The Momentum Effect Distro Sm

The Momentum EffectHow Word of Mouth Marketing Builds Consumer Adoption and Evangelism

Andrew Strickman, Ammo Marketing

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Percentage of people who trust advertising information

Source: Gallup, 2002

30,000

Number of commercial messages we see every single week

Source: Walter Carl, Northeastern University

4

Number of commercial messages we act on per week


1:3

Number of brand, product and service recommendations from trusted friends we act on weekly


65

Percent: proportion of people who believe that they are constantly bombarded with too much advertising

Source: Yankelovich Partners, 2004

Today

• The Evolution of Brand Experience

• The Game Needs Changing

• Never-Ending Friending

• The Momentum Effect

• Who Are Influencers?

• A Few Real-Life Case Stories

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• The Evolution of Brand Experience

• The Game Needs Changing

• Never-Ending Friending

• The Momentum Effect

• Why Influencers?

The Evolution of Brand Experience

Key Out take

Brand Experience is the single most important thing we can facilitate - online, offline, via mobile, virtual

worlds or branded experience

And when you deliver brand experience, you drive

Momentum

AdvertisingBrand

ExperiencePurchase

Then

Advertising

BrandExperience

Purchase

Futu

re

8

It takes very little time to demonstrate how consumers’ relationships with brands have evolved dramatically over the past decade

The old model worked like this

But the new model puts brand experience at the front of the equation — and in so doing disrupts the whole marketing model

We’ve done a lot of work recently with brands such as Yahoo!, Brown-Forman and KPMG working out WHY this happens...

Why consumers are suddenly becoming actively engaged with our brands BEFORE they purchase

Key Out take

Brand Experience is the single most important thing we can facilitate - online, offline, via mobile, virtual worlds or branded experience. And when you deliver brand experience, you drive Momentum

The Evolution of Consumer Behavior

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• Marketing Model

- Interrupt > Target > Interact > Add Value

• Stories

- Brand Tells > Consumer Chooses > Consumer Interacts > Consumer Tells

• Power

- Brand > Media > Technology > Consumer

• Consumer-Brand Relationship

- Acceptance > Reflection > Participation > Affiliation

• Marketing Model: Interrupt > Target > Interact > Add Value

• Stories: Brand Tells > Consumer Chooses > Consumer Interacts > Consumer Tells

• Power: Brand > Media > Technology > Consumer

• Consumer-Brand Relationship: Acceptance > Reflection > Participation > Affiliation

-

And where does this all lead?

To Ammo’s latest client: This trio of brand marketers could not figure out why they couldn’t sell any lemonade, even after they tried to give it away.

As we say a lot, Free has no value anymore. The serious side of this is that -

As consumers relationships with brands has evolved, so have their expectations

A recent study from NOP suggests that whereas the most consumers expected from brands in the past was free stuff, now, inside knowledge, access and unique experiences related to the brand are valued much more highly

At Ammo we call this ‘social currency’, information, access and experiences — the things that keep Influencers one step ahead of their peers — and the stuff that generates brand affiliation

Has No Value

And where does this all lead?

To Ammo’s latest client: This trio of brand marketers could not figure out why they couldn’t sell any lemonade, even after they tried to give it away.

As we say a lot, Free has no value anymore. The serious side of this is that -

As consumers relationships with brands has evolved, so have their expectations

A recent study from NOP suggests that whereas the most consumers expected from brands in the past was free stuff, now, inside knowledge, access and unique experiences related to the brand are valued much more highly

At Ammo we call this ‘social currency’, information, access and experiences — the things that keep Influencers one step ahead of their peers — and the stuff that generates brand affiliation

?

Adding Value Leads to Brand Affiliation

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Brand Experience

Brand Affiliation

Participatory

Media

Adding value to consumers through branded, interactive

experiences

We know that Brand affiliation is actively sought by today’s consumers, from Coke in China to Nike in the US, from Halo enthusiasts to Radiohead fans

The question is, how do we, as marketers, engage that affiliation?

The only way to move from brand experience to brand affiliation is through adding value to things consumers care about, at the relevant times, in the relevant places and in unexpected but relevant ways.

