Viral Marketing By Chad Thevenot, Katherine Watier, and Team Member #3 Georgetown University, Communications, Culture & Technology Program May 2001

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Viral Marketing

By Chad Thevenot, Katherine Watier, and Team Member #3
Georgetown University, Communications, Culture & Technology Program
May 2001

Word-of-mouth publicity is a centuries-old marketing technique. Once customers had a good experience with a product, they would tell their friends, who would often buy and use that product and then tell other friends – dispersing information and recommendations about the product via a social network. Mary Kay Cosmetics and Amway, brands that relied on social networks to inform potential customers about their products, used this technique with great success to build highly recognizable brands. Technology makes the spread of product knowledge from one person to another faster and more efficient. Today, digital media like the Internet are the new word of mouth networks, which act as easy, additional resources for people to spread the word. "The Net amplifies the power and accelerates the speed of feedback from users to potential adopters." "People have always relied on word-of-mouth to spread the news about products and services. The Internet just speeds things along," says Charlene Li, an analyst with Forrester Research.

Word-of-mouth techniques are vital to marketing on the Internet. Consumers say the primary source of credibility that makes them visit a Web site is word-of-mouth referrals, usually an e-mail from a friend, according to the Internet research firm Jupiter Research. Tim Draper, one of the founding investors for the free e-mail product Hotmail, and a partner with the venture firm Draper Fisher Jurvetson (www.dfj.com), coined the term "viral marketing" in 1997 when he first noticed similarities between the rapid adoption of products via word of mouth and the spread of biological viruses. Draper noted the viral phenomenon after Hotmail went from 0 to 12 million subscribers in just eighteen months, largely because the product included a linked advertisement link for their service at the bottom of every email and offered a compelling service. Viral marketing describes any strategy that encourages individuals to pass on a marketing message to others, creating the potential for exponential growth in the message's exposure and influence. On the Web, the technique has been called "word-of-modem," "word-of-mouse," "networked-enhanced word of mouth," "grass-roots marketing," and "a highly infectious digital sneeze." A virally-marketed product is often said to have "buzz." Fundamentally, viral marketing on the Internet is the simple technological extension of word-of-mouth marketing.

This paper analyzes the different components of Web-based viral marketing, citing examples and establishing which factors are necessary for the widest product adoption and what products are "buzz" friendly. In addition, we analyze the marketing campaign for the independent film The Blair Witch Project, a case that used both online and offline viral marketing techniques. Finally, we look at the future of the technique as the Internet becomes more pervasive, consumers become increasingly savvy, and the "word" becomes both more complex and easier to spread.



Value Proposition

The value proposition of viral marketing is largely related to its use of existing digital networks, which are relatively inexpensive, fast, and easy to use, and often include a global audience. Fortune magazine calls viral marketing "inexpensive and potent." It is easy to target a viral message because they naturally circulate among persons with common behaviors or interests. The technique is valuable for both consumers and companies. Consumers get things they want, such as discounts, free products, or valuable information. Companies like buzz in the on-line arena because it is an inexpensive way to establish themselves, grow their brand, and increase their customer base.

"Viral marketing is a great distribution vehicle but a terrible profit producer," according to an article in Forbes. This is due, in part, to viral marketing's ability to attract eyeballs but its inability to motivate the owners of the eyeballs to become paying customers. "Just herding millions of customers into the corral isn't a strategy," says Ann Winblad of Hummer Winblad Venture Partners.

However, attracting enough eyeballs is requisite for an advertising-based revenue model. Thus, companies that have used viral marketing to gain an explosive growth in the number of users of their free products often sell their products for substantial amounts of money. For example, Mirabilis, a small startup company in Israel, acquired ten million users for their free chat software ICQ ("I seek you") because people were eager to recommend the product to their friends and family members with whom they wanted to chat. In June 1998, American Online (AOL) paid $287 million in cash to acquire the company, despite the fact that ICQ had never produced revenue and its founders seemed disinterested in having it do so. Similarly, Hotmail was sold to Microsoft for more than $400 million in 1998. For both companies, the value of their product at the user level increases in direct proportion to the number of users, and the means of creating the network is directly tied to the marketing technique. This feedback between utility and buzz is the reason for both companies' successes.

