Consumer-Generated Media:

The Birth & Rise of the Word-of-Mouth Industry

Walter J. Carl, Ph.D.

Department of Communication Studies
This work is licensed under a Public Lecture Series
Creative Commons Attribution-NonCommercial-
NoDerivs 2.5 License. March 2006
All logos and images are copyright of the respective companies and individuals. 1
Inclusion is not meant to imply any endorsement.
 October 2005

November 2003
Department Public
Lectures Series
This presentation is a follow-up
to my 2003 public lecture, as
well as the panel discussion on http://www.lib.neu.edu/newmedia/index.html

New Media. It is meant to provide an overview for those who

want an introduction to this exciting, growing industry. 2
3
 F2F v. Media: A Well-Known Distinction

2-Step Flow

People tend to think of media as TV,

radio, the internet, etc., while F2F is
traditionally seen to be “unmediated.”
Can F2F be considered a media Media Richness
channel? Should it be? 4
Overview
Here’s • WOM & CGM defined
what I’d
– Resurgence of WOM
like to cover…
• WOM & CGM examples
• WOM as “media channel”?
• Industry associations
• Key challenges facing
industry
– Research interventions
5
Word-of-Mouth, Defined
"Oral, person-to-person
communication between a
receiver and a
communicator whom the
receiver perceives as non-
commercial, concerning a
brand, product or a
service." (Arndt, 1967) http://www.fictionwise.com/knight/titian.adam&eve.jpg1

O.E.D. (1553) by word of

mouth: by speaking, as
distinguished from writing or
other method of expression;
orally. Also word of mouth n.
phr., oral communication, oral
publicity 6
Why People Engage in WOM
Positive WOM Negative WOM
• Altruism • Altruism
• Product Involvement • Anxiety Reduction
• Self-Enhancement • Advice-Seeking
• Helping the Company • Vengeance

Just laying the ground work about why people engage in WOM.
I’ll revisit this towards the end of my talk to help understand WOM
as part of an organized marketing program.

Findings reported in Sundaram et al., Advances in Consumer Research, Volume 25, 1998.
7
Resurgence of WOM
• Advertising clutter, seen as invasive
• Distrust of corporate messages
• Consumer desire for greater control and
engagement
• Emergence of communication
technologies to amplify WOM

When people ask me “Why is word of mouth so hot now?”

… this is what I tell them. 8
9
Consumer-Generated Media
“But the internet changed and turbocharged word-of-
mouth behavior in ways that marketers have not been
able to capture, understand or learn from—until
recently. The Internet has transformed the intimacy of
word-of-mouth behavior into a broadcast-like ability to
communicate with the masses, whether a group of
friends or hundreds and thousands of online-but-
connected strangers at computer keyboards... [a
phenomenon we dub] ‘consumer-generated media.’”

10
WOM & CGM Examples

Organic Amplified

Philosophy Activity

Offline Online
Some distinctions we can use to organize the WOM & CGM space.
Visit http://www.womma.org/wom101.htm to learn more. 11
To view this CGM video, visit
http://www.bikeforums.net/video/1.mov

12
 Other market research
and analyst firms:

These companies are tracking the

online and offline conversations.

For additional companies, visit

http://www.womma.org/members.htm 13
 Chrysler’s 300C Influencer Program
• WOM & influencer
product seeding
program.
• WOM influences 71% of
auto buying decisions
versus TV’s 17%
• Influencer profile:
Category expertise and
light loyalty.
• Private launch, 60-day This is an example of an WOM influencer and
trial with car. product seeding program. For photos and
additional information
• Influencers invited to on this program, visit
tell their stories about http://www.womma.org/wombat/presentations/w
omma_wombat_thoburn.pdf
experience with the car
to their social networks. 14
 I’ve got to say that
it is one of the
best vehicles I
have ever driven.

Some other
companies:
15
This is a campaign trying to
integrate “old” and “new” media.
Some wonder whether or not this is
“authentic” CGM… 16
To view an example, visit
http://notetaker.typepad.com/cgm/2006/03/icgm_incented_c.html
17
Contrast the Chevy Tahoe campaign with CGM on YouTube. 18
Eat your heart out AdBusters... check out this clever “spoof ad”:
http://customerevangelists.typepad.com/blog/2006/03/chevy_tahoe_cam.html

19
 Principles of WOM & “Evangelism”
1. Customer plus-delta
2. Build the buzz
3. Napsterize your
knowledge
4. Create community
5. Make bite-size chunks
Other authors:
6. Create a cause

To see more authors, visit

http://www.womma.org/womlibrary.htm 20
CGM and WOM as Media Channel?

