VIRAL MARKETING & TIPPING POINTS 1

Malcolm Gladwells Best Seller Thomas Schelling (Nobel Prize winner) first introduced the concept of tipping points in 1972 Malcolm Gladwell popularized the concept in his best seller 2

The Downside of Traditional Marketing Cost: TV and print ads are expensive. Media clutter: It is difficult for products to stand out against the background of advertising. Cynicism: Consumers are cynical toward obvious marketing. TIVO, DVRs: Consumers can avoid TV commercials altogether. Segmentation: Consumers arent heterogeneous. They are segmented into different niches. 3

Viral Marketing Steve Jurvetson and Tim Draper coined the term viral marketing in 1997 Also known as buzz marketing or stealth advertising 15 percent of marketing budgets are devoted to buzz and related strategies Relies on word-of-mouth (WOM) endorsements like a virus, word about a product or service spreads from one consumer to another 67 percent of sales of U.S. consumer goods are now influenced by word of mouth 4

Conduits for Viral Marketing Face-to-face interaction Cell phone Texting Instant messaging Twitter Social networking media MySpace Facebook Blogs 5

Examples, Intentional and Unintentional Accessory dogs Blogs, blogging, the blogosphere Etsy ( Flash mobs Harry Potter books Hip Hop (culture as a commodity) Ipods, Iphones Livestrong bracelets 6

More Examples Facebook Obama-mania Pinkberry Support Our Troops bumper stickers Toyota Prius Twitter, tweeting Vampire movies and TV shows YouTube Wii Fit 7

Methods and Techniques Poseurs: ordinary person at a bar, in line at a concert, at a soccer field Attractive people are hired to be seen using products in hip, trendy places Trendsetters and early adopters Use of cool hunters and trend spotters to see ahead Imitation, social modeling yellow magnetic ribbons saying Support the Troops , chat rooms, and blogs A poseur might praise a bands CD in an online forum Manufactured controversies: Creating a publicity stunt to drum up media attention 8

Malcolm Gladwells Tipping Points Tipping point: the threshold or critical point at which an idea, product, or message takes off or reaches critical mass. Viral theory of marketing: ideas and messages can be contagious, just like diseases The law of the few Large numbers of people are not required to generate a trend A select few enjoy a disproportionate amount of influence over others 9

Key influencers: Mavens Mavens: possess information, expertise, and seek to share it Mavens are in the know. Mavens are early adopters, alpha consumers. Mavens are data banks. They provide the message (Gladwell) Mavens may be somewhat socially awkward or geeky Mavens want to educate more than persuade or sell. One American in 10 tells the other nine how to live (Keller & Barry, 2003) They are in the know They include Alpha consumers or early adopters celebrity chefs eco-enthusiasts fashion aficionados fitness gurus tech geeks wine snobs 10

Key Influencers: Connectors Connectors: know everybody, are networkers, have many contacts Connectors are social glue: they spread it. (Gladwell) They have large social circles They are social gadflies; they blog, chat, text, twitter They are the people who always forward s, jokes, articles to you. Six degrees of separation: a small number of people are linked to everyone else 11

Key Influencers: Salesman Salesman: are persuasive They are charismatic They are good at building rapport, trust They often rely on soft influence (not the hard sell) They are the friends who tell us: you gotta see this movie, check out this YouTube video You have got to try this restaurant. Note: All three types are needed for a phenomenon to take-off: Mavens Connectors Salesman 12

Context and Stickiness Power of context The idea, message, or product must happen at the right time and place. For example, social networking (MySpace, Facebook) wouldnt be possible without widespread access to the Internet. The stickiness factor The idea, message, or product has to be sticky or inherently attractive. The idea must be memorable, practical, personal, novel. It is hard to manufacture this feature. 13

Scalability & Effortless Transfer Scalability: message must be able to go from very small to very large without gearing up. Wii couldnt ramp up manufacturing and lost millions in sales. Effortless transfer: message must be passed on for free, or nearly free, or coast on existing networks. word of mouse leveraging free media 14

The Downside The theory is not that scientific The evidence is largely anecdotal. The phenomenon isnt that reliable, predictable. A bit of a finger in the wind approach to marketing Viral marketing is something of an oxymoron. The more viral marketing is planned or contrived, the less likely it is to succeed. Viral marketing may backfire Wal-marts attempt to launch a Facebook page Momentum may not reach the tipping point No guarantee the initial buzz will become contagious Difficult to orchestrate word of mouth Good ideas dont always gain traction. Trends come and go quickly Like a contagion, a trend can die out quickly or be replaced by a new one. 15