For some companies, viral marketing's value proposition is branding. Having a company or product name exposed to millions of people may increase brand awareness, regardless of whether the viral promotion is acted upon. In a survey of 400 companies by IMT strategies, companies reported that the most common reason they implemented a viral marketing campaign was to increase brand or product awareness. Viral marketing may help companies gain first-mover advantage if they can delay revenue maximization and focus on establishing brand awareness and building barriers to switching for customers.

Finally, because of the Internet's unique tracking abilities, it is very easy for viral marketers to monitor the progress of their campaigns. "Viral marketing can show people how well a campaign is doing," says Matt Spiegel, a direct marketing specialist with L90. Important data to analyze are pass-alongs, click-throughs, and customer conversion rates.



How Viral Marketing Works

For viral marketing to be successful, the strategy must include a viral element from the beginning. Not only must the technical aspects be developed and ready to implement, but the marketer must also have a sense of how to seed the concept of the product or service within its target audience. The audience must them be equipped with the tools necessary to spread the word about the product. To create buzz about a product, viral marketers must start with a product that encourages conversation because it is contagious, evokes an emotional response, creates visual curiosity, and/or becomes more useful as more people use it. In addition, marketers must insure that there is some personal benefit for the target audience to become engaged in the marketing effort.

Viral marketing attempts to harness the power of trusted recommendations by friends. "Viral marketing is more powerful than third-party advertising because it conveys an implied endorsement form a friend," says Steve Jurvetson. For this reason, companies should personalize their referral e-mail so that it shows clearly, particularly in the subject line, that it is coming from a friend. Research shows that e-mails from friends are more likely to be opened and read because the sender is credible and because the sender and receiver have common interests. "Just 1 percent of Web site visitors click on banner ads, but between 5 and 15 percept of those receiving viral messages click through or follow the links." "The idea that a critical part of marketing is word of mouth and validation from important personal relationships is absolutely key, and most marketers ignore it," notes Len Short, executive vice president of advertising and brand management at Charles Schwab.

The viral message can spread either intentionally or automatically. Consumers who find a service compelling spread the buzz intentionally when they communicate it to other people. Individuals propagate the marketing message automatically when "a viral component is built into its DNA," or imbedded in the use of the product, spreading the marketing message when they use the service to communicate with their friends and family. For example, Passthison.com, with 6.7 million unique visitors in July 2000, according to Media Metrix Inc., relies on games and electronic greeting cards to lure users. Visitors can send a red heart to the objects of their affection after handing over their sweetie's e-mail address and other marketing information. Like Blue Mountain Cards, users must ask their friends to use the service in order to receive the personal greeting. Those new customers then receive encouragement to reply using the service.

Viral marketers often first target a small group of influential persons within their target audience. Such high-profile, credible persons have been called "cyber evangelists" or "e-fluentials." In Emanuel Rosen's book Anatomy of Buzz, these people are called "network hubs," and in his book Unleashing the Ideavirus, Seth Godin calls these people "sneezers." The idea of key influentials is based on the "diffusion theory, the hypothesis that every successful idea is first embraced by a small group of ‘influencers' before it spreads to the masses," according to Marianna Deal and Pete Abel, senior partners at the marketing firm Fleishman-Hillard. Deal and Abel call such influencers "adoptive connected chatleaders" because they are early adopters, are strongly connected to their communities, and are naturally vocal and credible. A more commonly used colloquialism is "trendsetter." According to Deal and Abel, a viral marketing campaign should be like "a rifle, not a shotgun, approach," in which you develop "sustainable relationships with a few thousand key people, transforming them into an unpaid sales force." According to research by Burson-Marsteller, e-fluentials comprise about eight percent of Internet users and, on average, influence about eight other people with authority, an additional 66 percent of Internet users.

Companies must arm the influentials with the sales pitch and resources to spread the word, such as "refer a friend" links in their e-mail and on their Web site. "[A]rm customers with the right information to serve as your advocate." Influentials need to be satisfied, equipped, and motivated. On the Internet, the marketing message spreads in many ways; via e-mail, chat rooms, bulleting boards, gift or "wish list" registries, and Web pages. These tools must be quick, reliable, and easy to use. For example, companies should avoid bug-prone programs, graphics that take too long to download, or forms that take too long to fill out.

