Fascinating article in BrandWeek today about putting a value on word of mouth marketing.
BzzAgent, a word of mouth marketing agency (how’s that for a good gig if you can get it), says they figure an online conversation about a brand is worth 50 cents.
It’s admirable that somebody is trying to put a value on word of mouth and social media marketing, because today it looks a lot like that Smoke Monster on Lost, or SEO pricing circa 1999. But, I’m not sure that 50 cents is a metric that makes sense. Interesting, however, is the fact that a much more rigorous study conducted by ChatThreads Group found a 51 cent average value (based on estimated number of product units sold).
Note: Here is a nice slide deck from Digital Influence Group on measuring social media, via SlideShare
The biggest problem I have with this type of math is that it is so inherently tied to all other facets of an integrated marketing plan. Word of mouth isn’t like search marketing, where you need something, you look for it, and you find it. Via search, I’ve found a company or product I didn’t otherwise know countless times. With word of mouth, it seems more likely that a product or service will be mentioned and I’ll already know it, it’s just a reminder. Thus, it’s not a “new mention” but a “reminder mention” and that’s worth less to me as a marketer.
Further, the biggest fallacy is assuming that all digital word of mouth mentions are equivalent. A prominent post on Trip Advisor or Yelp may get a lot more eyeballs than a similar comment on a small, localized travel site. In that way, digital word of mouth is the same as network TV, radio, or print. The number of people paying attention dramatically impacts the worth of the medium.
(incidentally, Internet advertising whether banners or pay per click is the one exception. You buy as many impressions or click as you want, and the overall size of the site’s audience is somewhat immaterial – one of the reasons I love Internet advertising).
For now, while I applaud the notion of putting a value on conversations online, I’ll stay away from recommending valuations or valuation methods until it shakes out a bit more. I suggest you do the same.