Thursday, September 18, 2008

Word of Mouth - Do tell a friend

Word of Mouth - How many times have we heard that word (ab) used? Marketing has placed it at an altar that is much visited by many new age firms that claim they are into exploiting word of moth.  However, there are very few great examples of firms that have managed to exploit the benefits of word of mouth (WOM).

In the pre-internet era, it was rational to expect that word of mouth works better in consumer groups that are closely knit - either by geography, family, workplace or some other social context.  However, first with the rise of instant messaging, blogging and then with social networking sites such as facebook, WOM has taken a whole different meaning. I cannot recollect a scenario when something good propagated over the web and bnefited a product commercially - maybe, there quite a few. Just that I cannot recall any immediately.  However, I do remember that an aggressive WOM campaign by the film "Snakes on a Plane" only resulted in its magnificent failure at the box-office. 

I guess the takeaway is that WOM can work both ways.  Firms should also pay attention to the content than just to the content's vehicle delivery.  One additional hurdel in the effectiveness of a WOM campaign is how do you facilitate such WOm to play out? Can firms provide any tools that might enable loyal consumers to unleash the power of WOM? If we look around blogs, IMs and social networkign sites are disconnected and there is no way the benefits of WOM can pan out across these disjoined groups.  These entities pursue such disconnected strategy hoping to be the next AOL of the Social Network era.  However, the inherent flaw in their ideology is that they are actually limiting the pwoer of network externalities.

Enter tools such as Tell-A-Friend. This is a nifty widget that firms can embed intheir website advertisements and what it does is it allows the referrer to access his/her friends across any social network. Cool - ain't it ?  What excites me further is that it comes fom my Alma Mater - Pramati Technologies.

I think tools such as this have the power of obliviating the power of sites such as Facebook which hope to monetize the disjointedness of their network from others and provide a more cohesive platform for advertisers. This is one classic example of how technology can bring down hurdles artificially imposed by firm sin th hope of extracting private rents.  The power of the Internet lies in its openness and thankfully as more parties become players, the barriers will come down quicker helping Internet realize its true potential - the utopian world of of limtless connectivity.

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