The product or service must motivate people to spread the word. There must be an incentive. These incentives could be in the form of some currency or financial incentive, but they are more effective if the incentives are linked to the product. Kim Brooks of Bardo International defines viral marketing as "motivated word of mouth." Motivations can include:


  • Free goods – such as software or services, e.g. Hotmail

  • Monetary incentive – such as discounts, coupons, or "affiliate programs," e.g. Wingspan.com

  • Cultural Capital – being "in the know" or a trend-spotter, e.g. knowing the plot or ending of The Blair Witch Project

  • Concern About an Issue – usually issue activism, e.g. Jubilee 2000 campaign, which resulted in British Prime Minister Tony Blair receiving 100,000 e-mails about the debt relief issue.

  • Fun or Provocative Stimuli – such as humor, controversy, or contests, e.g. HotorNot.com

In viral marketing, the benefit should involve elements of network scale and effect. There should be some increasing positive network externalities that are created by a larger base of users. E-mail is a perfect example of this type of positive network effects that directly impact the value of the product. E-mail becomes more beneficial to individual users as the number of users increases. As Robert Metcalfe's Law states, the value of the network increases by the square of its participants. Products that harness the power of these externalities become successful buzz products. For instance, services like Napster are only beneficial if more users are online sharing files. It is therefore in the customer's best interest to refer friends to use the service.

The online music downloading service Napster is a classic buzz product with network effects of scale and scope. Buzz about Napster spread quickly as it was marketed to a closely-knit audience obsessed about new music, with high-speed Internet connections, and an abundance of free time: on-campus college students. All three elements led to great buzz marketing and created a substantial database of songs that established a greater benefit for other users. In this case, the network effect was so great it had negative externalities – university information technology departments began to ban Napster connections due to network congestion, and the music industry sought to shut down the service fearing lost profits.

ICQ is another example of a buzz product with scale and scope effects. The customer is forced to reference and promote the product in order to use it, and the network effects increase as the customer base increases – creating a natural and renewable buzz about the product. Within six weeks of making the product available, 30,000 people had signed up, and after six months, one million. This is a true example of network externalities being harnessed to increase the customer base.

At its core, viral marketing relies on human psychology and the power of social networks and the influential hubs of those networks to create buzz. Marketers who want to market their products virally must have a good sense of their audience, how they use technology and how they communicate with each other. For example, the board game Trivial Pursuit successfully utilized product giveaways and prominent network hubs to promote their product. They enlisted prominent radio DJs to ask trivia questions from the game on the radio. Listeners who answered the questions correctly received a free copy of the game. They also distributed sample cards in spring-break hangouts, in bars and mailed game to celebrities mentioned in the questions. During 1984, 20 million games were sold with almost no advertising.


Prerequisites for Using Viral Marketing

In a recent survey of 400 companies by IMT strategies, an e-business strategic firm, 70 percent of companies surveyed said they participate in viral marketing to different degrees. IMT found that the most effective viral marketing campaigns were integrated into the company's larger marketing strategy, not just a random project. Like the larger marketing strategy, viral marketing should be used only after considering the characteristics of the target audience, the nature of the industry that the company is in, the qualities of the marketing message, technological, and other considerations.

The viral marketer needs to consider the audience for the product and how they would normally hear and transmit information about the product. Analyzing the social networks through which word of mouth or word of mouse spreads is essential to selecting which techniques to use. Marc Feldman, who headed the research for IMT, says viral marketers need to consider their customers, where they are in the customer life-cycle, and whether they are ready to be an advocate for the product or company. "Contests or humor may help fuel b-to-c campaigns, but it isn't as consistent with your brand and tone when you're about . . . b-to-b," notes Rick Bruner, coauthor of NetResults.2: Best Practices for Web Marketing.

Companies should adequately consider the nature of the industry. "Some industries – entertainment, music, Internet, and software – clearly have a higher propensity for pass-along information, not to mention a target audience that tends to be Web savvy," said Sandra Gassman, president of Sage Marketing and Consulting in New York. Michelle Slack, a senior analyst with Jupiter Communications, says "Entertainment and e-commerce are two of the most successful categories gaining ground using viral marketing.." Virtual products are especially suited to viral marketing, and in many ways these companies need to commit to harnessing buzz as a critical part of their marketing strategy due to the medium itself.

