The Hindu Business Line : What is the word-of-mouth in the ad world, now?

WITH the growing fragmentation of conventional media, and with consumers getting increasingly networked, word of mouth (WOM), or `buzz', will become a more important tool for firms and marketers, according to Mr C.K. Prahalad of the University of Michigan Business School.

In his address at AdAsia 2003 recently, Mr Prahalad said that consumer-to-consumer interactions would become as important as firm-to-consumer interactions; already, there are focused online-chat rooms, including industry-specific ones, and firms realise that consumer networks matter.

Certainly, WOM also carries greater credibility, and therefore, has greater potential impact than any other communication channel. A recent study by the Yale University professors showed that nearly 50 years ago, WOM was the single most important source of information for certain household items, and more recent European studies indicated that 60 per cent of consumers said that family and friends influenced their decisions on specific brands.

Marketers believe that a product's success - especially of a new product — is related to the buzz it generates, and that it directly impacts sales by affecting awareness, preferences, or as a leading indicator of success. It is particularly important for "experience goods," including movies, TV shows, books, restaurants and events. But even companies that consciously do "buzz marketing" do not always know how it works: it is hard to track or measure, and control.

The Yale study showed that online conversations are the easiest and most cost-effective way to measure WOM, which is also called `viral marketing' in its online form. The two professors studied the impact of buzz on new American TV shows by analysing messages posted on online discussion groups, and showed that these online conversations helped predict which shows would succeed. Also, who's talking matters more than how much they talk, and dispersion, or `entropy' — which is a measure of how widespread the discussion is — showed that buzz spreads more quickly when it begins in different places or among people with different interests. There is also an issue of ethics: can firms take advantage of the most credible form of information for consumers?

"If it's not controlled, WOM can very easily get out of hand and become a game of Chinese Whispers," cautioned Mr Ashish Bhasin, Director, Lintas India's Integrated Marketing Action Group. "Besides, online is not big enough in India, so what can be used is SMS on mobile phones."

In fact, Sony used WOM to promote the new serial, `Jassi,' through `flash mobs', wherein groups of 15-30 people went into high-traffic areas such as Big Bazaar and Apna Bazaar called out for `Jassi', and through groups of women on the train who struck up seemingly impromptu conversations about `Jassi'. While flash mobs have been used from New York to London to Sydney for non-commercial purposes, this time it was used to drive audiences to a new show by creating intrigue through the buzz, said Mr Sunil Lulla, Executive Vice-President, SET.

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What is the word-of-mouth in the ad world, now?