Are Social Media-based Programs Scalable?

There is a general perception that advertising is thoroughly scalable and that public relations is not. But how about social media-based word of mouth programs?

You can develop a $5m, $10m and $100m ad program. You will get increasing "returns" for your investment. Reach and frequency can both go up. There are limits but they are pretty out there. It is predictive and incremental. The media relations side of PR can only be dialed up so much before traditional media shuts down on additional coverage for the same brand & message. Now, there is a lot more to public relations that just media relations. The value of public relations goes beyond (yet includes) short term marketing goals to include enduring brand reputation. It seems that PR's role in supporting short term sales such as a new product launch is more limited than the scalable "burst" of awareness available via paid advertising. PR's impact on reputation is almost infinitely scalable. But we are now talking about word of mouth and social media-based word of mouth.

Scalable: Reach

At WOM University, we held a roundtable discussion on the scalability of WOM programs. Keep in mind, my position that most social media-based programs are ultimately WOM programs. The table's focus fell on both online and offline programs. Walter Carl of Northeastern University and Chat Threads presided over the table. He introduce the group to his measurement model which, while complicated, suggests a method for understanding overall performance and then being able to dial it up or down accordingly. Walter modeled out his generational pass-along effect which I will call the 'multiplier effect.' A recent Fast Company article on NING rechristened this a "viral loop." I am not sure that new definition adds anything to our understanding. The multiplier effect tells us how many people we will reach and convert into "relayers" once we give Gen '0' something to talk about. Walter can match back G0 and G1, for instance, to verify that G0 actually passed along their story to 6, 8, or 12 people. It is the same logic he used to support BzzAgent's impact and make it meaningful to the media planners of the world (who rely on scalable "channels").

It's great stuff but a little complex. It speaks to the "reach" capacity of a WOM program. I need to simplify the issue to make it useful in my daily life. If there were predictive models for the multiplier effect, that might help.

Scalable: Frequency vs. Multiple Voices

Walter's model is a great way to understand the reach of a WOM program. The problem is that it remains very complex and requires a self-reporting procedure itself needing an incentive to motivate participants ("Tell us who you talked to and you might win an iPhone or we'll give $5 to charity or...").

The best value of a social media-based WOM program is scaling through time combined with the slower growth of more relevant reach. "More relevant reach" is a loaded phrase. I am suggesting that one's 'social graph', is a more powerful channel than the audience of a particular media property (TV channel, show, magazine, newspaper, etc...). I also assume that when I hear something from a colleague, friend, or "stranger with expertise," it sinks in without the same need of message frequency that we expect with advertising (i.e. need to hear something 3-5 times for it to be memorable, never mind actionable). My client, Gerry, recommended a reasonably high-end coffee maker a few weeks back. I Will eventually buy that coffee maker without any other input save for some model-browsing on the Web.

There are plenty of purchases or decisions that I need to make where the number of 'promoters' matter. On most book purchases, I will scan the reviewers to make sure there are more positive reviews than negative. I scan the negative comments quickly to see if the complaints resonate. But I don't let a few negative comments dissuade me from purchase. There is a name for this behavior which I don't remember. I'll call it a simple 'disaster-check.'

It takes fewer positive voices to drive me to purchase consideration and even purchase than the number of ad impressions it takes to persuade me. In fact, beyond direct-response offers, no advertising really gets me to the same deep level of consideration. This begins to speak to WOMs place in the "funnel" - the deeper end of the purchase/advocacy decision.

If I spend $100K more on my WOMM program, what do I get?

Classic marketer question. Will you get more reach? Will you get more brand/product advocates? Will you get a deeper bond with a select group of enthusiast influencers? And the kicker: will it sell more product?

The answer to all questions is yes, yes, yes and yes. The problem is that I need 30 minutes of your time to explain how. If you intuitively believe in the strengths of WOM and the sales impact of a great Net Promoter Score, you will give me that 30 minutes. If all you care about is a proxy metric like site traffic (i.e. cpg brand marketers online), than you will glaze over right after I tell you this is a different measure than traditional advertising.

You can use Walter's model to answer the $100K question. But I have to ask is that model practical and itself, scalable?

We need simplicity based upon reasonable and shared assumptions. How do you show that WOM is scalable?

Relevant Links:

• Walter Carl's Post on "Communication Value"
• WOMMAs Measurement Books
• Jeremiah's Measurement Tag (for good measurement resources)
• Rachel Happe's Long list of Metrics

Comments

[Sean Williams]

"If I spend $100K more on my WOMM program, what do I get?"

You're right, John, this is a typical marketer question. I'd answer it thus: What you get from $100,000 is more of the right readers, viewers, etc., as opposed to merely more of them generally.

That's also how I'd answer the question if it were applied to PR -- reach isn't the whole story, so I'd differentiate from WOMM and PR focusing on social media and word of mouth. I can scale my PR campaigns by a number of criteria, provided our assumption is not simply "more impressions are better than fewer."

For example, Goodyear can target pubs in the MSM by demographic, specific interest, enthusiasm for a given vehicle, wholesale or retail, etc.

Scalability applies not only to gross reach, but to "right" reach -- and in WOM, getting the "right" people to talk about your product or service is more valuable than just getting "more" people to do so. This is an essential difference, in my opinion, between the marketer approach and the PR approach.

[Amy Madsen]

Thanks for an interesting post. For your readers interested in learning more about Net Promoter, here is a link to the official site: http://www.netpromoter.com for numerous resources including general info, blogs, discussion forum, newsletter, job board, and more.

[Walter Carl]

Hi John!

Thanks for talking about ChatThreads in your discussion of WOMM-U and how to scale programs. A few comments/questions:

- The methodology we use at ChatThreads is a way to measure conversational reach, but it's also a way to assess reported purchase behavior, and in turn, "conversation value" (the bottom-line impact of a conversation to a brand). To determine the conversation value we look at "reach" numbers as well as the percentage at each generation that report purchase.

- You had mentioned some reservations about how the methodology can scale but we haven't run into this problem. For very large-scale programs we can use sampling methods that can achieve statistically significant results without having to involve the entire population of participants.

- You had also mentioned the model was complex. Could you clarify what you mean, or offer any suggestions about ways to make our explanation more clear?

- Finally, interested readers can learn more about ChatThreads at our corporate website which is www.chatthreadscorp.com (the site you linked to is for people participating in our research).

Thanks again for finding enough value in our model to talk about it on your blog!

Walter