TIPPING POINTS Viral Marketing

Malcolm Gladwell’s 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

Downside of traditional marketing/advertising Cost: –TV and print ads are expensive Media clutter: –It is difficult for products to stand out against the background of advertising Cynicism: –Consumers, especially Gen X and Gen Y consumers, are jaded and cynical about “obvious” marketing TIVO, DVRs: –Consumers can avoid TV commercials altogether Segmentation: –Consumers aren’t heterogeneous, they are segmented into different markets

Viral Marketing Steve Jurvetson and Tim Draper coined the term “viral marketing” in a.k.a. below the radar marketing, buzz marketing, stealth advertising Relies on word-of-mouth (WOM) endorsements –like a virus, word about a product or service spreads from one consumer to another

Examples, intentional and unintentional Live Strong bracelets (and the whole wrist band craze) Ipods, Iphones accessory dogs “Support Our Troops” stickers Juicy Couture handbags Hip Hop (culture as a commodity)

More examples of buzz gone wild JenniCam Razor scooters Harry Potter books Wii Fit YouTube MySpace, Facebook Blogs, blogging, the blogosphere

Methods and techniques Poseurs: “ordinary person at a bar, in line at a concert, at a soccer field –Sony Ericcson hired 120 actors and actresses to play tourists at popular attractions around the country.The “tourists” asked passersby to take their picture with a T68i cell phone that featured a digital camera Trendsetters and early adopters –Use of “cool hunters” and “trend spotters” Imitation, social modeling –yellow magnetic ribbons saying “Support the Troops” , chat rooms, and blogs Manufactured controversies: –Ambercrombie & Fitch sold thong underwear in children’s sizes, with the words “eye candy” printed on the front

Malcolm Gladwell’s notion of “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 –It doesn’t take large numbers of people to generate a trend –A select few enjoy a disproportionate amount of influence over the spread of social trends

Tipping points--continued The stickiness factor –idea, message, or product has to be “sticky” or inherently attractive –idea must be memorable, practical, personal, novel –hard to manufacture this feature Power of context –must happen at the right time, place –for example, social networking (MySpace, Facebook) wouldn’t be possible without widespread access to the Internet –rule of 150: Groups grow too large and loose cohesion at 150

Key influencers Connectors: know everybody, are networkers, have many contacts –“Connectors are social glue: they spread it.” (Gladwell) –Have large social circles Mavens: possess information, expertise, and seek to share it – “Mavens are data banks. They provide the message” (Gladwell) –Are “in the know” Salesman: are persuasive –Charismatic types –Often rely on “soft” influence Note: All three types are needed for a phenomenon to take-off

Other concerns Scalability: message must be able to go from very small to very large without “gearing up.” –Wii couldn’t 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.

The downside Not that scientific –evidence is largely anecdotal –phenomenon isn’t 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; Momentum may not reach the tipping point –no guarantee the initial “buzz” will become contagious. –difficult to orchestrate word of mouth Trends come and go quickly –like a contagion, a trend can die out quickly or be replaced by a new trend