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  Online Marketing Whitepaper
 

Online Marketing Whitepaper

Introduction

The Imperfect World of Quantifying Website Traffic

Online Advertising Lingo

Necessities for Every Company with a Website

Paid Advertising

Leveraging the True Power of the Internet

Bootstrap Marketing Online

 

A Dated Introduction to Online Marketing*

*Note: This is the original version of a whitepaper that was authored in 2001 by iCondotta's founder and principal consultant, Stephan Aarstol. It's a useful primer, but dated - pre-Wikipedia (2001), pre-Google AdWords PPC (2002), way pre-YouTube (2005), you get the picture...

Viral Marketing

Viral marketing has been a popular buzzword in online marketing during the last couple of years. As ominous as it may sound, it really means nothing more than the online equivalent of traditional word of mouth marketing, relationship marketing, or network marketing. The big news, however, is that the connectivity provided by the web and email have fundamentally altered the ease with which like-minded individuals can communicate. Word of mouth before the Internet and email was an extremely important marketing function and companies usually exercised some deal of control over the whole process. As word of mouth morphed into word of mouse, the power of the network effect grew exponentially plus companies really lost almost all control. Nowadays, customers are becoming one of the most important marketing channels that a company has and effectively leveraging their communication networks is of paramount importance to the success of every company.

Whether or not we’re aware of it, we’ve all experienced the power of viral marketing in one form or another. Some hallmark examples include:

Hotmail – The poster child of viral marketing. A small company offers a handy free web-based email account to anyone with one small catch – every email you send will have a small tagline that reads something like “Get your own free email from Hotmail at http://www.hotmail.com”. Users become sales people and every communication is another pitch. In no time, they have millions of customers and Microsoft acquires Hotmail.

Blue Mountain Arts – A couple which owned a small specialty greeting card company starts offering the ability for anyone to send free electronic greeting cards via email with one small catch – in order for the recipient to pick up the greeting card, they have to link back to the Blue Mountain Arts website where they realize that they too can send electronic greeting cards to anyone. Users become sales people and every communication is another pitch. In no time, they have millions of users and they think, “Hey, all this traffic is probably worth something”. It was.

Amazon – While they already were a substantial web retailer, in July of 1996 Amazon decided to try their hands at affiliate marketing. While they didn’t exactly pioneer affiliate marketing, they definitely were responsible for popularizing the idea. They started offering a commission system whereby any appropriate website could generate a percentage of the revenues of sales that resulted from a direct link from that site to Amazon’s bookstore. Every new site that signed up became a new member of Amazon’s sales force and brought all their customers with them. Amazon went from being a substantial web retailer to being THE web retailer.

Budweiser’s Whassup Guys – Budweiser launches a goofy ad during the Superbowl that essentially coined a new greeting. From there out, every time someone mimicked the ad, they were effectively acting as a spokespeople for the coolness of Budweiser. While this was a traditional network-marketing phenomenon, various online spin-offs surfaced. One popular variation was an emailed streaming media file of a group of grandma’s doing a “Whassup” parody.

While hitting a homerun over the fence like the companies in the above examples is largely a factor of luck, every company should, consider how best to leverage the viral marketing potential available to them. To properly identify viral marketing opportunities, you’ve got to know what to look for and what the critical elements of a successful viral marketing campaign are. Here are the five core components that make a product or service viral:

1. Compelling value proposition – Unless your service or product is compelling, it doesn’t have a chance to become viral. A prerequisite in any viral marketing campaign is to create product or service that represents a compelling value proposition to the consumer. Only then can you begin to focus on the viral question of “OK, now how do I get them to recommend this to their friends and colleagues?” Hotmail and Blue Mountain Arts provided a free service that filled a need that, at the time, were also very unique services.

2. Motivated consumers – The principal difference between a product or service that possesses viral marketing potential and one that doesn’t is that one with viral potential incorporates some form of incentive or motivation for the current user to introduce and promote the product or service to others. Effective motivators include: the desire for respect, the desire for affection, the desire for affiliation with others, the desire to be accepted, the desire to appear cool, material desires, etc. Take a quick peek at Maslow’s Hierarchy of Needs if you need some more ammunition.

3. Leverage communication networks – Viral marketing online is so much more powerful than traditional word of mouth or network marketing primarily due to the fact that the Internet and email are extremely efficient and effective tools of communication. One to many broadcast communication has become available to anyone with a computer and an Internet connection. Any individual can now throw together a website and address the entire online world. Quality web sites focused on specific topics attract like-minded individuals from around the world and suddenly communication networks have become exceedingly more vast and, at the same time, much more relevant. Email, instant messaging, and other forms of one to one communication have also improved both the convenience and effectiveness of existing personal networks.

Successful viral marketing initiatives need to take advantage of these existing forms of communication as well as newly developing communication networks to increase a consumer’s ability to introduce or promote goods and services to others.

4. Frictionless transmission – Once you’ve got a consumer using your product or service, you need to make it slam-dunk simple for them to talk it up to their network of friends and colleagues. Ideally, like in the Hotmail and Blue Mountain Arts examples above, this functionality would even be built into the whole process. By simply using either service, you are spreading the word. Not many viral campaigns are lucky enough to include this type of built in transmission process, so for most viral marketing campaigns the focus is on just making it easy. If you want people to tell others about your web site, it’s a good idea to include a “Refer a friend” email forwarding web form for them to use. The easier it is to spread the word, the better.

5. Scalability – Viral marketing innately spreads like wild fire and the easiest way to kill a campaign is to not be prepared for the enormous amount of growth potential. Running out of product or failing to be able to support the newfound demand for a service will lead to an unfortunate backfire effect. If your campaign relies on internal sources as it grows, make sure to plan for exponential growth. If possible, it’s best to design a viral marketing initiative so that it utilizes the resources of others. Amazon’s affiliate program is a good example of this. Adding ten thousand affiliates in a short period of time doesn’t pose a huge cash flow problem for Amazon because they only have to pay commission on monies that they’ve collected. On the other hand, not being able to keep up with demand could have been another issue, although I think Amazon covered themselves on that point as well. A company like Blue Mountain Arts, started with just two people, probably had to deal with some serious scalability problems in terms of server space just to keep up with their overnight growth in popularity.

The most important thing to remember when attempting to craft a viral marketing campaign is that the product or service that you are trying to promote must be absolutely compelling and unique. In other words, you can’t fake it. Your best bet is to first concentrate on providing an extremely beneficial service or product. Without a rock solid value proposition, no amount of viral marketing finesse will make much of a difference.

Here’s a few examples of viral marketing in action on the web to get your creative juices flowing:

>> Affiliate Marketing

Authored in 2001 by Stephan Aarstol
while Director of Business Development
at AuntMinnie.com