Universal McCann: Yes, You Can Plan for Word-of-Mouth - Graeme Hutton - MediaBizBloggers
Published: May 14, 2010 at 05:49 PM GMT
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Last Updated: May 15, 2010 at 05:49 PM GMT
By Graeme Hutton
Like it or not, just because a brand has great word-of-mouth, doesn't mean it's safe to spend less on advertising. The evidence we have gathered at UM implies that far from being dissonant sources of consumer awareness and information, advertising and word-of-mouth can be shown to have a powerful symbiotic relationship.
To assess the relationship between advertising and word-of-mouth, we constructed a regression model built specifically for the purpose. The model tapped two syndicated data sources: Keller Fay's Talk Track for word-of-mouth and Kantar's Media Intelligence for media spend. We looked at two different advertisers, both of whom are UM clients. Let's call them Advertiser A and B.
Both Advertiser A and B are large brands who are household names. Advertiser A has a distinct yet broad female bias while Advertiser B has a somewhat upscale and stylish appeal. The two advertisers operate in different market categories and draw on advertising's ability to help spur their business in markedly dissimilar ways. Consequently as we might expect, advertising's potential impact on their word-of-mouth, WOM, was also distinctly different for each marketer.
Extensive data interrogation revealed the most pragmatic way of correlating the two data sources was to create rolling three month averages for each data set, refined by some minor tweaks by channel.
For each marketer, we were able to determine a clear correlation between advertising weight and word-of-mouth. For Advertiser A, it was 94% and for Advertiser B 89%.
Since the model included media spend, we could also establish advertising's return on investment in building WOM. Importantly, the model's spend inputs were not based on total media spend but on Kantar's reported investment in each media channel. In other words, not only could we see advertising's overall effect in helping build WOM, but the model would also tell us which media were more effective.
Advertiser A's unexpected result: dollar for dollar, women's magazines out performed television by a factor x25! Yes, for every $1 spent on women's magazines, we would have had to have spent $25 to build the same WOM effect on TV. This compelling finding triggered our curiosity to quiz this further – why were magazines so powerful for this advertiser?
Keller Fay's Talk Track can trace specific WOM brand mentions down to an individual magazine. We sought empirical evidence of brand mentions for Advertiser A at the individual title level that might corroborate the model's findings. Since the regression analysis was based on rolling three months data, we wouldn't expect to see an exact match to the advertiser's magazine schedule. But by comparing Advertiser A's brand mentions in over 30 magazines to each magazine's individual reach of Advertiser A's regular users, we saw a heartening correlation between the two of 78%. Not quite proof positive, but good circumstantial evidence nonetheless.
Advertising clearly appeared to help Advertiser A build their WOM, and our model indicated that advertising helped generate up to 70% of the total WOM for that marketer.
Although we investigated many alternatives, we found the same approach also worked best in building a regression model for Advertiser B. In summary, we were able to see a clear return on investment that differed distinctly by channel and reflected this particular advertiser's broader based media strategy. Since this advertiser is the market leader in a high interest category and whose quality products command a price premium, Advertiser B is explicitly less reliant on advertising. Consequently, in this instance we saw that advertising generated 23% of the brand's word-of-mouth, but this was wholly consistent with the role of advertising for this marketer.
As the media world has become more complex, consumer word-of-mouth has grown in importance. Arguably, a key factor in this phenomenon is that each consumer has become their own integrator, their own proactive aggregator, of what they see, hear and interact with. Word-of-mouth is the consumer's own output and interpretations of their aggregations.
Yet most word-of-mouth research studies, with the exception of Keller Fay, have a purely online perspective and focus on online conversations, postings and areas such as consumer video sharing.
While online conversation and social media monitors are invaluable in discerning consumer trends, none of them directly demonstrate the value of other media. We need to continue to develop word-of-mouth tools which appraise not just digital media but the complete media communications spectrum. As Lord Kelvin, the great pioneering 19th century scientist, succinctly put it: If you cannot measure it, you cannot improve it.
Graeme is SVP, Director of Consumer Insights & Research, Graeme is responsible for ensuring that all appropriate proprietary and syndicated research tools and resources are applied in the development of consumer insight strategies, for a total communications research platform--from TV to chat rooms--which informs the efforts of Universal McCann and its agency partners. Graeme can be reached at Graeme.email@example.com
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