A_Proper_Examination_Into_a_Major_Twenty-First_Century_Advertising_Phenomenon__Viral_Marketing

A Proper Examination into a Major Twenty-First Century Advertising Phenomenon: Viral Marketing By: X X X Communications Theory and Research April 21st 2008 The Hanso Foundation: The Key to Human Development' Looking through Monster.com and it’s thousands of opportunities for employment, one may find themselves at Hansocareers.com, a functional company website seeking employees for job positions within the elite Hanso Foundation. These job descriptions include titles and detailed descriptions for jobs ranging from Organ Courier (in Santa Barbara, CA), to Simian Veterinarian (in Zanzibar), or even an Anger Management Director (in Seoul, South Korea). Investigating the Hanso Foundation’s main website, one would find a detailed company history, as well as biographies for some of the top tier members of the Foundation. But what, exactly, is the Hanso Foundation' The official company mission statement is as follows: The Hanso Foundation stands at the vanguard of social and scientific research for the advancement of the human race. For forty years, the foundation has offered grants to worthy experiments designed to further the evolution of the human race and provide technological solutions to the most pressing problems of our time. The Hanso Foundation: a commitment to encouraging excellence in science and technology and furthering the cause of human development. Such an idealistic, pristine company with such a bold mission statement would be on the threshold of many eager scientific studies, inquiring minds, and potential news outlets. But as pristine and credible as the websites and press releases are, the Hanso Foundation is a detailed and highly realistic hoax. That’s right; the Hanso Foundation and even it’s employees, such as the highly outspoken founder and CEO, Alvar Hanso, are nothing more than believable works of fiction. Designed around an intricate template, both Alvar Hanso and the Hanso Foundation are just two high-level components within a major mass media viral marketing campaign designed by the American Broadcasting Company (ABC) to support their newest television mega-hit, Lost. Defining Viral Marketing We are now eight years into the twenty-first century, and our world is clearly within a growing snowball of change. Cultural boundaries are being built and destroyed like never before, subcultures are expanding and contracting, and trends seem to appear and disappear. With consumers showing an ever-increasing resistance to more ‘traditional’ forms of advertising (such as TV commercials or newspaper ads), marketers have likewise begun to develop new and interesting strategies to combat stagnant and increasingly unproductive methods of advertising (Dr. Ralph Wilson, Six Simple Principles of Viral Marketing). There are many new trends being created by the worldwide advertising community, including in-depth, interactive campaigns and viral marketing. Viral marketing, in essence, is ‘a marketing techniques that uses pre-existing social networks to produce exponential increases in brand awareness, through self-replicating viral processes, equivalent to the spread of a computer virus. It can often be word-of-mouth delivered and enhanced online; it can harness the network effect of the Internet and can be very useful in reaching a large number of people rapidly.' A relatively new form of advertising, viral marketing previously held very few in-depth studies and few statistics to reveal the validity of such a contemporary medium. These dated studies revealed that social networks could indeed affect the creation and/or adoption of varied innovations and products (Diffusions of Innovations). Until recently, however, it has been difficult to measure the influence of techniques – such as viral marketing – due to both the newness and spontaneity of viral advertising. Also, there are key factors to include, considering poor use of viral marketing and error of ration. In Knowledge-sharing and Influence in Online Social Networks via Viral Marketing, authors Subramani and Rajagopalan note that “there needs to be a greater understanding of the contexts in which viral marketing strategy works and the characteristics of products and services for which it is most effective. This is particularly important because the inappropriate use of viral marketing can be counterproductive by creating unfavorable attitudes towards products. What is missing is an analysis of viral marketing that highlights systematic patterns in the nature of knowledge-sharing and persuasion by influencers and responses by recipients in online social networks.” To better understand the practice – and the research supporting the finer details of viral marketing – one should first understand the viral nature of such an ambit. Understanding “Viral” Marketing When referring to viral marketing, some may misunderstand it to mean a distasteful idiom. After all, anyone who refers to themselves as a “Viral Marketer” could raise quite a few eyebrows in a social circle where viral marketing was not known. Who can blame them; the word “viral” doesn’t seem to convey a sense of safety or comfort – it does quite the opposite. Taking its name from the scientific term virus, viral marketing is named for a truly a sinister thing. The “organic” and simplistic virus is a word associated with illness and potential doom. They are not quite dead, but not quite alive; they exist in that quasi-netherworld between real world horror and medical-disaster films. But as scary as a virus is, it is also a