Dear CMO:

Lots and lots of talk flying around the blogosphere about word of mouth, about user generated content, all swirling around the concept of “letting go of your brand.” Sure, it’s all scary stuff, but I think we’ve covered this ground already. So let’s take it one step further. Suppose your product is digital. It’s all fine and good when someone makes a spoof on your movie; it’s a different thing when they rip it off completely.

I have always been on the side of the artist. Copyrighted material is sacrosanct. Ripped music is stolen music. Artists are losing millions a year from copyright infringement. Harumph, harumph, etcetera, etcetera. So when an argument comes along that messes up my fine soapbox speech, I really get flustered.

Being a well-traveled executive, you no doubt caught the presentation by Mark Pesce at the Australian Film Television and Radio School in Sydney last year on the subject of “Piracy is Good?”. Here’s the short version of the story. Battlestar Gallactica began airing in the UK in October, 2004, with plans to run in the US and Australia in January, 2005. Sci Fi fans, for some reason, are fairly conversant in peer to peer file sharing applications, as it turns out (and who would have thought that?), with episodes appearing in Australia minutes after the initial run in the UK. Replete, of course, with British ads, just as they appeared on the tellie when they were Bit Torrented and shot around the world.

So was a “Ripped Battlestar Gallactica a Stolen Battlestar Gallactica”? Apparently not. Ratings exceeded expectations and the show hit and maintained a number one spot on the network. Apparently, “sampling” and word of mouth did the rest.

Now you know why Bruce Springsteen used to lead off concerts with, “… roll those tapes!” and why the Grateful Dead did all those things that made them the Grateful Dead.

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Key Takeaways:

> We are paid to make good decisions that maximize shareholder value and to sniff out the unsupported and flaky ideas of marketing pundits who do not have to face the consequences of their intellectually intriguing but utterly unsubstantiated recommendations. But if you look very closely, you can either find — or develop — data traps that can either validate or refute interesting ideas.

> Hard data on WOM financial returns is hard to find — but the example of Battlestar Gallactica in Australia is proof that it exists. Does this mean that WOM is a positive ROI activity and should knock channel promotion, merchandising, and public relations out of your marketing budget? No. You need to squint very hard at this case study, understand how it may apply to you and your business life, and draw what conclusions you feel are appropriate. WOM can have a positive ROI. Whether it will, in your instance, is up to you, your product, and your data traps.

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I really tried to push this as a philosophy in my old days as the audio tape marketing guy at Sony. Sony Music still looked at me like I was the physical embodiment of Satan. I begged for out-takes, unreleased B-sides, unheard concert tracks, or just about anything they didn’t want that I could re-purpose just to get this idea in the market. No luck. It was hard enough to get the licensing arm to agree to give me artist T-shirts. Which also explains why the music industry got taken behind the woodshed by a PC manufacturer a few years ago. They staked out the wrong problem.

Here’s the thing. “Word of mouth” is not a new idea. Trying WOM isn’t virgin territory — you can find thousands of references and dozens of conferences full of WOM demagoguery. But you can’t find many who can actually show the ROI because there just isn’t that much being done to track it all. And that’s why it’s been an interesting but fringe idea. Here’s an example of hard data. This is important.

How you deal with this is up to you.


Copyright (c) 2006 Stephen Denny