There are several models for measuring the effectiveness of word of mouth marketing online. Now that the economy has tanked and only the most efficient marketing means will survive, we need a model that stands up to the criteria that Mark Weiner from Delahaye puts forth in his book, Unleashing the Power of PR and in his article at the Institute for PR.
I can explain the perfomance model of our WOM programs in about 15 minutes. I want to be able to do it in 4 minutes. That is the simplicity that I crave and most brand marketers need. Not everyone is looking to innovate (even though the writing is on the wall for traditional marketing) and therefore may not stand still to hear that 15 minute explanation of how word of mouth can sell their product better than a straight diet of advertising and media relations. .
Mark offers 4 "Tips" for PR that I would argue go for Word of Mouth marketing as well:
"Stop pretending. The business people who fund PR programs recognize that PR multipliers are baseless; they can see that PR performance and advertising equivalencies are apples-and-oranges; they know that clip volume isn't the primary goal...and so on. The dirty little secret is that most PR people know it, too. These fake measures may work up to a point, but eventually somebody figures it out and when they do, things can become very unpleasant very quickly.
Instead, work with your PR team and your clients (internal or external) to establish a measurement system that accurately reflects PR's unique value and return-on-investment. Use common language so that everyone benefits during the objectives-setting, strategy development and evaluation stages.
Be brave. One agency executive told me that he was being forced to use circulation/audience multipliers because the client's last agency used them and, as the new agency, clear levels of improvement had to be shown.
If PR is going to evolve as we all agree that it should, we must educate our clients to the advantages of verifiable measurement. We must show courage by putting a moratorium on the use of bad measurement. Eventually, clarity will emerge and become the norm.
Lead by example. Agency and department executives who willfully choose to use irrelevant or improper measurement are only perpetuating the problem.....
....Make it easy. Each year, Delahaye surveys thousands of executives to help define the value system by which they appraise public relations performance. What we've learned is that their expectations lean toward a measurement system that is meaningful, reasonable and measurable. Clip volume is measurable but it means little; driving sales is important but it's impractical. Instead, executives believe that "delivering key messages to target media," "beating the competition" and "meeting or beating objectives" cover the most important bases. "
Word of Mouth Marketing Measurement
We need to use Mr. Weiner's 4 tips in our own efforts to create valuable measurement models for WOM. He points us to many PR industry resources to help in that discipline. In word of mouth marketing, we need only look to WOMMA for some terrific resources. (I am a member and a board member) Like PR, there is no satisfying standard that marketers and communications specialists can agree on. At Ogilvy, we have our own model that inventories KPI (key performance indicators) in several categories including one labeled "engagement." Working with a major brand this past week, I saw a unique formula for reporting out "engagement" online. They remain unsettled on this approach but the trend is clear - we need a simple model that accounts for the deeper level of engagement and trust that people have with word of mouth.
Measuring and reporting on "engagement" may be its own trap. While no one would ever say that engagement is bad - that's like being against 'mom' - what it exactly means and how we should value it remains unclear.
We are shifting gears from measuring KPIs that indicate deeper engagement to using these metrics and proven research to articulate preference for a brand or support for an issue. When we can track all the way to "sales," we will. But as Mark Weiner points out, it is not always practical for any discipline, even advertising, to do so. We are moving to a measure that remains a little higher in the sales funnel and is indicative of the extra power that word of mouth can have.
Ad equivalency is not the way to go as that is it's own trap. I applaud BzzAgent's attempt to apply high cpms to WOM and suspect that is their way of adressing the concerns of the media clients they serve who need to evaluate WOM as a channel. The problem is that I don't think their hypothetical $300 cpm is near enough to valuing word of mouth.
I love Dr. Walter Carl's method which is a rigorous tracking system with actual match backs. You need to hear him describe it to be completly persuaded. For me, it doesn't yet live up to the 'simple' requirement.
We will be releasing more detail about our approach within the next few weeks. Most of the new and refined word of mouth marketing measurement models will be released at this year's WOMMA Research Symposium and Summit on November 12-14 in Las Vegas.
Word of Mouth Marketing is being held to a higher standard than other disciplines in terms of measuring effectiveness. The entire reach and frequency model is completely suspect in thsi day and age of marketing chaos. Still, I think we live up to that higher standard.