Sunday, April 19, 2009

Smirnoff: Asymmetric Marketing with Buzz

This week finds me in a gangsta kinda mood. So it was with Smirnoff when they commissioned this video gone viral: Smirnoff Tea Partay

Johnson (2009, p. 26) reports that Bartle Bogle Hegarty produced and released this made-for-YouTube video in August 2006. She has it ranked 6th in viral videos with 4.8M hits. She quotes Mel Peters, creative director at Citrus, about Smirnoff’s viral marketing:

“This is a great example of how the advocacy of followers can lead to an ongoing presence for a brand in this crowded space. That it continues to engage with the YouTube community is a testament to its success! “

Hawkins, et al (2007, p. 249) note that viral marketing is an online strategy to generate buzz and word of mouth (WOM). Buzz is an idea contagion that “[creates] an exponential expansion of word of mouth.” It is low cost but they go on to say (p. 248) that such strategies must be used with care so no miscommunications diminish the brand. Taleb (2007, p. 220) would say idea contagions are fractal as well as exponential.

Fractal worlds are winner take all. They follow a scalable power rule, something like 10% of the videos capture 90% of the traffic, and 10% of that top 10% capture 90% of that 90%. In such a world the top 1% owns a lot, 81% in my example. For WOM marketing online, this means you front $600K to produce a video but most times it doesn’t hit.

Chandler (2007, pp 27-9) also says viral marketing is fractal but he is more optimistic. With the advent of social media “the potential for viral, word-of-mouth marketing becomes enormous.” Not everyone is so optimistic.

Freedman (2006, p 81) quotes Dr. Patti Williams at Wharton that “the evidence you can go from online talk about a product to sales is really limited.” An example used is the movie Snakes on a Plane that had a lot of buzz online but a lot of fizz at the box office. To be fair, movies are one of the few categories where traditional advertising is more effective than word of mouth anyway, according to Hawkins, et al (p. 242).

Although not an optimist, Taleb says that living today requires a lot more imagination because it is a world dominated by extremes and the unknown. He advises us to seize asymmetric opportunities like this where you make a series of small bets that you will lose for the occasional big payoff. This is the most effective strategy in the world we are rapidly becoming.

Hawkins, et al (p. 246) say that other driving forces for word of mouth strategies are fragmenting markets and consumer skepticism. With all this said, I think buzz is no baseless fad. Unprecedented uncertainty invites unprecedented imagination. If you try to create buzz and keep persisting, every once in a while you become a playa like Smirnoff. In the meantime, you need to manage expectations.

Chandler, Doug (May 2007) Web 2.0: Buzzword or Bonanza. Electrical Wholesaling. Retrieved on April 17, 2009 from EBSCOHOST

Freedman, David H. (Dec2006). Everyone is chasing Internet buzz. But be careful. Online hype doesn't always deliver. Inc. Retrieved on April 17, 2009 from EBSCOHOST.
Hawkins, Del, David Mothersbaugh and Roger Best (2007). Consumer Behavior. McGraw-Hill/Irwin.

Johnson, Celia (March 6, 2009). 10 of the Best. BANDT-COM.AU. Retrieved on April 18, 2009 from EBSCOHOST.

Taleb, Nassim Nickolas (2007). The Black Swan. Random House.

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