Social Word of Mouth Marketing

As social networking explodes on the scene I’m wondering about legitimate vs questionable marketing tactics that involve one’s social network.   Here at the JoeDuck blog I’ve avoided advertising (though I have taken a few liberties with posts that help rank other sites or promote friends, etc).

At my commercial sites I’m more aggressive with advertising and find it’s very hard to decide what levels of advertising are best suited to all the factors that come into play such as generating revenue, being honest,  keeping Google happy, etc.    Although I increasingly buy into the idea that “user friendliness” is a good guideline I don’t think it’s the best one from a revenue standpoint.   Even Google, which I think built a grand online empire partly on the basis of limiting the advertisements around search,  has very gradually increased the aggressiveness of their advertising at some “user centric” expense such as the ads that appear on top of the organic listings.    Although Google insists they are clear about identifying advertising the proof is in the perception and many people still do not understand the difference between clicks when Google is getting paid and when they are not.

I don’t object to Google’s current standards which I think are more than reasonable, though it’s always annoying to hear them pretend (or think delusionally) that their only consideration is optimizing the *user experience* without regard to revenues.   That would not be good business and arguably would deprive them of revenue they can use to provide the raft of great free services we enjoy from Google like blogger, search, mail, maps, and more.

But the real point here is to find a balance between social networking and marketing.    I certainly don’t want to pester people with advertising after they have nicely  come to Twitter or the blog to “interact” about politics, technology, or travel.     But are there appropriate advertisements that do not offend people?

More importantly, how should one handle paid or unpaid endorsements of businesses?     Over at Technology-Report we are now sponsored by Ipswitch Imail  Server, an Enterprise email system.   What’s really intriguing me is at what point one crosses the line between using and abusing the relationship you have with people to promote your business “allies”.  The link I just provided helps them.  I think that’s fine but some might say it’s using the blog inappropriately. Adding “nofollow” to the link would tell Google not to consider the link as an endorsement of the company but I’m happy to endorse them – they are smart enough to sponsor our Tech blog so they must be good, right?

I think the best working rule here at the blog is transparency, where people know the money relationships between you and those you talk about.   For stocks I use a disclosure blip, for companies an explanation of the relationship.  However for websites I’m not as transparent and I think I need to reconsider that and provide more disclosure than I have in the past to help combat the growing “economy of lies” that is far more pervasive than we tend to think.

From bank lending and “promotional offers” with fine print that traps even savvy borrowers to blatant phone credit card ripoffs that prey on the gullible to the Madoff stock scandal to bogus “get rich quick” training programs, the “economy of lies” is everywhere.    Online, it becomes even more difficult to check credentials and make sure an offer is real.

Then there are the “somewhat misleading special offers” which I think may be impossible or even undesirable to combat.    For example I’m shopping for Las Vegas hotels, flights, and show tickets and notice there are often dozens of offers for the same rooms, each with different rates.  Although the conditions vary a bit, basically these are marketing experiments designed to optimize revenues and collect information for the future.   Not perfectly “honest”, but not scams.   I’ll talk about this more at my Las Vegas Travel blog.   Hey, see, there’s a tiny SEO helpful pitch for my own site – is that legitimate?

An interesting idea – though bureaucracy alerts are kind of sounding for me now – might be to create some sort of volunteer disclosure standard that was monitored by a third party.    For example no site could endorse more than one product of the same kind.    Sites that abided by those rules would be listed and allowed to slap up a logo, those that did not would not.   Policing this probably could be done via an online “complaint” system, and the neat part would be to help screen out the huge number of junky sales sites that have no content of value and offer dubious offers.

Still, that option does not really seem workable on a grand scale because too few would participate.

9 thoughts on “Social Word of Mouth Marketing

  1. Pingback: Social Word of Mouth Marketing « Joe Duck « Unemployment Killer’s Daily Blog

  2. We are surrounded by marketing campaigns: product-placement on TV shows, fake medical journals from major publishers, grass-roots organizations created and run by lobbyists, patient-support groups controlled by drug companies, etc.

