Marketers Rely on Word of Mouth More Than Ever


R.J. Reynolds Tobacco Co. scored a coup in the early 1950s when it recruited John Wayne to pitch Camel cigarettes, which promised great flavor that never caused throat irritation.

Wayne was Hollywood's most famous tough guy, and countless young people wanted to emulate him. Celebrity marketing wields a lot of influence, and companies make billions from paid endorsements.

This holiday season, however, 80 percent of big brands will try to influence our purchases not with big names, but with the people we trust the most, including our friends and family.

At its best, this so-called "influencer marketing" is the most honest form of advertising. But it can also be deceptive, with consumers not knowing who's getting paid to make endorsements and influencers misleading companies about their marketing prowess.

There is little doubt, though, that it works.

"People listen to those they trust. When you follow someone on social media, you care about what they say," said Jason Pampell, CEO of HireInfluence, a Houston-based startup that has focused on influencer marketing since 2011.

HireInfluence has worked on campaigns for Gatorade, Ritz Crackers, Southwest Airlines and Entertainment Weekly, helping those companies identify target audiences and generate buzz. Pampell's team generates a marketing strategy and then hires the most effective influencers on the Internet to join the campaign.

For example, Gatorade wanted to market to mothers of kids in sports, so HireInfluence identified mommy bloggers and websites that carry sway over that audience and hired them for the "Gatorade Moms" campaign. Other campaigns involve respected voices on the Internet promoting contests, quizzes or special events that are broadcast live on the Web. Pampell calls this "Millennial Advertising."

"Get people involved. Get them interacting with your brand," he said. "We use these established audiences and influential voices as fuel to deliver that interaction."

Pampell and other influence marketers are trying to reach consumers who have become immune to standard advertising and rely increasingly on the Internet and social media for information about brands and products.

Pricey products

Influencers are particularly important when a consumer is researching an expensive purchase or investigating a brand he or she doesn't know, according to a study by consulting firm McKinsey and Co. Influencers can range from someone we know personally to an online expert whose opinion we respect.

We also influence the people around us. The average consumer mentions 56 brands a week in conversation, according to the consulting firms Deloitte and 22squared. One in three people are introduced to a brand in conversation, and those customers generate higher profits and have a 37 percent higher retention rate.

Social media make everyone a potentially powerful brand ambassador, given the amount of engagement they generate.

'The micro-influencer'

That's the idea behind Snagshout, a website officially launched in July, that offers steep discounts on products in return for reviewing the product on Amazon.com.

"I think this season we're going to see the rise of the micro-influencer; getting the average, everyday shopper to be a brand advocate," said Paul Johnson, CEO of Snagshout. "There are going to be some incredible deals out there for shoppers who are willing to share their opinions of the products they purchase."

Unlike sites that pay for positive reviews, Johnson said, his site is based on a program used by Amazon, and he plans to expand it to other sites. Each sale boosts a company's Amazon ranking, generates reviews and provides customer feedback.

"Sometimes businesses get mad when they get bad reviews," Johnson said. "What we tell them is: 'That's good, you should learn from that, you need to take that feedback and make your product better.' "

The pitfalls

Influencer marketing, though, can potentially mislead consumers. The Federal Trade Commission requires paid Tweets to have the #AD hash tag, and reviewers are supposed to say they got the product at a discount in their reviews. Some influencers, though, don't follow the rules because enforcement is spotty at best.

Companies who hire influencers also risk getting ripped off.

"There are people who went out and bought 100,000 Twitter followers last year, and now they're considered an influencer who you are going to pay $1,000 to share a couple of posts on Twitter," Pampell said. "Know who these people are before you hire them."

Gimmicks still gimmicks

As always, consumers need to beware of marketing gimmicks this holiday season. And just because a product is endorsed doesn't make it good.

Ten years after Wayne promoted Camel cigarettes, doctors removed his left lung because of a cancerous tumor the size of a baseball. Afterward, he promoted the American Cancer Society, where he tried to convince people to quit the product he once promoted.

[By Chris Tomlinson] [Read More] [From Houstonchronicle.com] [Image From Julienrio.com]

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