CGM space
WOM space

21
Some companies want to
shift the discourse about
WOM from “WOM as a
discipline or tactic” to
“WOM as a media channel.”

22
Other companies
with networks of
program participants:

23
Industry Associations & Conferences

Learn more at
http://www.womma.org
Most of the companies on the prior slides represent and
WOM marketing research firms, agencies, consultants, http://www.vbma.net
authors, and brands that have organized themselves as
an industry association (and of course a few academics
too). This presentation has discussed more about the
North American-based firms, but there are also plenty
of international firms as well. 24
Key Challenges
• Ethics & Societal Effects
• Credible Metrics

Many consider these two issues to be the biggest challenges of this

nascent industry. To learn how WOMMA is responding
to these challenges, visit http://www.womma.org/programs.htm

25
 Most Common Critiques of
Peer-to-Peer Influence Programs
• Minors
• Undercover, stealth
• Commercialization of chit-chat
• Corporate colonization of the life world
Sony Ericsson’s
“Fake Tourist”
Campaign

To learn more, visit:

http://wom-study.blogspot.com/2006/02/do-you-believe-social-critique-of.html 26
The methods versus
the message?
Compare and contrast
MoveOn’s use of a
CGM ad contest to
27
Chevy Tahoe’s.
The methods versus the message? Reflect on similarities and differences between a
peer-to-peer WOM campaign whose aim is to reduce teen smoking with a WOM campaign
to sell more cleaning products. Is one more palatable to you than the other? If so, why? 28
To see additional screen shots, visit http://brainsonfire.com
29
Measurement
• “You can’t manage what
you can’t measure”
• “You can’t manage what
you can’t understand”

Reflect on the importance of insights

offered by both quantitative and
qualitative methods. 30
Ethics is effectiveness. Not only is disclosure ethical, it’s also effective.

The Practical Effects of Disclosure

Without Disclosure With Disclosure

PP PP

CP CP CP
CP CP
CP CP CP CP
CP CP
CP
CP CP CP CP
CP CP
CP CP
CP CP
CP CP CP
CP

Average Number of People Told = Average Number of People Told =

1.18 2.02

70% increase
in pass-along/relay rate
Differences are significant at p < .05
© Walter J. Carl, Ph.D. From “To Tell Or Not To Tell” Summary Report. To learn more about this study visit 31
http://www.waltercarl.neu.edu/downloads
and download the “To Tell Or Not To Tell?” report
 Why Pass Along Might Be Higher
With Disclosure…
Positive WOM Negative WOM
• Altruism • Altruism
• Product Involvement • Anxiety Reduction
• Self-Enhancement • Advice-Seeking
• Helping the Company • Vengeance
… because knowledge of program participation might
activate two primary reasons why people engage in WOM:
wanting to help a peer spread the word and feeling like you’re
getting new information about a product that you can share
with others yourself.
32
Findings reported in Sundaram et al., Advances in Consumer Research, Volume 25, 1998.
 This is a theory
Theory of Managed WOM: I am developing
that seeks to account
A Contribution from Relational and for the relational and
organizational dimensions
Organizational Communication of effectively and ethically
managed WOM programs.
Relational basis of WOM: Organizational basis of WOM:
- Trustworthiness - How does an
- Caring/Goodwill organization build
- Experience-based WOM principles
knowledge into its business
-Relevancy practices?
Listening
Empowerment
Engagement
Community

33
© http://www.kennys.ie/Exhibitions/2002/p-oconnell/In%20Deep%20Conversation.jpg
 Word-of-Mouth
Communication Study
Research Blog
http://www.wom-study.blogspot.com

… where you can follow my

research and musings
on the WOM and CGM space.

Follow the development

of a whole class devoted to
WOM and CGM taught at
Northeastern University…
WOM, Buzz, and Viral
Marketing Communication
Teaching Blog
34
http://www.wom-teach.blogspot.com
 Presenter Information
Walter J. Carl, Ph.D.
Department of Communication Studies
101 Lake Hall
Northeastern University
Boston, MA 02115
617-373-4075
I am also an
Advisory Board
member to
WOMMA and a
co-chair of their w.carl@neu.edu
Research & http://www.waltercarl.neu.edu
Metrics Council. Download my latest
research at... http://www.waltercarl.neu.edu/downloads
Disclaimer: Please note that there are many companies and individuals in the WOM and CGM
space not included in this presentation. Inclusion/exclusion is not meant to be an endorsement 35
(or lack thereof) for particular companies or individuals.