And the most valuable way of doing so is by engaging them in the conversation — online and offline, respectfully and transparently

Ammo and our parent company Isobar set out to answer that question with a research study co-commissioned with MySpace earlier this year.

Never Ending Friending

Research shows that MySpace, YouTube, and Facebook account for a collective 14% of all time spent online.

The Never Ending Friending study focused on answering the question of whether brands and brand marketing has a place in the social networking space.

With all that time spent online, we wanted to understand what opportunities existed for brands to develop relationships with consumers when they were not only available, but when they truly welcomed the connection.

The relationship that brands can develop with Social Networkers has become one of Never-Ending Friending — taking their relationship with brands in the offline world online and vice versa.

Never-Ending Friending: The Facts

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• Two-Hour Qualitative Research Sessions with MySpace users

- Three in Los Angeles & Chicago, Two in New York

• Three age groups

- Teens (aged 16-18)

- College Students (20-22)

- Young Adults (25-35)

• Online Quantitative Survey

- 3,000 Respondents

• Teens, College Students, Young Adults

- Social Networkers, MySpace Users, Non-Social Networkers

• Two-Hour Qualitative Research Sessions with MySpace users

- Three in Los Angeles & Chicago, Two in New York

• Three age groups

- Teens (aged 16-18)

- College Students (20-22)

- Young Adults (25-35)

• Online Quantitative Survey

Never-Ending Friending: The Takeaways

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• Consumers are ready and willing to receive your brand’s message and

promise online

• They are willing to embrace the brand as a friend and introduce it to their “real

life” friends

• Your mode of communication and engagement is as important, if not moreso

than the actual value of your brand or product

• While “free” continues to have minimal value, opportunities to pass along

brand connections/experiences to friends in the real world hold great “social

currency” and deep emotional value

• The result of successful brand outreach online leads to what we are calling

The Momentum Effect

Consumers are ready and willing to receive your brand’s message and promise online

They are willing to embrace the brand as a friend and introduce it to their “real life” friends

Your mode of communication and engagement is as important, if not moreso than the actual value of your brand or product

While “free” continues to have minimal value, opportunities to pass along brand connections/experiences to friends in the real world hold great “social currency” and deep emotional value

The result of successful brand outreach online leads to what we are calling The Momentum Effect

The Momentum Effect

15 Time

Valu

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Back in the “old days...” like, say 1996, marketers spent a bunch of money to reach consumers, and the minute that spend stopped, the value of it decayed quickly.

Now, however, in the age of participatory media, of the ability to have conversations with your customers and to allow them the opportunity to create stories about your brand, the value of your marketing spend only increases over time.

We call that, The Momentum E!ect, and it continues the return on your investment.

When your B2C spend, can take advantage of the engagement of consumers, the value is much greater than the sum of its parts

The Momentum Effect

15 Time

Valu

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B2C

D E C A Y





The Momentum Effect

15 Time

Valu

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B2C C2C





The Momentum Effect

15 Time

Valu

e

B2C C2C

The

Momentum

Effect





Momentum Beliefs

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1. Momentum happens as people tell and evolve stories about the brand

Momentum happens as people tell

and evolve stories about a brand

Word of Mouth is the single fastest growing marketing discipline today.

And the brands that will win in this space are those whose consumers tell the best stories.

Global clients like Coke, Yahoo! And Beam have their own marketing divisions focusing on WOM

According to NOP WOM (Word of Mouth) is ‘the single most important factor in brand decisions today,’ outstripping TV advertising by 30 percentage points, and internet marketing by 54 points.

Experience Briefs: Stories and Experience

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OLDWhat message do I

want to communicate to my consumer so that

they understand my brand

NEWWhat experiences do my Influencers seek,

and how, uniquely, can my brand add value to

those experiences, so that they desire to become participants

As the myspace study said: ‘friends don’t waste your time - they tell you things you want to know’

In the old world you wrote a creative brief: the objective of the project and a singular message you wanted the consumer to understand

New world: what experience of value can we create for our consumers that engages them more deeply with us and allows them to actually take ownership of the brand’s story

Value Ingredients

Value of Message+

Value of Experience+

Value of Communicator=

Value of Program

Short TermSales, Awareness, Image

Long TermBrand relationship

The equation we need to solve, is how to maximize the value of the message with the value of the experience, amplified by the value of the communicator to demonstrate the value of a marketing program, both in the short term and the long tearm

Momentum cannot happen

without interactivity, period.

