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 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:
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”
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
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.
– 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:
Authored in 2001
by Stephan Aarstol
while Director of Business Development