Generally, viral marketing does not work if the campaign feels contrived or artificial. "The ironic thing is that you can never purposely create a viral campaign that has even a fraction of the success that unplanned spreading has…the truth is viral marketing is more about serendipity than planning and people are smart enough to know when they are being played," said Eric Ward in an article in B to B magazine. Sandeep Krishnamurthy, an assistant professor of marketing at the University of Washington, agrees, "It's an organic beast. The more you structure it, the more it breaks down." The marketing message has to be worthy of being passed along. "It has to be a genuine service that people need," says Ray Simon, author of Mischief Marketing.

Seth Godin, author of Unleashing the Ideavirus, says businesses should build their products around a viral marketing campaign rather than using such campaigns as a marketing gimmick. "I think products that aren't engineered at the genetic level to be a virus will have disappointing results with viral marketing," says Godin. If this is true, it obviously favors new ventures rather than established products.

There are also technological and personnel considerations. Companies should make sure their customers are on-line and are using the software and hardware necessary to receive, and to pass along, the marketing message. For example, AOL, the nation's largest Internet Service Provider (ISP), does not support HTML-based e-mails with their proprietary e-mail software. This limits the kinds of marketing messages which companies may choose from if they wish to have a successful e-mail based viral component. Another challenge for companies using viral marketing is scalability. Companies need to be prepared for server scalability, and may be constrained by an inability to hire qualified people to support company growth to the expanding customer base.

There are a number of mistakes that marketers make when establishing a business plan that includes viral marketing. The classic mistake is to charge a fee for service when the benefits are not easily identified. If the product relies on a large user base to be seen as beneficial, such as instant messaging, than the product should be offered for free or at low cost. Profit should only be introduced once the product has established a large user base, and the fee should be attached to added features and not the basic product. Buzz is a phenomenon that needs to be feed to stay alive. The marketer can sustain buzz by keeping customers involved in product development and promotion of new features, etc., involving new customers in the product and the buzz, and continuing to improve the product to improve customer satisfaction.


Integration of On-line and Off-line Techniques

Viral marketing naturally integrates on-line and off-line techniques because it relies on personal recommendations, through word-of-mouth and word-of-mouse. A good example of traditional word-of-mouth promotion is MCI's Family & Friends program, in which phone customers get a greater benefit if their friends and family are on the same calling plan. Viral marketing campaigns are similar, but harness the efficiency of the Internet, allowing people to communicate via a fast, global network.


In addition, part of the motivation for people to spread the word can be an off-line benefit, such as a discount at a bricks-and-mortar outlet. In addition, off-line activity, such as receiving packages, can help spread a marketing message. "It is no surprise that Amazon encourages its customers to send a book as a gift to a friend. When the recipient receives the book, the packaging contains a flyer for the amazon.com service."

Promoters for teen diva Christina Aguilera used an integrated strategy recently when they identified "street teams" of influential teens, giving the free them free music samples. With the added incentive of perks, such as tickets and discounts, the teams evangelized for the singer in chat rooms, via e-mail, and at schools and shopping malls.


Key Issues

Obviously, one of the biggest issues with viral marketing is spam. "A highly-charged anti-spam sentiment has emerged over the past 12 months, forcing several companies to pull viral marketing efforts," according to a recent article in Adweek. Companies wishing to use viral marketing campaigns need to make sure the motivation they offer persons to spread the buzz is not so great that it encourages spamming. "If you under motivate, you don't get much interest. If you over motivate, you'll have cheating and all kinds of problems," says Kim Brooks of Bardo International.

Privacy is a related issue. Some persons referred to companies by friends do not appreciate companies keeping their personal information, such as their e-mail address. In 1999, the Swedish furniture chain IKEA canceled a viral marketing campaign that offered coupons in exchange for passing on an e-mail postcard after persons referred expressed concern that their e-mail address was being added to IKEA's database for future spamming. Companies should make clear their policy of not retaining the personal information of persons referred, and instead should allow those persons to "opt-in" for the service.

