Word-of-mouth (WoM) has influenced all my mobile phone contracts, where I took my wife on Valentine’s day and the last jar of instant coffee I purchased. It has for you, too, probably. Maybe not those exact items, but you’ve been influenced by people saying that they had a great meal here, that you really need to get some X and their holiday in Y at the Z hotel was fantastic.

No need to be ashamed. It’s the easiest and best source of advice in most circumstances. Nor would it be an appropriate subject for this blog.

A recent McKinsey Quarterly article (registration required for this venerable organ) focusing on how marketers might measure and evaluate WoM through social media and other means, however, is definitely of interest. It’s entitled ‘A new way to measure word-of-mouth marketing’.

The Marketing blog at Brand Republic has already had a few stabs at this piece of tosh, but I felt morally compelled to join the pile-on.

The article shows how important WoM can be, especially in areas where there isn’t an established market, like many technology sectors:

In the mobile-phone market, for example, we have observed that the pass-on rates for key positive and negative messages can increase a company’s market share by as much as 10 percent or reduce it by 20 percent over a two-year period, all other things being equal.

It’s at this point, sadly, that the article starts turning from informative to utter nonsense.

As is ever the truth in editorial, there must be a list of three and long words. McKinsey identifies three 4-5 syllable types of WoM influence:

Experiential: your mate tried it; it was rubbish/great; s/he tells you about it.

Consequential: brands put out messages (e.g. ‘this face cream will make you look younger’). People believe it and pass it on.

Intentional: appears to refer to product placement or buzz marketing.

From here to insanity. McKinsey ‘develops’ a theory of ‘WoM Equity’, which everyone else calls ‘Share of Voice’ but <snark>they wouldn’t be good analysts if they didn’t make up new words for things we already know about</snark>. So what is this revolutionary new formula? WoM value is:

the average sales impact of a brand message multiplied by the number of word-of-mouth messages.

Colour me gobsmacked. This is revolutionary stuff indeed.

No, it isn’t: it’s bullshit. Nearly 3000 words to say “People pass on their opinion about good and bad things. Agencies can try to influence this by creating clever stuff people will pass on. You should measure it by multiplying the (undefined) impact of the message by the number of times it is mentioned”.

The first two conclusions are fine, if inane. The formula is bullshit on so many levels that I don’t know where to begin.

• we still don’t know from any of this what makes an ‘impactful’ message, other than it might be like the Cadbury’s Gorilla campaign (which appeared shortly after the Cadbury’s food poisoning scandal, so sales would always be significantly better than the previous quarter).
• they’re saying a clever advert is more important than a genuine conversation. Really, always?
• and that life-long loyalty is less important than a quick hit?
• isn’t this WoM stuff about your brand’s reputation to at least as great an extent as flogging stuff?
• a model based on interruption, then, rather than interaction or engagement? Are you sure that’s what the Cluetrain is about?

I did quite like their chart (below), though.

picture credit: Mareen Fischinger

For me, the stand-out presentation was the case study regarding the launch of Virgin America, a new internal airline for the States and part of the Virgin group. It was founded in 2004 and started flying in September 2007. How come the launch took over three years?

As the presenter, Alex Hunter (Virgin’s Head of Group Online Marketing), pointed out, you might imagine that this would be a piece of cake. Virgin is a massive international brand. The group’s Virgin Atlantic service is well-known for being good quality and reasonably priced.

Not so. In some respects, the brand’s fame worked against them. The proposed launch met with loud protests to the US Department of Transport from the existing internal carriers. Virgin was a foreign company, they argued. Allowing them to launch would directly damage US businesses. It appeared (quite rightly) that a lengthy fight would ensue.

Virgin was hamstrung in two ways during this period. They couldn’t unveil the new planes’ impressive features and specifications – for all they knew, they’d be completely out-of-date by the time they launched. Nor could they use Richard Branson as a brand ambassador – his nationality was exactly the reason for which they were facing problems from the DoT. Also, money was more of an issue than you might imagine: they had already bought the planes and empty planes are a very expensive liability.

Legal fencing, defencing, shilly-shallying and fence-sitting ensued, for months. Finally, on December 26 2006, the DoT delivered its verdict: Virgin America would not be allowed to fly. This was a black day for Alex and the company. To that date, the Department had never reversed its decision on such a matter.

So Virgin decided to take the fight to the (metaphorical) streets.

They submitted a time-lapse video of one of the planes being painted to YouTube. Over the weekend, it garnered 200,000 views and found its way to the front page of digg. It wasn’t an especially remarkable film from a technical perspective, though at that time, there was nothing like it (all their rivals have since copied the idea, apparently).

They launched a blog called Let VA Fly (now defunct), unveiling all the sophisticated new features on their planes. At this point, they felt they had nothing to lose, so they might as well. They included an online petition, and forms which would create and send a correctly worded and legally valid complaint to individual users’ representatives, senators and the Department of Transport. Technically, it was a fairly simple site, based on open source WordPress software. But it did the job.

Perhaps because the incumbent US internal airlines are so very terrible and anything better sounded like Nirvana, perhaps because it was pitched as a classic David and Goliath story, the blog was a great success.

They decided to launch a competition to let readers name the first eight planes, then capitalised on this by specifically inviting blogosphere celebrities and idols, Stephen Colbert and Cory Doctorow, to name two (Air Colbert and Unicorn Chaser, since you asked). They created T-shirts and gave them away. They put one of their planes into the San Francisco Valentine’s parade.

Perhaps crucially, they managed to get other online communities to do much of the marketing of the site, and driving people to sign the petition and send form letters, for them. The site or posts on the site hit the front page of digg eight times. Realising that community was clearly sympathetic, they invited Kevin Rose and Alex Albrecht to film their diggnation video cast on board one of the grounded planes, driving scads of geek traffic to the site. Later paid and unpaid spots on diggnation worked equally well.

In total, 75,000 letters were sent to the authorities and 30,000 people signed the petition. It was enough. In September last year, the DoT reversed its decision and the service took off.