It requires at the least

dialogue, and preferably

deep and extended

consumer-brand interaction

Momentum cannot happen without interactivity, period.

It requires at the least dialogue, and preferably deep and extended consumer-brand interaction

But, all interactive media will not be equal in generating Momentum

mobile

Viral Videos

Watch TV online

Active

Passive

Functional Entertainment

ExperientialWebsite

Blogging/Podcasting

DownloadContent

Search

InformationGathering

CreatingContent

IM

Viewing UGC

Non-InteractiveBanner

Shopping SiteSN SiteUsing

Branded Widget

TransactionalWebsite

Online Gaming

InteractiveBanner

Viewing Content

Contest Entry

PodcastListening

Interactive IM

Engagement

Awareness

Momentum

Influencer VIP Program

Forward Link/Video/ Content

Notice GuerrillaActivity

User State

Ad

dre

ssed

Need

Interactive Momentum Drivers Model

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Active Entertainment is essential for the development of Momentum.

Because Influencers require Active Entertainment, our integrated marketing campaigns must leverage this learning to ensure we drive not just awareness and engagement, but real Momentum.

Flip the Model

10% " 90%

If momentum is so important to the effectiveness of a marketing program then the majority of marketing spend should be aimed at ensuring momentum

We do that by flipping the model...

This means flipping the marketing mix on it’s head: from 90:10 (traditional to non-traditional) to 10:90 where the 90% is aimed at driving brand interactivity – online (digital) and offline (experiential and Influencer)

(Tell GAP and Yahoo story)

And, it means changing the focus from driving awareness, to driving product and brand experience

Flip the Model

10% " 90%

If momentum is so important to the effectiveness of a marketing program then the majority of marketing spend should be aimed at ensuring momentum

We do that by flipping the model...

This means flipping the marketing mix on it’s head: from 90:10 (traditional to non-traditional) to 10:90 where the 90% is aimed at driving brand interactivity – online (digital) and offline (experiential and Influencer)

(Tell GAP and Yahoo story)

And, it means changing the focus from driving awareness, to driving product and brand experience

Momentum is not

generated equally by all

people.

Influencers generate a

disproportionate amount

of Momentum.

Momentum is not generated equally by all people.

Influencers generate a disproportionate amount of Momentum.

Research consultancy Keller Fay estimates that INFLUENCERS generate up to ten times the positive WOM vs the general population

Who are Influencers?

The Power of a Few Can Affect A Brand’s Health, Growth and Sales

What Makes Influencers Tick?

An active approach to life passionate people

Enthusiasm for learning they keep up

Connections to many people and groups

Clear set of priorities “this matters”

Strong belief in growth and change

Impact ability to create change

Sources: Ammo Marketing, Influencer Index; Roper

Passion forLife

Connected

PeoplePeople

SociallyAltruistic

Doers

InnerlyConfident

Mindset forSuccess

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The first step in finding the right influencers for a brand is to understand what makes them tick — what characteristics do they all share that sets them apart?

In 2004, Ammo conducted research with Highwire Consulting a British business psychology firm to better understand what drives Influencers, why they are so good at making the right recommendations to the right people at the right time.

That research fueled the creation of the Influencer Index, a proprietary tool we use to screen large numbers of potential influencers for enrollment in our programs.

Funnily enough, almost at the same time Ammo was conducting research, Roper NOP was also, and found parallel characteristics.

Vocal

Adopters

Peer

Influencers

Uber

InfluencersCelebrities

Numbers 1:5 1:10 1:10,000 1:1,000,000

Currency Lifestyle Social Economic Fame

Channels PI Network Informal Work Controlled

Knowledge Surface Deep Expert Surface

Person Club-goer Muso DJ Bono

Use Broadcast Involve Seed Endorse

Circles Varies Wide, Many Work-based VIP

Agency PR Ammo Ammo Prod. Place

Understanding Influence

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We’re Not The Only Ones Saying This...

