Advertising on the internet is turning out to be a super-powered version of an age-old phenomenon: word of mouth.
The old clich? says that it is the most effective form of advertising, and in a media-saturated age where savvy consumers are cynical about traditional marketing, advice and experience from those we trust has become more important. Enter "internet word of mouth" (IWOM).
Sam Flemming, CEO of CIC data, a company he founded to track consumer IWOM, defines it as "consumer discussions and multimedia content related to brands, products, or services on such online channels as BBS (online message boards), blogs and video channels." It is a precise way of saying "net chatter".
Such data is not to be dismissed. Official figures show that 53 million of China's 123 million internet citizens are BBS users and 20 million are bloggers. BBSes and blogs are driven by bottom-up, user-created content – they are where netizens express their opinions and they are often talking about products and brands.
"Sites driven by user-generated media make up 50% of the top 10 sites in China," Flemming said recently at the Digital Marketing Communication Conference in Shanghai, citing numbers compiled by website-ranking site Alexa.
One of the best examples is the auto industry. Flemming wrote that in September, CIC data collected nearly 4 million messages written on auto-related BBSes in China by over 90,000 individuals; 127,561 messages per day on average.
For one model, Shanghai Volkswagen's Polo economy car, CIC collects over 40,000 messages a month.
Clearly, this kind of content can have an impact on potential buyers. And it's likely to be more trusted than a simple TV, magazine, or internet banner ad.
Data mining
What this means for the industries involved is that measuring consumers' feelings about purchases they have made (or are considering) has never been easier.
Companies used to have to induce their customers to take surveys or rely on several rounds of sophisticated market tests to gauge public opinion. Now more of the public are volunteering such information to boost awareness among all consumers – all the companies need to do is find a way of measuring it.
It also means they have to be vigilant and proactively redress wrongs, as Dell learned in June and July when customers complained that one of its notebook computers had been sold with a different chip than advertised.
The company tried to politely apologize for the error and move on, but user complaints piled up and within a week had turned into a class action lawsuit. Dell was forced to issue a mass refund.
User-created content is at the center of what is referred to as Web 2.0. In the first incarnation of the internet, content was produced at the top (by editors, media moguls, companies) and digested at the bottom (readers, listeners, watchers). Now, everyone is a producer. As Chris Anderson explains in his book The Long Tail, "The traditional line between producers and consumers has blurred."
While it's true that most producers can safely be classified as either experts or amateurs, all it takes to write an "expert" review of a consumer product is to have purchased or used it.
Venture capitalist and founder of CNBlog.org Isaac Mao argues that online marketers are not very effective at hitting their target audiences and that user-generated content can help.
"Blog-based advertisements are becoming hotter because they can generate more authentic impact to end users based on a personal blogger's identity and credibility," he said.
Flemming contends that brands are "losing control" of their public images as IWOM grows in volume.
This growth is a global trend but China is ahead of the curve. Its internet community is growing fast and is already ahead of Western countries in terms of the volume of blogging and BBS posts.
Those who want to ensure the credibility of their brands will have to listen to and engage the wisdom of the crowd.