Advertising 2.0

Overall it is a good white paper - but I especially enjoyed Chapter 2 on Media Democratization and Its Effect on Mass Media. I love the concept of democratized media: how it's all about being bottom-up versus top-down and micro, not macro.

Chapter 3 talks about the power of WOM. Why is it that WOM is always forgotten about or taken for granted? This chapters details stories of how rapidly, and potently, negative WOM can spread on the Internet via blogs. Here's an excerpt:

The value of brands
Of course, brands add value to products, and brands are - and one could argue, will be - created
by advertising, not by blog posts. That is true. But in this hyper connected world, consider
the damage that has been done to brands in the following cases, all triggered or powered by
individuals using their own micro media.

In June 2005, Jeff Jarvis wrote about his recent purchase of a defective Dell notebook
computer, and the very bad customer service he received from Dell, despite having payed
extra for extended service9. He used his own blog to communicate the problem. Jeff started
to receive comments from a couple of other angry Dell clients, and the word was being
spread amongst peer bloggers. Later on, the story was picked up by traditional media such
as the New York Times, The Guardian, Washington Post and Wall Street Journal. Dell
sales stalled, and in October 2005 Dell issued a profits warning. A study revealed that
Jeff Jarvis had indeed had a great influence in creating what was called Dell Hell, which
eventually caused Dell’s stock price to fall. Without any doubt, the Dell brand has been
damaged in this process.

On September 12, 2004, someone posted in bikeforums.net that he had managed
to open a Kriptonite Brand bike lock by using only a Bic pen. The following day, a forum
peer confirmed that post by posting a video file of the lock actually being picked. A couple
of days later, the story ended up on Engadget.com, one of the worlds leading blogs about
technology and gadgets. Dozens of other bloggers followed. Within a week, the story got
into the New York Times, under the headline ‘The Pen is Mightier than the Lock’. Only
after appearing in the New York Times, the company decided to post a statement on its
website, but severe damage to the brand had already been done.

More recently, Blogger Mark Russinovich posted to his blog that Sony’s music CDs
automatically installed digital rights management software on hard discs upon playing
the CDs on a computer, practically hacking the PC’s system. He called it unethical and
possibly illegal. Almost immediately other bloggers picked up the story, echoing it on
their own blogs. Once again, traditional media picked it up and Sony ended up aborting
the sales of 50 CD titles, and replacing all CDs already sold by new, virus free versions.
Fred von Lohmann, senior intellectual property attorney for the Electronic Frontier
Foundation: “It seems crystal clear that but for the citizen journalists, Sony never would
have done anything about this”.12 Once again, this affair has clearly affected the company’s
reputation, at least amongst tech savvy users, which happens to be one of the most
important and influential targets for Sony.

These are three very clear examples of what happens when companies make mistakes in a hyper connected world.

Pretty empowering, huh?

I had to think WOM a lot this summer and one of the vendors I was working with was Talk Marketing (http://talkmarketing.com/home.htm). I thought it was pretty ingenious how they employed PTA leaders, book clubs, or special "influencers" to raise awareness for a product/brand through some good ol' WOM.

Long live WOM.

KSR