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So, what was the first book to really prove the effectiveness of Influencer Marketing?

“God told him to gather seventy men of the elders of Israel and use them to spread the word to the rest of the people” —The Bible

“Simply by finding and reaching those few special people who hold so much social power, we can shape the course of social epidemics” —Malcolm Gladwell. The Tipping Point

“This is the bottom line: when Americans make decisions today, it’s a conversation. Before Americans buy, they talk. And they listen. The first step in the buying process is to ask a friend or family member.. what they think.” —Jon Berry, The Influentials


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30





30,000

So let’s return to some of those numbers from the beginning of the presentation.

Number of commercial messages we see every single week


4

Number of commercial messages we act on per week


In an Age of overload - who do you listen to?

In an age of increasing media fragmentation, media sophistication and media overload the consumer, eventually shouts STOP!

With no definitive place to turn, no one trusted source of information - whoever trusts TV commercials these days? - they revert to the most trusted, most credible sources they know - their friends

And not just any friends, their friends and peers who are, in some way, expert on a particular topic or set of topics - the Peer Influencers in their social circles

1:3

Number of brand, product and service recommendations from trusted friends we act on


Even when surrounded by the same bad brand message over and over, a consumer will take their trusted friend’s recommendation above all other

• 76% of Americans talk about brands in a typical day

• An average of 10 brands are mentioned every day

• 70% of brand mentions include a recommendation

WOM used to be the result of successful marketing, now it needs to be planned into the

marketing strategy.

Source: MediaVest Keller Fay Group Study | W-O-M TalkTrack Marketing: Why Everything You Thought You Knew About Buzz is Wrong

Word-of-Mouth Can Lead to Brand Advocacy

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These facts come from a recent study by Keller Fay regarding the REAL opportunity for word-of-mouth marketing

76% of Americans talk about brands in a typical day

An average of 10 brands are mentioned every day

70% of brand mentions include a recommendation

Communicate like a consumer

Listen & Show You Listen

Be Transparent

Not “perfect science”

WOM WOMM

Already happens

Organic

Over time

Do you want

to participate?

Be ready!

Program driven

Time-bound

What do you wantto start?

Advocacy first, then

Amplification

COMMON

Courtesy of the Coca Cola Company 37

How Do We Define WOM(M)?

A company that is taking a lead in the exploration of this new frontier is one of the oldest, sturdiest brands in global marketing history.

Coca Cola uses this slide internally to discuss where the company wants to be

•Digital doesn’t 100% define it; is an enabler

Most WOM Is Face-to-Face

The remainder are:

1. Phone (18%)

2. Email (3%)

3. Instant or Text Message (3%)

4. Online chatroom or blog (1%)

5. Other (3%)

72%

Base: 53,748 Conversations

Of Marketing-Related Conversations Take Place … In-Person

38

Now this is what I call my “fighting words” slide, especially in the realm of digital marketing.

Currently, research shows that when two consumers have a conversation about a brand, 72% of the time that conversation happens FACE-to-FACE

Of course their is plenty of digital chatter about brands online, but how much of it is capturable and expandable?

Thankfully, for all of us in this room, that number dropped almost 10 percentage points in the last year, and continues to slide.

The challenge is: as digital marketers, how can we make more time for our brands to be experienced online and taken through conversation to the offline world?

Getting it Right. Generating Momentum

Right Value - Story + ExperienceRight Place - MediaRight Balance - Media MixRight People - Influencers

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Getting it Right. Generating Momentum

Right Value - Story + ExperienceRight Place - MediaRight Balance - Media MixRight People - Influencers

How Do We Get It Right Online?