Viral marketing overkill is another major problem. Consumers "are getting wise to the technique as the volume of viral marketing increases." Companies risk annoying or alienating their target audience if their viral marketing campaign is contrived or executed poorly. "[T]here's a viral traffic jam just a few clicks down the Information Highway. Even good friends can be as annoying as marketers if they bombard me too much," said Ellen Neuborne in a March 2001 article in Business Week. Research by Lowe Live and BMRB in January 2001 suggests a significant fall in the number of persons who will forward viral e-mails, according to Marketing Week magazine.

Of course, bad news can travel can just as fast as good news. "Part of the problem lies in the very quality of the Net which makes viral marketing possible – the speed with which information spreads. The information may be positive, deliberately generated by a company or brand. Or it may just as easily be negative and damaging."

Finally, there are technological issues to consider. Viral marketing can involve substantial programming. It also assumes that the target audience will have the technology and skills to participate.


The Future of Viral Marketing

Privacy issues on the Internet will almost certainly be legislated in the future. Such legislation is likely to impact viral marketing, since is may affect the sharing of the personal information of others.

Part of the future of viral marketing may be new and creative permutations of "affiliate programs," in which persons explicitly include promotional materials for and links to a product in their e-mail messages or on their Web sites in exchange for something of value, usually financial incentives. "Stores pay out only for actual sales, but get their logos emblazoned on thousands of sites for free. By tossing in viral marketing, stores hope to have their names inscribed on millions of e-mail messages, too." Also, future viral marketers may hone their efforts to target e-fluentials, those influential persons who help shape the opinions and attitudes of the majority of persons. "As viral campaigns build ever larger communities, those influencers will become more prominent and a more critical part of success." The newest "buzzword" within word of mouth and viral marketing literature is "idea viruses," according to Seth Godin, author of Unleashing the Idea Virus. Ideaviruses are a type of a marketing plan that incorporates traditional word of mouth with viral marketing and establishes strategies that create, encourage and feed ongoing customer conversations about a product. Most ideaviruses are communication based and force the customer to promote the product simply by using the product (evite.com, for example).

Case Study: Marketing Magic

On a budget of less than $100,000, two unknown filmmakers, Eduardo Sanchez and Daniel Mynick, wrote and directed a mock documentary about three student filmmakers who disappear while searching for evidence of a "legendary" witch in the Appalachian foothills of western Maryland. Film distributor Artisan Entertainment purchased the rights of the movie for $1 million in an all-night bidding session at the 1999 Sundance Film Festival. Artisan's team wanted to maximize the film's success, while limiting its marketing expenses to $1.5 million. The film was called The Blair Witch Project.

The marketing strategy for the film is a classic and flawlessly executed example of the ideavirus, and a prime candidate for buzz generation. Part of the horror genre, the film evokes a strong emotional response on many levels. Due to its shaky, handheld, low-budget production values, the film generates visual curiosity, which for viewers used to more polished Hollywood production values, generates its own emotional response – one of displeasure (and in some cases vertigo). As the story unfolds, viewers begin to identify with the characters' fear, another emotional response. Finally, audience members bond with one another "at the water cooler" and discuss the film. While not useful in a practical sense, it has social utility as a way to experience solidarity with the larger group. The network scale effect works in the opposite direction, users experience no tangible benefit by using the network, but certainly experience the detrimental effects of being out of the loop.

The Hollywood concept of "backstory," or history about the characters and setting in a film, was essential to the Blair Witch marketing campaign. In June 1998, before The Blair Witch Project went into post-production (editing), the filmmakers launched a web site, www.blairwitch.com, providing basic information about the film. When Artisan took over the site, the company developed it into a highly effective marketing platform, separating the more traditional promotional materials from the film's "backstory" by posting them on the company web site: www.artisan.com/blairwitch. Artisan's creative team posted the following pieces of "evidence" on the original blairwitch.com site, embellishing the myth of the Blair Witch and the vanished students with the following content:


  • Invented journal entries written by one of the three characters

  • Fictional but seemingly authentic police reports

  • An fictional legend of the Blair Witch dating back to the 18th century

Artisan updated the web site weekly, revealing more information and features in order to build suspense and encourage repeat visitors. The web site became immensely popular, averaging 2 million hits a day. In addition to its online marketing initiatives, Artisan created three trailers launched consecutively every six weeks. Each 30-second trailer built upon the last, with the third timed to be released with Star Wars: Episode I: The Phantom Menace, when movie audiences were at their peak. Artisan Entertainment also created the following promotional items to supplement its marketing mix:

