Cheap Buzz

Industry Standard, The, Sept 18, 2000 by Michelle V. Rafter

Two books spread the word on viral marketing.

Unleashing the Ideavirus by Seth Godin (Do You Zoom, $40) The Anatomy of Buzz: How to Create Word of Mouth Marketing by Emanuel Rosen (Currency, $24.95)

The Internet industry has been enamored of buzz-based marketing ever since venture capitalist Steve Jurvetson coined the phrase "viral marketing" in 1997 to describe Hot-mail's strategy of tagging every e-mail message with a promotion for its service. The self-replicating promotion helped the company achieve an epidemic growth rate of zero to 12 million users in a mere 18 months. Since then, viral marketing has propelled everything from Napster to The Blair Witch Project to legendary success.

Even with all the buzz about buzz, though, many Internet companies still pour the bulk of their marketing budgets into ill-conceived TV advertising (who could forget January's orgy of dot-com expenditures on Super Bowl ads?) and other ineffective channels, like banner ads. Depending on whose numbers you use, last year online and offline companies spent $3.5 billion to $4.6 billion on Net ads. Yet, according to Nielsen NetRatings, average click-through rates for banner ads have fallen to a pitiful half a percent.

There has to be a better way. With investors increasingly focusing on profits, the time is right to do more than just talk about viral marketing. And here to lead the rally are two new primers on the subject -- Seth Godin's flashy Unleashing the Idea-virus and Emanuel Rosen's more pedantic but meatier The Anatomy of Buzz.

Both agree on the basic tenets. Instead of blindly (and expensively) advertising to mass audiences, companies should focus on creating buzz among key potential customers -- early adopters -- and let them market to everybody else.

Godin, who fills his book with infectious analogies, calls these folks "sneezers," whereas Rosen dubs them "network hubs." They could be celebrities such as Oprah Winfrey, influential members of a particular industry or ordinary people involved in their neighborhoods, schools, church groups or companies who consciously and consistently spread the word about new things they encounter.

The trick is to reward such efforts. Give away samples or discounts. Create affiliate programs a la Amazon or run promotions that reward early customers for signing up new users. Post testimonials from happy customers on your Web site. All simple stuff, but according to Godin, "too much work for most sites."

Both authors warn that none of these efforts will work with a lousy product. Hotmail, Polaroid's iZone camera, the new Volkswagen Beetle and the Palm are all top-notch products -- they're simple to understand and use, they work and look great -- that benefited from good buzz. Godin, who founded an online promotions company he sold to Yahoo and authored last year's Permission Marketing [see "Permission Marketing," May 3, 1999], calls these killer products "ideaviruses" because they're easy to launch and spread quickly from person to person until they're ubiquitous, like Napster or The Sopranos.

If you have a great product, give buzz a boost by first giving it away or selling it dirt cheap, a lesson many Net companies already apply. As Rosen relates, the publisher of Cold Mountain gave away 4,000 galley copies to bookstore owners and others to help make the Civil War novel an unexpected hit that eventually sold 1.6 million hardcover copies. Microsoft gave away 450,000 copies of Windows95 before the software was commercially available.

Of course, you can't give away everything. So how to make money? Aim low. Pick a small market with no established leader and use buzz to dominate it before anybody else does. "If you can fill a vacuum aggressively and permanently, it is far easier to extract money," Godin writes. The jury is still out, however, on whether that theory will fly with standalone online retailers and companies such as Napster that don't charge for their services.

Because the Net speeds up communication exponentially, dot-com companies have come to rely solely on online means for creating buzz. Big mistake, Rosen says. For buzz to work, companies need a multichannel strategy. Cisco, he points out, prides itself on connecting with customers online, but also arranges 1,000 offline seminars a year for potential customers, holds even more events for current customers and attends dozens of trade shows.

Likewise, don't rest on your laurels. Once you've successfully used buzz to launch a product or service, leverage it to launch your next big thing.

There may be no such thing as bad publicity, Rosen cautions, but negative buzz can be lethal. Apple was vilified for the Newton, as was long-dead company Momenta for its early '90s pen computer - the device was so buggy that people who got free demo units ditched them, something even a $40 million marketing budget couldn't rectify. For that reason, both authors suggest that companies actively track what people are saying about their products through all media, including on consumer feedback Web sites such as PlanetFeedback.com or Epinions.com.