Financial stimulation
Companies can also generate word of mouth that's motivated not by factors related to the product itself, but by extrinsic factors. In most cases, this is some kind of financial remuneration.
One of the most common examples of financially incentivized word of mouth techniques is an affiliate or online referral programme, such as that run by online retailer Amazon. The system is simple and straightforward: anyone who runs a website, or who is active on the Web, can recommend products from the company via the affiliate programme. The recommendations are made in the form of referrer-personalized weblinks.The referrer can publish them on his or her website, send them in an email, or post them in Internet forums.When someone clicks on such a link, the system logs the referrer, and once the referred visitor completes a purchase, the referrer will get a reward for the purchase made.
Affiliate marketing's emergence can be attributed to the trend towards cost-per-action advertising models on the Internet after the dot.com bubble burst. As companies were beginning to realize that marketing communications' primary objective should not be awareness but return on investment (ROI), these finder's fee systems seemed a great invention: people who run themed websites, blogs, or newsletters could provide a benefit, earn money and create ROI for the advertiser by connecting their visitors with products that fit the subject. Recent evidence, however, has shown that affiliate programmes can also corrupt some referrers and companies into questionable activity, especially when the products sold are bigger-ticket items.1
According to Aberdeen Group, an IT research and consulting group, 'Affiliates generate sales through third-party education and validation -much in the same way that word of mouth recommendations have traditionally referred business directly to movies, restaurants, merchants, doctors, lawyers and accountants.'2
There is one important difference though: traditional word of mouth happens between customers who inform each other of their own freewill about choices and experiences with brands or products. Introducing referral or finder fees, on the other hand, in a company and customer relationship changes the equation and creates a quasi-sales-agent character. Consequently, it can lead to a different type of word of mouth.
LinkShare, one of the largest affiliate marketing brokers, which boasts over 10 million partnerships with merchants and affiliates,3 experienced problems with this change in company-customer relationships. Its quarterly Titanium award was given to 'the one marketing partner in The LinkShare Club loyalty program that supports the largest number of participating merchants, and drives the greatest increase in online sales for these merchants'.The result: for three consecutive quarters, every winner was later found out to have manipulated search engine results, or used questionable tactics such as cookie stuffing or spam emails, in order to get the massive click-through numbers needed to win the award. (Cookie stuffing tricks affiliate software into registering that a buyer had previously clicked on an affiliate link even if the buyer had not actually done so.4)
Brian Clark of GMD Studios, which began the affiliate marketing analysis site ReveNews.com in 1997, comments: 'Once you empower consumers to do your selling based on a commission, you no longer control what they are doing.' In the end, he goes on to say, some affiliate programmes can lead to affiliates trying anything in order to trick search engines into displaying their referral links: 'It's a race between affiliate marketers and search engines. People will always find ways to glean money from the system.'5
There are other types of financially incentivized word of mouth approaches that can also damage a brand. One example is paid-for fan endorsement, a tactic frequently used by the entertainment industry. Warner Brothers Records tried to promote the band The Secret Machines on frequently read music blogs. Sending MP3 files to bloggers in the hope of publication didn't produce the desired results, so the company published its own enthusiastic 'fan posts' on the MP3 blog Music for Robots. The truth was uncovered because these postings had come from the same IP address that had previously been used to email out the promotional MPs - and the fans were not amused.6 Examples of this type of 'stealth marketing' abound7 - and in many cases the backlash quickly follows. (Justin Foxton goes into more detail about the risks and issues of secret marketing stunts like these in Chapter 2.)
Ed Keller, CEO at NOP World Consumer, who published a well-known book8 on what his firm calls the Influentials(SM) consumer segment (consumers who can influence the purchase behaviour of others), comments:
When people start asking themselves Is someone telling me this because they believe it, or is someone telling me this because they are a paid agent of somebody else?', there's a fine line that needs to be watched closely. Marketers who make their marketing message available to those who seek it out, who learn from it, and then start acting on it, will be successful. And those that end up trying to penetrate paid agents into the marketplace who are saying things they don't believe, will be looked at in the same way that people look at telemarketing today: 'You're intruding on my conversation, get out of here.' Right now, we are probably still too early in the process to know what crosses that boundary. But everybody in the industry needs to keep an eye on this.9
To address these issues, the Viral + Buzz Marketing Association published its first manifesto in June 2004 about rules and principles that should be respected by its practitioners when establishing consumer connections. It states, among other things: 'We strive to . . . deliver the message ... in a way that makes it an enjoyable or valuable experience . . . We will ... be providing a benefit to our audiences and their acquaintances and in so doing, to the brands for which we work. . . . Our goal is to foster genuine enthusiasm about brands and brand communications, which can spread through networks in a way that is enjoyed, appreciated and/or valued.'10
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