  • A mock documentary titled Curse of the Blair Witch, co-funded by Artisan and the Sci-Fi Channel. Instead of resorting to the typical "making of" documentary, Artisan's ‘mockumentary' considered the phony legend of the Blair Witch, using footage from the production that originally landed on the cutting room floor. This mockumentary further blurred the line between myth and reality. It reinforced one of the central themes of the film, and by allowing the viewers to identify with the characters in the film further established a market buzz. Curse of the Blair Witch aired on the Sci-Fi Channel four days before Blair Witch Project's release.

  • A book titled The Blair Witch Project: A Dossier, published by Penguin-Putnam, which was supposed to be the results of an investigation by a private detective hired by the families of the missing students.

  • A comic book published by Oni Press based on three mysterious (but fictional) incidents from the Blair Witch legend.
  • A soundtrack CD titled "Josh's Blair Witch Mix," which was marketed as a copy of a cassette found in one of the film character's abandoned cars. The cassette was supposed to be a compilation of the character Josh's favorite songs, recorded specially for the drive to the Blair Woods.


This four-pronged media mix generated a buzz because each of the media products generated more unanswerable questions about the film, reinforcing the legend of the Blair Witch while never explicitly stating that the film was entirely fictional. The promotional items focused on the fact that the story was about the making of a documentary. Each of the items was also deliberately vague about the film's plot. The original web site, the film trailers, and each of the items in the four-pronged media mix amounted to "preliminary versions" of the product.

In order to spread the news about The Blair Witch Project offline by word-of-mouth and increase the effectiveness of the viral spread in its marketing mix, Artisan also deployed street teams of young interns who went to venues frequented by the target market, teens and Young Influentials: dance clubs and coffee houses across the country. Once the interns infiltrated these social network hubs, they asked people what they knew about the "Blair Witch" and distributed Blair Witch "freebies" based on the myth.



  • Realistic "Missing" posters seeking information about the three vanished students

  • The Blair Witch wooden stick-figure emblem

  • "Josh's Blair Witch Mix"

  • Artisan also held special screenings on college campuses all across the country to generate buzz in this tightly knit social group.

Artisan's release schedule built on the buzz around the film. Artisan determined that to maintain a buzz for the film once it was released, the film's release needed to be restricted to 27 screens in 24 markets. The theater types Artisan chose reinforced the marketing strategy. The distributor showed the film in art house theaters typically known for choosing documentaries and independent films over standard Hollywood fare. Once again, this remained consistent with the buzz around the film. Amir Malin, Artisan co-president, explained the rationale behind the launch strategy:
"We want to make it a hard ticket. We want people to go to the theaters and have it be sold out. In this summer's cluster of movies, we want to make our picture an event."

On its opening weekend (July 16 and 17, 1999) the Blair Witch Project grossed just over $1.5 million, recovering both the filmmakers' initial $100,000 investment and Artisan's $1,000,000 distribution rights immediately. Playing on only 27 screens, the film grossed $56,000 per theater during the first opening weekend (Friday through Sunday). The number one movie in the country at the time in terms of released prints, the recently deceased Stanley Kubrick's Eyes Wide Shut, averaged barely $9,000 per theater on 2,411 theaters. The graph clearly shows weekend spikes typical of summer weekend movie sales. The spike in revenues during week 3 coincides with the July 30th 800-screen theatrical release (some theaters may have shown the film on multiple screens).

Popularity and revenues increased exponentially. On July 30th, Witch opened on 1,101 screens across the country. In this first weekend of wide release, it grossed $29.2 million and averaged about $8,800 per screen, only $2,300 less than the big release for that weekend, Runaway Bride, which reunited box office powerhouses Julia Roberts and Richard Gere with director Gary Marshall, the team responsible for the romantic comedy blockbuster Pretty Woman. Paramount Pictures released Bride on 3,158 screens, over 100 times the number of Witch's release. Gere and Robert are famous for commanding multi-million-dollar salaries, and Runaway Bride had a marketing budget to match – the film's production budget was estimated to cost $70 million. Julia Roberts reportedly received a salary of $17 million for the picture; Gere reportedly made $16 million. In contrast, the cast of Blair Witch were completely unknown actors who were paid, according to female lead Heather Donahue, "about the same [amount of] money as temping or bartending."

