelDirect affiliate link on her personal site. Commissions go to fuel her trusty 1984 motor home, donned with “Fast Track Ministries” signs on each latte-hued side. “We take our motor home and go to different auto racetracks,” said Bush, who spends weekends with husband Larry driving to Michigan’s 43 dirt tracks or NASCAR tracks. They roam the pits talking to the drivers and their families, walk through the stands handing out pictures of Christian NASCAR drivers or sports devotional books and – once announced – greet the children under the shade of the motor home awning and tell stories of David and the giant Goliath or Noah and his ark of animals. “Our site is pretty small, so we don’t even make $100 per month,” Bush said. “But with gas prices now, $100 a month almost fills our motor home. I would accept that from anybody.”

GospelDirect.com offers an 8 percent commission, which is about average for religious sites. But some sites give more. PacificHeritage.com, for example, pays a 20 percent commission on sales of its gifts and statuary, which includes 16- to 33-inch-tall saints and angels with glass eyes and “life-like, long beautiful eyelashes.” Pacific Heritage also offers a bonus to the people who refer new affiliates: 25 percent of the new affiliate’s commissions. JustCatholic.com rewards consumers by offering to send rebates to the parish of the shopper’s choice. In 2003, it sent checks to 1,200 US parishes.

Being an affiliate in the religious space takes some conviction. “The non-religious product companies would die to have the passionate cause that’s inherent in the religious companies,” said Jackie Huba, author of Creating Customer Evangelists. “Buying things that are already part of your belief set fills an emotional need and emotional desire for your life. The religious companies already have that cause, and their buyers are already true believers.”

There are already many online gathering spots for the religious, from forums, to webcast religious services like WekivaPresbyterian.org, to issues-related message boards, to Christian dating services like FriendFinder’s BigChurch.com. “Just like every other industry, Internet-related stuff is coming into its own – for religious purposes as well,” said Stan Taylor, co-creator of ReligiousResources.org, a free directory of 5,000-plus online merchants selling everything from religious art and events to memberships in electronic communities and religious texts. “The community potentials on the Internet are showing a lot of promise in faith-based items.”

Thanks to Amazon.com’s religious books and Google’s AdWords, Taylor is now pulling in a few affiliate checks of his own. “They enhance our site, and we make money off of them,” said Taylor, who reports 2 percent clickthroughs and commissions of a few hundred dollars per month on free ads automatically placed by Google’s software on Web pages matching ad content.

Target Audiences

Catholic sites, for instance, “focus on either Catholics who want to learn more about their faith or Catholics you’d consider devout – orthodox Catholics who take their faith seriously,” said AquinasAndMore.com’s Rutherford, who recently launched a Catholic version of eBay, CatholicAuction.com. Christian sites most frequently target evangelicals and Baptists, the two largest Christian segments after Catholics. Jewish sites focus on orthodox Judaism, the most ritualistic and therefore most heavily associated with Judaic products.

For webmasters, every sale, every site visit, every ad is a chance to bring individuals into the flock. Consumers “want something that’s missing in their life, and if they find it at your site they’re going to walk through your doors,” said Dean Peters. He helps his Baptist church youth group raise funds through CafePress.com’s affiliate program, and during the week runs the HealYourChurchWebsite.com forum.

Despite the zeal with which they talk about their products, religious affiliates seem less advanced at spreading their message in the Internet world. Email campaigns are few and far between. Few religious affiliates bid on search engine placement. Viral marketing is largely limited to e-cards. And potential affiliates who already have a substantial land-based following shy away from affiliate programs, not because the money isn’t there but rather, they’re afraid to be perceived as having a site that hawks its wares.

That’s actually good news for new affiliate entrants. There’s plenty of opportunity to get high-ranking placements on search engines. “You can get in with Gospel products for less than 10 cents per click,” said Griggs. “I have affiliates out there – five or six – who are working search engines with their own financial resources, but their commissions are outweighing what they pay by four or five times.”

That’s a pretty good return on investment, echoed in sites outside of Griggs’. “If a site is really willing to promote and can get on the search engines, they can do well,” Rutherford said. “A banner somewhere on the site just doesn’t cut it. They’ve got to be willing to go out of their way to promote specific products or categories on their home page or throughout their site. [After that], it’s really a matter of how much they’re willing to do.”

It also pays to pay attention to trends. For Catholic sites, items such as rosaries and Gregorian chants – things that have waned in popularity over the years – are starting to gain interest again. For evangelical sites, T-shirts proclaiming “Jesus is my homeboy” or other pseudo-evangelistic phrases are hot, as are Christian magazines and Bibles aimed at the teen market.

With all the well-behaved sites in this sector, are there any hurdles for sites based on religion? “There’s always a problem between the secular and the Christian/religious world,” said Griggs. “And that’s what we have to deal with. We do have the people who are in this business just for the money. We do battle with that. But for the people who love God, and gospel music is what they do, we’ll never have a problem with those people.”

JENNIFER MEACHAM has been writing about business and technology for more than a decade. She was named the Region X Journalist of the Year by the US Small Business Administration in 2002.