Is Your Brand Seeking to Win Friends and Influence People?
by Ed Keller, July 1, 2009Tags: advertising, ARF, Brands, Ed Keller, Influencers, Keller Fay Group, Marketing, research, Social media, TalkTrack®, WOM, word of mouth
At last week’s ARF Audience Measurement 4.0 Conference, Gregg Liebman, SVP at CNN, and I presented a paper on “The Marketing Value of Influencers,” in which we presented new research in support of influencer marketing. We highlighted three primary reasons why influencers and influencer marketing brings considerable value to marketers:
- Influencers generate reach, making marketing more efficient and effective
- Influencers accelerate product adoption and improve profitability
- Influencers amplify advertising messages via word of mouth, conversations that are more likely to include active brand advocacy
At just about the same time, Brandweek ran a story entitled, “Scientist: Influencer Theory is Bogus,” based upon an interview with Duncan Watts, a Columbia University professor who is now serving as a research scientist at Yahoo.
The debate of whether influencers matter or not has become heated over the past few years. Our research at the Keller Fay Group points strongly toward the important role that influencers play in spreading word of mouth. And now, there is new, recently published academic research which comes to the same conclusion, while refuting the Watts position.
The central position about influencers that was made in my 2003 book, The Influentials, is that “When Americans make decisions today, it’s a conversation. Marketers need to reach the people starting those conversations.” We posited that there are about 1 in 10 Americans who are “market multipliers” – people who are disproportionately asked for their advice by others, and as a result more likely to offer recommendations. They are, we said, “at the center of the conversation.”
Recent research by the Keller Fay Group drills down into the exact role of influencers in word of mouth. Three years of continuous research about word of mouth via our TalkTrack® study have taught us that influencers are 130% more likely than the average consumer to talk about brands on any given day. While representing only 10% of the population, influencers are responsible for more than a quarter of all word of mouth. Clearly they “punch well above their weight.” And when we look at category-specific influencers (e.g., those who are influencers in automotive, or financial services, or travel, etc.), they talk about brands at up to 8 times the average consumer. The evidence is crystal clear that influencers offer a route to efficiency and effectiveness in creating conversation and spreading the word about brands.
Academic studies released recently bear out this view. For example, Professor Donald R. Lehmann of the Columbia Business School and his collaborators published an article, “The Role of Hubs in the Adoption Process,” in the March 2009 issue the Journal of Marketing. It says, “Contrary to recent suggestions (Watts and Dodds 2007), social hubs adopt sooner than other people . . . because they are exposed earlier to an innovation due to their multiple social links.” Further, they say, “Adoption by hubs speeds up the growth process and directly influences eventual market size.”
In other words, people with large social networks matter. According to Lehmann et. al. – and in contrast to what Watts advocates – “The value of a customer to the firm is more than the sum of their purchases, it also includes the effect that some individuals, i.e. hubs, have on others. Such ‘influentials’ have substantially higher value than previously realized.”
Further academic research by Professor Barak Libai of the Faculty of Management at Tel Aviv University and collaborators studies the adoption curve of influencers versus others. Their research finds that influencers adopt new products earlier, and because of this acceleration in the adoption process a firm can increase its profitability by between 6% and 14% by targeting influencers over the alternative of targeting random customers. And a firm can increase profitability by 11% – 44% by targeting influencers via word of mouth versus the alternative of no word of mouth seeding at all. Libai et. al. say that those who have concluded influencers don’t matter fail to take into consideration the social value of a customer (i.e., the profit impact of accelerated adoption).
Some critics of the influencer model have objected to the seemingly “undemocratic” idea of a few “elite” consumers telling everyone else what to think and what to buy. But in a democracy, it has always been true that some people are more involved than others – they vote more often, volunteer to work on campaigns, write letters to the editor, host parties, and so forth. While everyone has an equal right to participate, it is a fact of human nature that some will participate more than others.
The same is true in the consumer marketplace. Some people seek out more information about brands, and share it more often with their friends. Just as political campaigns succeed by effectively engaging political activists, so should marketing campaigns make a priority of engaging consumer influencers.
This post first appeared in Jack Myers’ Mediabizbloggers.com on July 1, 2009.
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