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10.2 How It Works

Learning Objective

  1. Understand the different types of viral marketing and their differences.

Viral growth occurs when a message is spread exponentially. Viral marketing campaigns work when a message is spread exponentially and it results in a desired outcome for a brand. Viral marketing utilizes electronic means to spread messages. It harnesses the electronic connectivity of individuals to ensure marketing messages are referred from one person to another.

Viral marketing campaigns can be tricky and unpredictable. However, the lure of exponential growthIf growth more than doubles with each iteration, it is exponential., at a very low marginal cost, means that they are being attempted more often.

MSN Hotmail: From Zero to Thirty Million

MSN Hotmail, the Web e-mail service purchased by Microsoft, grew to thirty million members in just two and a half years from its launch in July 1996. A large part of its exponential growth is attributed to the sign-up link that was in the footer of every e-mail sent with the service. When the company launched, every outgoing message from this platform contained an advertisement for Hotmail and a link to its Web site at the bottom of the e-mail. As people e-mailed their friends and colleagues, they were also advertising the service. Recipients could simply click on the link and sign themselves up, and as they continued to e-mail friends from their new account, the message spread within existing social networks and was passed along with little effort from the company. Hotmail went from zero to thirty million users within the first three years, and today has over five hundred million users worldwide.

There are two types of viral marketing campaigns:

Organic Viral Marketing

Organic (or in-the-wild) viral campaigns grow with little or no input from the marketer. Sometimes, a message is passed around in a viral nature without any intention from the marketer. Usually this happens with negative messages about a brand, but it can also be a happy coincidence for a brand if the message is positive.

Organic word of mouthInformation that is passed between people, as opposed to messages from a company to people. is credited with the sudden increase in the popularity of Hush Puppies shoes in the mid-1990s. Word of mouth increased sales from an all time low of 30,000 in 1994, to 430,000 in 1995, and to four times that the following year.

This is an example of an organic viral campaign:

  • It was not planned (though it was very welcomed) by Hush Puppies.
  • Participants made an active choice to pass onTo share content with another person. the message.

When successful, this type of campaign can build tremendous brand equity at a marginal cost. Because the communication takes place directly between consumers, the marketer has to be prepared to let go of their brand so that the message and flow of communication is not restricted. This is vital to ensuring the viral campaign is a success, as people are more likely to try a new product or fulfill the campaign goal if their friend or a trusted source referred them.

Amplified Viral Marketing

Amplified (or controlled) campaigns have been strategically planned, have defined goals for the brand being marketed, and usually have a distinct method of passing on the message (that can be tracked and quantified by the marketer). The Hotmail example above is a controlled campaign:

  • The goal was to grow membership.
  • The e-mails being sent were automatically passing on the message.

A viral campaign can be an important part of an eMarketing strategy. Viral marketing campaigns contribute in a number of ways:

  • With correct planning, a viral campaign can provide plenty of link love for your search engine optimization (SEO) strategy. Campaigns should be built with that in mind. While there might be a microsite created for the viral campaign, ensure that it is easy to link to the main Web site.
  • It can be difficult to measure brand awarenessA measure of how quickly a brand is called to mind., but this is usually the chief aim of any viral campaign. Bear that in mind, and make sure that the campaign is targeting the right demographic and that branding is clear without detracting from the social nature of a viral campaign.
  • Viral campaigns can also drive direct response, from newsletter sign-ups, to collaboration on consumer-generated media (CGM), to purchases that can be directly correlated to the campaign.

Stormhoek and Threshers: A Voucher Frenzy

Threshers is an off-license chain in the United Kingdom. Stormhoek, a South African winery, is one of the brands that they sell. In November 2006, Threshers put a voucher on its Web site offering 40 percent off all wines and champagnes between November 30 and December 10. Stormhoek, which had a large following online through its blog at http://www.stormhoek.com, asked if it could pass on the offer to its audience. Threshers’ response: “Of course, it’s just a blog.” Stormhoek posted the voucher to its blog on Friday, November 24. Hugh MacLeod, a partner in the winery who was also working with Stormhoek on its online strategy, also posted the voucher to his popular blog, http://www.gapingvoid.com.

On Monday, November 27 there were 37,000 downloads of the voucher; Tuesday saw 56,000 downloads; and on Friday, December 1, the day the promotion started, the voucher was downloaded 715,000 times.

Figure 10.1

Source: Used by permission from Stormhoek.

By December 5, the voucher had been downloaded 3.5 million times. BBC News reported on December 1 that “queues have formed at one store while the Threshers Web site has crashed under the strain of demand for the offer.” And within the first five days of the offer, Threshers reported a 60 percent increase in weekend sales, with many stores selling one week’s worth of wine in a single day, queues out the door, and stocks depleted by 80 percent in some shops.

The Threshers Web site (http://www.threshergroup.com) saw 30,000 downloads of the voucher, about 1 percent of the total downloads. Stormhoek found that being at the center of a viral marketing phenomenon saw branding and sales increase. In addition to television and print press mentions, Stormhoek saw sales of its wines increase at other stores, not just at Threshers. There was no promotion or discount at the other stores.

Stormhoek has won awards for its innovative use of social media to disrupt the wine market and increase wine sales, and Christmas 2006 saw that happen once again.

Key Takeaways

  • Viral growth occurs when a message is spread exponentially.
  • Viral marketing campaigns are tricky and unpredictable. But exponential growth means that they are being attempted more often.
  • There are two main types of viral marketing campaigns: amplified (or controlled) and organic (or in the wild).
  • Viral marketing uses people’s electronic connectivity to increase the velocity of word of mouth. People with similar interests, needs, and lifestyles tend to pass on and share interesting and entertaining content.
  • When sponsored by a brand, the message builds awareness of a product or service and can provide qualified prospects for the organization to pursue.

Exercises

  1. Think of an example of when organic viral marketing is appropriate for an advertiser.
  2. Think of an example of when controlled viral marketing is appropriate for an advertiser.