Number 15: Summer 2001

 

Why Buzz is on the rise

By Emanuel Rosen

Word-of-mouth communication is certainly not a new phenomenon. It’s been out there since the invention of… the mouth. So why is it that we seem to hear so much lately about customer-to-customer communication (buzz) and word-of-mouth marketing?

Marketers are interested in word-of-mouth marketing because they sense that customers can hardly hear them. There’s too much noise. Advertising experts estimate that each customer in the U.S. may be exposed to more than fifteen hundred ads every day. To protect themselves, consumers filter out most of the messages they are exposed to from the mass media. They do, however, listen to their friends. Customers are also very skeptical. According to a survey by the public relations firm Porter Novelli, only 37% of the public considers information that comes from a software or computer company “very or somewhat believable.” If you’re with a pharmaceutical company, the number is 28%. Car manufacturers rate 18%, insurance companies 16%…

But customer skepticism and information overload aren’t that new either. The most dramatic reason for the rise in the importance of buzz is availability of new communication technologies. Customers have found new tools for sharing information: chat rooms, email, newsgroups, web sites and other tools are used by consumers to compare notes and express their opinions about the products and services they use. And there are good reasons to believe that what we’ve seen is just the beginning. To understand why, one needs to examine four areas: peer-to-peer computing, mobile computing, “aggregated buzz tools” and demographic considerations.

Peer-to-peer

Although the client-server model is not going to disappear, many analysts agree that peer-to-peer computing is on the rise. Peer-to-peer computing (P2P) is sharing of computer resources and services by direct exchange. The classic example is Napster, but the model goes well beyond sharing music. There are applications of P2P in sharing of other types of files, collaboration, and distributed computing. What does it mean to customer-to-customer communication? There’s potential for more interaction among customers. Not every application will cause people to talk. (Just because I download a song from your PC, doesn’t mean that I ask your opinion about books) but channels of communication that become available tend to be used. P2P is also expected to make publishing on the Net easier. In a recent issue of Release 1.0 (Esther Dyson’s Monthly Report), editor Kevin Werbach explains: “Despite the rhetoric that the Internet automatically makes anyone a publisher, it’s actually quite hard to establish a persistent online identity from which you can serve content to others.” But it is expected that peer-to-peer computing models will simplify publishing and will make it available to more people.

Mobile computing

It’s easy to see how the rise of mobile computing increases customer-to-customer connectivity. People can communicate with others not only when they are at home or at the office, but also when they are in the subway and more important: at the point of purchase itself. I have overheard people talking on their cell phones about anything from finance rates for cars to Italian restaurants. There are more people who can spend more of their time talking to each other. The result? More buzz.

Aggregated Buzz tools

New tools that are emerging on the Net can make electronic word of mouth even more powerful tomorrow. I call them “Aggregated Buzz Tools.” They are essentially databases that store people’s experience with products and services. The idea behind www.zagat.com is very simple: Instead of relying on the opinion of a few restaurant critics, why not hear what many people think about a particular restaurant? To get a glimpse at the possibilities, take a look at rating sites such as www.epinions.com or www.zagat.com.

Demographics

Although older people (like myself) are part of the current Internet revolution, many of us don’t rely on technologies such as chat rooms as much as younger people do. But for today’s teenagers and young adults, asking for advice on-line is second nature. Word of mouth is how they shop. As this generation gains buying power in the next ten years, expect buzz to become even more important.

The rise of buzz is good news to companies with high-quality products and excellent service and bad news to companies that try to get away with less than the highest standards. This doesn’t mean, unfortunately, that bad companies will disappear. But the rise of customer-to-customer communication is likely, over time, to improve the quality of products and services we use.

Marketers must understand that information and influence are no longer held by a few top journalists. These media people can still be very influential, but so can the thousands of customers who use Web sites and news groups to express their opinions. Does this mean that traditional marketing and advertising are dead? No, but buzz should not be ignored. Managing and stimulating buzz should be an important element in your marketing mix.

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© Emanuel Rosen / Through the Loop Consulting Ltd 1998-2001