Reference no: EM131053092

CASE

David Hahn has spotted a trend. As director of advertising for the popular online business networking site LinkedIn, he's being asked pointed questions by large advertisers about his ability to help them find "influentials"-those people within the LinkedIn community who are the most likely to go out and spread the word about a particular product or experience. "Some of them are requesting it specifically, while others are more implying it, but it comes down to the same thing," Hahn says. "Marketers are very interested in the value of online social networks, and how leaders in those networks can be used to drive proactive behaviors in the population." Hahn isn't alone in his observations. "The notion of the online influencer is quite the thing today in the marketing world," says Janet Edan-Harris, CEO of Umbria, which monitors chatter in cyberspace communities for corporations wanting to know what's being discussed online about their brands and products. "Companies are incredibly eager to get to those people. Do that-or so the conventional wisdom says-and you'll be in marketing heaven." But new research, as well as growing business experience, suggests that such thinking may be overly simplistic. The effectiveness of using online word-of-mouth campaigns- or using individuals rather than traditional media advertising to spread the word about products-is increasingly viewed as an effective way to reach consumers. But the popular notion that frequently accompanies this- that there are special individuals who hold the key to the hearts of entire online communities is coming under fire. Dave Balter certainly thinks so. Three years ago, Balter, CEO of BzzAgent, a word-of-mouth marketing firm, had a revelation: The so-called "influentials," or opinion leaders, in online communities can't be influenced in a way that accelerates the success of a word-of-mouth campaign. "We actually believed in the idea that influentials drove market trends at that point," says Balter. "But upon closer look, we found out it didn't add up. The sales data of our campaigns didn't match the profiles of the opinion leaders we had targeted, and it really caused us to re-evaluate some of our core assumptions." Today, when a client comes in with the goal of influencing the influentials, "we tell them that's fools' gold," says Balter. "It sounds really great, it sounds really sexy, but the results simply don't fly." This indeed is what Edan-Harris has concluded from her experiences working with online communities. "We say, 'Wait a minute, is this really a correct assumption, that there are individuals on the Internet that have that much influence?' " she says. Her conclusion: "Not nearly as much as everyone seems to think." Despite this, companies are putting significant dollars into efforts to find these online opinion leaders, whether they're bloggers, contributors to discussion boards, or members of online social networks. Indeed, a whole cottage industry has sprung up based upon the notion that all marketers need to kick off a successful marketing strategy with a list of Internet opinion leaders. And with the expanding universe of blogs, online communities, and social networks such as MySpace, Face Book, and LinkedIn, the appeal of this idea has become even more entrenched. There's a growing perception that the increasingly ubiquitous availability of broadband, coupled with the rise in popularity of blogs and online communities, makes influentials even more influential. It's critical to understand, however, that all of these proponents of opinion leaders as drivers of social and commercial trends aren't talking about media stars or personalities, but about otherwise seemingly ordinary members of a community who, through accumulation of knowledge or number of connections with others, act as catalysts for change. Not surprisingly, marketers of all stripes almost at once began trying to take advantage of this-at first off-line, and now increasingly within the online social networks rising in popularity. "The largest companies had already established influence based programs and are now extending that model into the online social networking space," says Matthew Hurst, a scientist at Microsoft Live Labs who follows online marketing trends. "It's not the notion of influence that's new, it's the technology that is now enabling it to a greater degree." Not surprisingly, a rapidly increasing number of companies have leaped into the fray to help firms identify the influentials in cyberspace. Buzz logic is one of them. Launched in 2007, Buzz logic is dedicated to the idea that opinion leaders in online social networks can be identified, and their influence can be measured. An early Buzz logic beta customer is Protuo.com, a Web based career management portfolio service that provides matchmaking between employers and potential employees. Not having the funds to buy expensive marketing spots in TV, radio, or mainstream print media, Jennifer Gerlach, vice president of marketing, hired Buzz logic to find the people who are the most influential in the human resource/employee professional space, contact them, and get them to buzz about the product. "We noticed that once one blogger wrote about our service, then suddenly a bunch of other people were writing about it. All at once, there were reviewers everywhere," says Gerlach, who just snagged a major feature in Inc. that she attributes to the online influentials campaign. She says she can map increases in site traffic precisely to blog mentions, and she views the campaign as a huge success. But despite this apparent triumph, a steadily growing number of online marketing experts would argue that rather than being responsible for the deluge of publicity that Protuo.com is experiencing, the bloggers targeted by Buzz logic were simply tapping into a sort of zeitgeist waiting to happen-in this case, intense interest in how the Internet could be used to bring employers and candidates together more efficiently than traditional job boards are capable of doing. Indeed, a growing school of thought is that influentials aren't so much leading trends as acting as mouthpieces for underlying social movements that are either already in progress or lying fallow waiting to be triggered. Thus, successful marketing doesn't depend so much on finding influential people and seeding them with ideas as much as doing the kind of research that exposes embryo trends, and then helping influentials discover them. This in fact is what Umbria does by focusing on tracking online conversations taking place in discussion boards and social networks as well as blogs. "It's much more important to identify those themes that are gaining momentum than try to find opinion leaders," says Edan-Harris. "You want to ride the wave rather than trying to start one on your own." By listening first to the conversations and being nimble enough to use the Internet to craft campaigns that jump on an existing trend, "you get much better results than attempting to generate your own little epicenter," she says. Protuo.com's Gerlach agreed with some aspects of that. "There has to be a story around your product, and that story has to resonate in the world for the opinion leader strategy to work," she says. Herein lies the problem with swallowing the influentials theory whole cloth. Much of the so-called evidence of how the process works is a matter of reverse engineering. Once something happens-if there's a best-selling book coming out of nowhere, or a surprise political upset-you can always go back to the beginning and find the event or person that seems to have triggered it. You can always tell a causal story in retrospect. Michael Shore, vice president of worldwide consumer insights for Mattel, directs an organization that increasingly monitors blogs, social networks, discussion boards, and forums to figure out what the market might want from toys in general and Mattel products in particular. But unlike many other global consumer-brands companies, Mattel isn't interested in simply smoking out those individuals who are inordinately influential in their online communities and pushing top-down marketing messages onto them. Despite the fact that this has become the strategy du jour in the online world, Shore's philosophy is a more holistic one. "We're not just interested in opinion leaders. We'd consider that too narrow a focus," says Shore, who hired Market Tools.Com to help him develop and get involved with online communities. Instead, he uses the online universe to do what he calls "cultural assessments" that involve analyzing language, behavioral patterns, and values. Armed with that information, Shore says, Mattel gets valuable information from the Internet that it uses to shape future product development as well as marketing campaigns. If there's one thing that everyone agrees on, it's that marketers need to invest a great deal more effort into how online social networks and Internet communities actually work with respect to selling products and services at the grassroots level. "It's an emerging medium, and the rules haven't yet been established," says Umbria's Edan-Harris. "We're still learning what does and doesn't work."

CASE STUDY QUESTIONS

1. How can companies benefit from the "cultural assessments" regularly performed by Mattel? How could the information obtained be used to create business value for those organizations? Provide multiple examples.

2. The case notes that, in spite of disconfirming evidence as to the effectiveness of targeting online opinion leaders, companies are nonetheless increasing their efforts to identify and contact them. Why do you think this is the case?

3. One of the participants in the case states that "you want to ride the wave rather than trying to start one of your own." What does she mean by that? If companies are not starting these "waves," where are they coming from?