    I’ve used the example before of a craps dealer mentioning his favorite barbque sauce on his blog. That is fine, but once it become a paid placement its propaganda. The trouble is so much modern commerce relies on socially trendy concepts with promoters in the background. Bands, nightclubs, bars, restaurants all have promoters these days. And blogs have these idiotic touters spreading ridiculous posts to push products or websites in the same fashion that spam emails have some fake content to get past filters.

  3. FoolsGold thanks for checking in as I think you have a very good sense of how a well-informed person views the ocean of pitches one encounters every day.

    I think you’ve suggested a reasonable difference between imporatance of paid and unpaid endorsements. In many ways we are almost numb from paid celeb endorsements though there are even problems with unpaid. I really like Oprah but she seems to me to be not nearly critical enough when hearing about certain systems for health or wealth or personal power.

  4. Hi Joe,

    You say, “But the real point here is to find a balance between social networking and marketing.” This is a real issue for bloggers who want to be transparent – as well as for businesses who want to be informative while promoting their own services.

    We developed a new approach to capturing & facilitating local/social WOM marketing. It’s a social network called “YouGottaCall” (word of mouth starts with “You gotta call 🙂

    We’re running a test market in central CT while we develop Facebook integration and additional functionality. But you’re welcome to check it out and let us know what you think.


    – – Tim Tracey, Founder

  5. Sounds like the hucksters who used to do Multi Level Marketing scams involving actual products are doing Muti Level Marketing scams involving cyber-dollars and local goodwill.

  6. > the “economy of lies” is everywhere…
    It sure is. Even inside the Madoff Ponzi Scheme there appears to have been “investors” who soon realized what was going on and demanded higher rates of return than others were receiving.
    For a long time con-men have been making use of “canaries”: shills paid to sing the praises of some product or franchise or something. Now everyone is confronted by canaries only instead of fraudulent sales practices its now known as “social marketing” or “WOM”. After all, if its got an acronym or buzz phrase it must have some merit to it? Well, whether its Oprah, Oprah’s guest, The Masked Blogger, or an anonymous commentator on TheMaskedBlogger who offers me the magic cure-all elixir for one dollar, my response is the same: You drink it!! And any site that keeps offering me sales pitches disguised as unbiased comments, won’t be getting return visits from me.

  7. >no site could endorse more than one product of the same kind
    I think that something like this would be unworkable. Who is to say what constitutes an endorsement rather than merely a favorable comment. Also I think a blogger might indeed have an honest opinion wherein he favors more than one brand or more than one restaurant of a certain type. After all, if you happen to really like Pizza you may have a favorite restaurant but you probably patronize quite a few others and hold favorable opinions of them. If you were to recommend a certain casino for the quality of their waitresses does that mean you are prevented from expressing an appreciation of the attractiveness of the waitresses in another casino?
    I think the real test would relate to any payments received from the casino in return for the comments.

  8. The updated FTC Guidelines Concerning the Use of Endorsements and Testimonials in Advertising are expected to pass later this summer, possibly with some modifications. If the plans are approved, the FTC will actively go after bloggers who fail to disclose if they’re being compensated for their words.
    Link to guidelines:
    Ofcourse this would apply to the bloggers but it would be difficult to prove that comments in the blog from touts were actually the work of the blogger.

  9. >but Oprah seems to be not nearly critical enough when
    >hearing about systems for health, wealth or personal power.
    Is it she who is not critical enough, or her various producers … or is it simply that Oprah and her producers know that her audience is not critical enough and have decided to cater to the nutcase crowd?
    America has always sold far more salted peanuts than caviar. And advertisers know that. So do bloggers. Bloggers seeking revenue via Google Kickbacks (my new name for a variety of Google Ad Placement schemes) also know that dumbing down can be profitable even though it annoys the elite readership.
    Mickey Spillane’s famed “Hemingway who?” enraged Hemingway but it entertained millions. Ofcourse there were those who truly wondered. Those who didn’t know who Hemingway was probably are authoring highly profitable blogs now and running social media marketing campaigns and product placement companies.

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