The numbers speak for themselves. The Blair Witch Project was one of the top ten grossing films of 1999, grossing $136.2 million between July 12 and September 14, 1999. In terms of percentages it was clearly the most profitable when compared to Runaway Bride, the next-highest grossing film that summer. Witch's ratio of production budget and marketing expenses to summer gross is nearly 87:1, while Bride's is a disappointing 3:7.

The Blair Witch Project stayed in the top-ten movies rank for nine weeks. This marketing campaign was clearly a rousing success, and created a brand image around both the Blair Witch myth, laying the ground work for a sequel, and around Artisan Entertainment, which now bills itself as the company that brought audiences The Blair Witch Project.

Although viral marketing on the Internet is a powerful force, it may not be as credible as it used to be. According to Salon.com, some industry insiders claim that the filmmakers used their friends to generate Internet buzz – buzz that was about as real as the story. Before the film ever opened, there were already 20 fan sites dedicated to the movie. Two fan site creators, Abagail Marceluk and Alan Ivins, appeared in the Sci-Fi channel special as the two "anthropology students" who discover the three film students' footage.

Real or not, these fan sites are classic online examples of Gladwell's "sneezers," although it seems that on the Internet obscurity works more effectively than prominence, especially when there are many sneezers. Viral marketing on the Internet is a great tool to generate interest from other traditional media outlets. MTV News ran a story on the Witch fan site phenomenon nearly two months before the film's release – a key factor in the film's success with its target market of 13 to 25 year old moviegoers.

The film's incredible box office percentages notwithstanding, the most tangible evidence of the Blair Witch marketing strategy success is the creation of an entirely new branded franchise of entertainment products. Not only did Artisan release a sequel, but the film spawned more comic books, another documentary of backstory on Showtime, a total of 11 books, and a trilogy of video games – not to mention over 150 licensed products such as posters, props, action figures, and costumes for holiday shoppers. The current iteration of the Blair Witch online marketing campaign encourages fans to purchase the DVD or VHS and unlock "the Secret of Esrever" ("reverse," hinting at a plot twist central to the film's climax). In typical Blair Witch fashion, the method behind the madness is vague and generally undecipherable. Fans must return to the site each week to find new clues. However, there appears to be no tangible reward for finding the secrets other than bragging rights.

Although Artisan executed a flawless viral marketing campaign for the first film, it is doubtful that it could ever duplicate the effort. Consumers may be growing wary of viral marketing, especially of campaigns that generate unsubstantiated hype on the Internet. The original Blair Witch movie came along at the perfect time, when the Internet itself was a source of buzz, and dot-com companies were making investors millionaires practically overnight. But the buzz was short-lived. Blair Witch fans appear to have gotten savvy by the time Artisan released the film's sequel The Blair Witch 2: Book of Shadows. The sequel never made the top 50 grossing films of 2000, and it's DVD release on March 13, 2001 barely caused a ripple in the home video market.


Conclusion

"Marketers need to recognize that customers are an additional sales channel, a lead-generating channel, and an awareness-generating channel," said Feldman. Viral marketing is a powerful way to enlist customers in a marketing strategy, and when applied correctly, can boost sales for the right product into the stratosphere and speed the transition from the stage of early adoption to widespread use. The following characteristics are true of all successful viral marketing campaigns:



  • Understand the target audience, craft and test the message, and target influentials in the relevant communities to implement the campaign.

  • Motivate people to pass along the marketing message, but not so much that encourages spamming.

  • Make it easy for people to participate in the marketing campaign.

  • Let people know their e-mail address or personal information will not be used without their permission.

  • Offer a product or service that is worthy of conversation.

  • Have on-line and off-line components in the viral marketing campaign.

  • Make sure the campaign is integrated with the larger marketing strategy and not a one-time incident.

  • Track and analyze the results of the campaign.

  • Don't "rely on incentivizing in the long-term, but build customer loyalty through good value, excellent service, entertainment, or an emotional attachment."

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