To Tell Or Not To Tell?

This report will stimulate discussion about the role of disclosure in organized word-of-mouth marketing initiatives and invite thoughtful commentary and criticism.

Below is a summary of the main findings…

• For approximately 75% of the conversational partners (the people with whom the word-of-mouth marketing agents engaged in word-of-mouth communication) it did not matter that they were talking with someone affiliated with a marketing organization. Instead what mattered was that they trusted the agent was providing an honest opinion, felt the agent had their best interests at heart, and were providing relevant and valuable information.

• None of the key outcome metrics (credibility, inquiry, use, purchase, and pass-along/relay) were negatively affected by the agent disclosing their affiliation. In fact, the pass-along/relay rate (the number of people a person told after speaking with a word-of-mouth marketing agent) actually increased when the conversational partner was aware they were talking with a participant in an organized word-of-mouth marketing program.

• In over 75% of the cases where a person learned about a brand or product from another source of information (such as a print, radio, TV, or web advertisement), talking with the marketing agent increased the believability of that other source of information. This finding was also unaffected by agent disclosure.

• Prior to the enforcement of the word-of-mouth marketing organization’s disclosure policy (where agents were required to disclose their affiliation in episodes involving an organized word-of mouth campaign), 37% of the conversational partners reported they did not know of the agent’s affiliation.

• For about 5% of the conversational partners who were not aware of the agent’s affiliation with the marketing organization there was a negative “backlash” effect when they found out. These negative feelings could be directed toward the agent, the interaction with that agent, the brand being discussed, and/or the company who made the brand, product, or service. There were virtually no negative feelings, however, when the conversational partner was aware of the agent’s affiliation.
… and key conclusions:

• Participation in an organized word-of-mouth marketing program does not undermine the effectiveness of word-of-mouth communication.

• Disclosure has practical business benefits. It does not interrupt the “natural” flow of conversation.

• Word-of-mouth marketing organizations should adopt a clear policy that requires disclosure. This policy should be implemented with a combination of both education about the practical business benefits of disclosure as well as enforcement procedures.

• Word-of-mouth marketing organizations should pay special attention to interactions with strangers and acquaintances as these relationship types were the least likely to know about agent affiliation and also more likely to have negative feelings when they did not know about agent affiliation.

• Policies regarding disclosure should go beyond requiring agents to disclose affiliation and should have special considerations to make clear the market research aspect of the business model.

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http://www.atsweb.neu.edu/w.carl/downloads/ToTellOrNotToTell.pdf