From Viral Marketing
Chris Kalaboukis, CTO, SwapSmarts.com
at the incredible success of hotmail, super friend whazzup
videos and other viral marketing techniques, I decided
to do some investigation on viral marketing, how and
why it works, and how and why it doesn't work. Many
people tout the amazing spread of viral marketing messages,
but what company has truly profited from viral marketing?
So I asked the question: Can anyone give me an example
of where viral marketing actually generated massive
let's start with the concept of viral marketing: viral
marketing is simply a new way of describing an old concept:
Word of mouth. Word of mouth sells everything from movies
and books to search engine technology. Viral marketing
takes word of mouth, and applies new tools and techniques
in order to spread the word about a product or service.
The big difference between viral marketing and word
of mouth is reach: word of mouth is local, viral marketing
can be global. The other difference is that with viral
marketing the message becomes the object which is spread,
not the recommendation for the product or service. This
differentiation is key, which illustrates the breakdown
between word of mouth and viral marketing. Viral marketing
is not as effective as most people say it is. Many people
seem feel that this is the only type of marketing they
need to do, it's free and it will bring in millions.
That's true, but only if you are called PayPal, Napster
or Amazon.com and have the money to back up your viral
campaign with traditional marketing.
of mouth is a specific recommendation for a specific
product or service based on a request, or an extremely
positive experience with a product or service.
Marketing concentrates on brand awareness, as opposed
to recommending a specific product or service: it can
only be used to spread awareness of a product or service,
not to sell the product or service. Viral Marketing
is not marketing: it is more akin to advertising.
illustrate, here are a few attributes of successful
The message you are spreading must be free
you can spread the word about things that cost money,
unless they have a small niche or very compelling story,
they will not spread as easily as things that are free.
For example, can you imagine Hotmail (the prime viral
marketing example) spreading as fast or as far if you
had to pay for it when you signed up? Or PayPal?
The message you are spreading is easy to spread (such
as forwarding an email)
are easier to spread when they are self contained, and
the spreader can spread the object using a familiar
tool, like email. Refer a friend forms are good too,
but if something can be made into an object, from a
video clip to a URL it can be passed faster, because
the spreader can use familiar communications tools to
do the spreading.
The thing you are spreading is interesting or funny,
or provides value
item has to appeal to the audience it is going to. If
it doesn't then no one will forward it.
Spreading the thing does not reward the spreader (very
this point is flexible, it truly differentiates a viral
campaign from an affiliate program. The item to be passed
must have enough value in it so that the spreader spreads
it of their own accord, with no monetary incentive.
If there is an incentive, then we have to call the spreaders
motive into question. Would they have spread the virus
had there been no monetary incentive? If so then the
object will have little value to the recipient.
example, in the UK last year, Virgin sent out an email
to 25 people, offering two free theater tickets to the
recipients and to anyone they could refer. They had
20,000 available tickets and they ran out in three hours.
This is a good example of viral marketing. It met all
four criteria above, but as stated before, it raised
awareness of Virgin; it did not help sell theater tickets.
Virgin got press, attention, their message was spread,
but did they make any sales directly related to the
viral marketing piece? This is unknown. Did they spend
a ton of money to buy those tickets: yes, unless they
owned the tickets. If you go by the adage that viral
marketing is advertising, it's OK, because the main
purpose of advertising is brand awareness.
Marketing = Brand Awareness
that's the nutshell: there is no direct connection with
viral marketing and sales, just like there is no direct
connection between advertising and sales. However, there
are ways in which you can build a connection between
viral marketing and sales.
Two Tier System
two tier system: give away a subset of your product
for free, but charge for the "full version" or give
away a free version of your product and sell an enhanced
pay version. For example, lets say that you give away
a free monthly newsletter on topic X which is 8 pages
long, then charge a fee for a "extra" or "expanded"
version of the newsletter, which is double or triple
the length with more information. The danger here is
that this could backfire if you provide the wrong balance
of features in the pay vs. free version. For example,
readers of the pay version may find enough value in
the free version and not enough additional value in
the pay version in order to keep subscribing.
this example, you are a garden tool retailer. You email
a few people on your opt-in list and tell them they
qualify for a free packet of seeds. You give them a
link to a choice of 10 or twelve types; let them choose
the ones they want. You then send out the free seeds
with some sales material - you tell them to tell their
friends to claim a packet of seeds in the same way by
hitting the web site. You may lose money on the seeds,
but could be the first company they will think about
when they see that sunflower in their garden. They may
think of you when their shovel breaks. If not seeds,
send something else. You do not have to send out expensive
items. Seeds as in the example will go in the mail with
a few flyers and a small catalog.
if the free thing that you are spreading is a discount
for your product or service? In my opinion, this is
the most effective method to tying sales to your viral
marketing system. For example, let's say that you sell
computer training manuals. You send a note to your opt-in
email list, go to this website and sign up for a 20%
off coupon on any book sale. When they hit the site,
encourage them to refer this offer to a friend, where
they can enter a friend's email address in order to
send them the 20% off offer as well. Ensure that the
person who is doing the sending does not get a discount
just for sending, but only for signing up. When the
friend signs up, they can do the same to their friends.
Don't worry about the amount of coupons this type of
campaign eventually generates: every coupon which goes
out could lead to a sale so the more, the merrier.
every product or service can be sold via viral marketing.
Viral marketing sometimes involves an expense but when
used effectively, it can reduce your costs. Remember
that viral marketing is NOT about making more sales,
but a branding exercise. It doesn't have to be a product
that is custom designed to spread virally, it just has
to be something worth talking about.
Kalaboukis is CTO of SwapSmarts: http://swapsmarts.com
Chris has 17+ years of experience in internet, information
technology and business development with web design, wireless,
high-speed internet, cable television and entertainment