unique and cunning monstrosity. A virus has a way of remaining unknown, living in almost molecular secrecy, consuming the host (actually, the hosts’ cells), turning the cell’s own microscopic components into virus-churning factories. Constantly replicating, the alive/dead virus causes destructive damage with overwhelming numbers and exponential growth patterns. The strange and curious thing about a virus is that it doesn’t reproduce with a mate; it just replicates, again and again and again with geometrically increasing power, doubling with each iteration. What can begin as a single virus can soon cause a population explosion of thousands with just a few generations. Taking this idea to merit, viral marketing strives to do the exact same thing. To better visualize the concept, please see the simple diagram below. O OO OOOO OOOOOOOO OOOOOOOOOOOOOOOO OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO OOOOOOOOOOOO Each line represents a single generation, and what starts as one virus in generation one (G1) can soon become 512 viruses by generation ten (G10). Imagine if the generation continued into the hundreds – or even thousands! Clearly, a viral population can expand to considerable lengths in just a few generations. Similar to the biological components of a virus, “viral marketing” is a strategy that encourages individuals to pass on a message to others, creating the potential for exponential growth in the message’s exposure and influence. With such a new and powerful tool at the advertising field’s access, viral marketing is marketing to a wider audience within the ever-changing twenty-first century. Marketing to a Wider Audience in a New Century Word of mouth is a powerful tool in the worldwide community, especially when it comes to making purchasing decisions. However, it is also an incredibly difficult tool for advertisers to tap into. Some services used by individuals are obvious candidates for viral marketing, making the advertised product a part of the communication itself. For instance, e-mails sent through Hotmail and Yahoo have fast adoption curves. This is because all e-mails sent through the services contain an advertisement for the service (and because they offer free e-mailing services, rendering a positive net market). By mid-2000, Hotmail had over 66 million users, making it the fastest growing media company in history (Hotmale, Wired Magazine). However, most products cannot be advertised in such a manner. Thanks to on-line retailers, the choice of products available to a consumer has increased to a level where anyone can get just about any product, just about anywhere. Not only is the variety of products expansive, but one observes what is called a “fat trail” phenomenon, where a large fraction of purchases are relatively obscure items. Companies like Amazon and Rhapsody are reporting that 20 to 40 percent of total company sales falls outside of their top-ranked products. This rule, known as the 80-20 Rule, states that the top 20 percent of the products account for 80 percent of the sales. Some research studies are finding that the numbers are even higher, falling within a 60-40 or even a 50-50 range. (Viral Manager.com). With varied research revealing that niche products are a wide variety of the goods consumed through such services, it seems impractical to use ordinary means of advertising. Therefore, using forms of advertising such as viral marketing, advertisers are able to target markets and demographics in new and different ways, ultimately benefiting both merchant and consumer. Mass Marketing vs. Viral Marketing Imagine in your mind’s eye a tiny television set. Then imagine hundreds of lines expanding out of that television set, all the lines traveling in different directions. The image you are now seeing is probably a proper representation of mass marketing. To begin mass marketing, a particular ad buy will expose the client’s message to some large number of people, represented by M. Of that number, each individual will respond to the message in a positive way (by purchasing the product, changing their behavior, or simply developing a positive and favorable impression of the brand) with some amount of probability, represented by P. The total number of expected “conversations” generated by the investment in the ad buy is simply t, with the final marketing equation represented as: t = PN Therefore, it is understood that traditional marketing is essentially a matter of increasing either P (by creating persuasive, informative, targeted, entertaining, or even memorable ads), or N (by exposing the ad to as many people as possible. The viral marketing model is quite different, however. As explained in Viral Marketing for the Real World by Duncan Watts, Jonah Peretti, and Michael Frumin, viral marketing begins with a small “seed” of individuals who spread information by sharing it with their friends or peers. In the simplest case, each word-of-mouth transmission occurs with some constant amount of probability, represented as B. If each person then spread the information to a certain amount of others, represented by Z, then the expected number of new converts generated by each existing one would be the reproduction rate, R. The mathematical equation for a viral marketing reproduction rate would be represented as: R = BZ The reproduction rate (R) is extremely important, because if R>1, then each person who gets the information or message will spread it to more than on additional person, who then does so on and on (as mentioned as exponential growth in Understanding “Viral” Marketing, above). However, if R