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• Deep understanding of the consumer — their motivations, their process for

selection, their online behavior

• Figure out what matters and add value to existing experiences that amplify

the brand

• Use technology to enable and amplify the conversation — allow consumers

to “badge” themselves in ways that heighten their social currency with those

closest to them

Deep understanding of the consumer — their motivations, their process for selection, their online behavior

Figure out what matters and add value to existing experiences that amplify the brand

Use technology to enable and amplify the conversation — allow consumers to “badge” themselves in ways that heighten their social currency with those closest to them

What Creates Awareness but not Value?

Banner ads

Silly online diversions

Podcasts

The Interruption Model

mobile

Viral Videos

Watch TV online

Active

Passive

Functional Entertainment

ExperientialWebsite

Blogging/Podcasting

DownloadContent

Search

InformationGathering

CreatingContent

IM

Viewing UGC

Non-InteractiveBanner

Shopping SiteSN SiteUsing

Branded Widget

TransactionalWebsite

Online Gaming

InteractiveBanner

Viewing Content

Contest Entry

PodcastListening

Interactive IM

Engagement

Awareness

Momentum

Influencer VIP Program

Forward Link/Video/ Content

Notice GuerrillaActivity

User State

Ad

dre

ssed

Need

Interactive Momentum Drivers Model

41

Active Entertainment is essential for the development of Momentum.

Because Influencers require Active Entertainment, our integrated marketing campaigns must leverage this learning to ensure we drive not just awareness and engagement, but real Momentum.

A Few Real Life Case Stories

• The Heidies

• Chambord Influencer Program

This year, The Heidies won the Gran Prix at the Cyber Lions at Cannes.

Many of you have probably seen this bottle. I would also wager that you’ve probably had a drink featuring the deep-flavored black raspberry liqueur from France: perhaps in a Chambord and Champagne or the omnipresent French Martini.

The 25-year-old brand has long-suffered from a crisis of identity that makes it the most frequently seen, dusty old bottle on bars across the United States. Bartenders don’t use it because they don’t understand it.

You might be surprised to learn that Chambord is all natural; that it’s made from the finest black raspberries, madagascar vanilla, moroccan citrus peel and French XO Cognac.

It, in a simple phrase, has a great story to tell

But before Chambord could be marketed to consumers, it had to be embraced by those on the frontlines: the bartenders making quality drinks at luxury establishments.

In order to spread this story of quality, refinement and craftsmanship in an effective way, Ammo hired brand ambassadors in 10 cities across the U.S. to reach out to these Influential bartenders, managers and nightlife insiders.

The ambassadors were the perfect combination of bartender-empathist,

marketing professional

and outgoing, gregarious Influencer.

Their role was to activate existing social and professional networks to identify and develop a relationship with the most influential bartenders in their market.

Ammo’s mantra has long been “surprising, yet relevant.” We don’t do things the way other agencies do.

Instead of sending a brand ambassador into a bar to conduct a 10-minute brand training session before the start of a shift, we developed a wholly new, immersive educational experience called The Chambord Sessions.

The function of the Chambord Sessions was to bring small groups of Influencers together to talk about their craft in a unique environment — either a hotel suite or private loft space that surrounded the experience with the luxury message the brand is constantly communicating.

During the course of the session, Influencers’ beliefs about the brand were challenged by serving a series of cocktails that demonstrated the brand’s versatility: no one knew, and everyone was surprised by the delicious alchemy created when Chambord was paired with bourbon, or tequila or gin.

And then, bartenders were set loose in a fully stocked bar-kitchen environment where they were able to bring their newly-found knowledge to bear on new cocktails, which were captured and have become part of the brand’s ongoing R&D efforts.

• 1,197 Influencer contacts were

reached, versus a pre-program

expectation of 760

• 94% agreed or strongly agreed

Chambord that is a brand that

they would recommend; 73%

agreed or strongly agreed that

they were using it more often

• Volume in accounts covered by

the program increased by

+14%, with re-order rates up by

+17%

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Results

• 1,197 Influencer contacts were reached, versus a pre-program expectation of 760

• 94% agreed or strongly agreed Chambord that is a brand that they would recommend; 73% agreed or

strongly agreed that they were using it more often

• Volume in accounts covered by the program increased by +14%, with re-order rates up by +17%

Thank You!

[email protected]

Business

The Momentum Effect Distro Sm