Last week I kicked off a New York based Word-of-Mouth Marketing Association (WOMMA) workshop , and a key point I underscored -- and repeat in virtually every presentation -- is that buzz never occurs in a vacuum. The digital trail of CGM is like a never-ending accountability scorecard that implicates just about everything in business, from advertising to customer service to employee relations. The key challenge (and opportunity) for managers is to understand and take full advantage of the the "cause and effect" of the various inputs.
BUZZMETRICS/BASES STUDY: Along these lines, the Nielsen BASES and BuzzMetrics divisions (disclosure/transparency check: Nielsen is my official employer) converged on a study and white paper this week underscoring the symbiotic relationship between CGM and paid media. Authored by Kate Niederhoffer (BuzzMetrics), Rob Mooth (BASES), David Wiesenfeld (AC Nielsen) and a few others, this first stage CPG brand and market-mix modeling study found that high blog interest, or buzz, around new product launches is tightly linked to paid media spending. Notes the study:
After analyzing blog buzz volume, ad spending, purchase intentions and actual product sales, Nielsen found the best predictor of buzz for newly launched consumer-packaged goods (CPG) is a large advertising budget. The study evaluated nearly 80 new CPG products across several subcategories, launched in the U.S. between 2005 and 2006. On average, the top 10% of products with the most buzz, spent nearly $20 million on paid media for the launch. In contrast, the companies that generated the next 40% of blog buzz spent an average of $15 million and the companies that generated the bottom 50% spent an average of only $5 million.
Worth also mentioning that 10% of brands accounted for 85% of total CPG buzz in the study. The study also suggests that blog buzz drive greater precision in market forecasting.
The news release is here, and the free white paper download is here (registration required). The authors of the study will host a special Web cast, with a Q&A moderated by Brandweek editor Todd Wasserman, on Friday, July 20 at 12PM EST. Sign up here.
Longer term, I think there are many other key variables that need to be modeled into the mix, and this study is just the first "toe in the water." Other pieces of the mix that need to be evaluated and studied include the following:
- Ad Types: What are the key nuances between "types" of advertising and buzz; will the growth of ad spending online further confirm these conclusions?
- Role/Impact of Search: Where does online search figure into the mix? There's no question the Apple iPhone benefited enormously from search placement, and we also know the pet food industry has been significantly scarred in search results because of negative buzz (potentially impacting future product launches)
- Intervention Impact: What's more important: the amount of spend, or how brands make key interventions against the spend, and ensuring buzz, to drive more efficiency?
- Negative Buzz: What if the buzz backfires because no one believes the advertising? Should the concept of Negative GRPs be integrated into the planning mix?
- Forecasting Against Experience: As brand "experiences" become more closely linked to word-of-mouth and CGM levels, should business processes like "customer service" also be factored into such forecast models?
This is all where the rubber meets the road with word-of-mouth analysis. Very exciting!
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