2009

Submission : Prof Issac Jacob

K J Somaiya Institute of
Management Studies and Research,
Mumbai

[VIRAL MARKETING]
Rahul Avasthy

PGDM Marketing – Roll number 08

 Viral Marketing

Principles of Viral Marketing

Viral marketing, or "refer-a-friend," email campaigns have received a lot of attention in the
media recently. These campaigns, which encourage recipients of promotional emails to forward
the messages to their friends, have garnered both positive and negative reviews from consumers,
privacy advocates, and industry pundits.

At the heart of the issue are concerns over sending unsolicited email, but by using viral
marketing tactics carefully, marketers may avoid negative reactions and gain an excellent return
on investment (ROI) as they increase the reach of a marketing message to a targeted group far
beyond their original audience.

I admit it. The term "viral marketing" is offensive. Call yourself a Viral Marketer and people will
take two steps back. I would. "Do they have a vaccine for that yet?" you wonder. A sinister
thing, the simple virus is fraught with doom, not quite dead yet not fully alive, it exists in that
nether genre somewhere between disaster movies and horror flicks.

But you have to admire the virus. He has a way of living in secrecy until he is so numerous that
he wins by sheer weight of numbers. He piggybacks on other hosts and uses their resources to
increase his tribe. And in the right environment, he grows exponentially. A virus don't even have
to mate -- he just replicates, again and again with geometrically increasing power, doubling with
each iteration:

1
11
1111
11111111
1111111111111111
11111111111111111111111111111111
1111111111111111111111111111111111111111111111111111111111111111

In a few short generations, a virus population can explode.

Viral Marketing Defined

What does a virus have to do with marketing? 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. Like viruses, such strategies
take advantage of rapid multiplication to explode the message to thousands, to millions.

Off the Internet, viral marketing has been referred to as "word-of- mouth," "creating a buzz,"
"leveraging the media," "network marketing." But on the Internet, for better or worse, it's called

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"viral marketing." While others smarter than I have attempted to rename it, to somehow
domesticate and tame it, I won't try. The term "viral marketing" has stuck.

The Classic Hotmail.com Example

The classic example of viral marketing is Hotmail.com, one of the first free Web-based e- mail
services. The strategy is simple:

1. Give away free e- mail addresses and services,

2. Attach a simple tag at the bottom of every free message sent out: "Get your private, free
email at http://www.hotmail.com" and,
3. Then stand back while people e- mail to their own network of friends and associates,
4. Who see the message,
5. Sign up for their own free e- mail service, and then
6. Propel the message still wider to their own ever- increasing circles of friends and
associates.

Like tiny waves spreading ever farther from a single pebble dropped into a pond, a carefully
designed viral marketing strategy ripples outward extremely rapidly.

Elements of a Viral Marketing Strategy

Accept this fact. Some viral marketing strategies work better than others, and few work as well
as the simple Hotmail.com strategy. But below are the six basic elements you hope to include in
your strategy. A viral marketing strategy need not contain ALL these elements, but the more
elements it embraces, the more powerful the results are likely to be. An effective viral marketing
strategy:

1. Gives away products or services

2. Provides for effortless transfer to others
3. Scales easily from small to very large
4. Exploits common motivations and behaviors
5. Utilizes existing communication networks
6. Takes advantage of others' resources

Let's examine at each of these elements briefly.

1. Gives away valuable products or services

"Free" is the most powerful word in a marketer's vocabulary. Most viral marketing programs
give away valuable products or services to attract attention. Free e-mail services, free
information, free "cool" buttons, free software programs that perform powerful functions but not
as much as you get in the "pro" version. Wilson's Second Law of Web Marketing is "The Law of
Giving and Selling" (http://www.wilsonweb.com/wmta/basic-principles.htm). "Cheap" or
"inexpensive" may generate a wave of interest, but "free" will usually do it much faster. Viral
marketers practice delayed gratification. They may not profit today, or tomorrow, but if they can

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 Viral Marketing

generate a groundswell of interest from something free, they know they will profit "soon and for
the rest of their lives" (with apologies to "Casablanca"). Patience, my friends. Free attracts
eyeballs. Eyeballs then see other desirable things that you are selling, and, presto! you earn
money. Eyeballs bring valuable e- mail addresses, advertising revenue, and e-commerce sales
opportunities. Give away something, sell something.

2. Provides for effortless transfer to others

Public health nurses offer sage advice at flu season: stay away from people who cough, wash
your hands often, and don't touch your eyes, nose, or mouth. Viruses only spread when they're
easy to transmit. The medium that carries your marketing message must be easy to transfer and
replicate: e-mail, website, graphic, software download. Viral marketing works famously on the
Internet because instant communication has become so easy and inexpensive. Digital format
make copying simple. From a marketing standpoint, you must simplify your marketing message
so it can be transmitted easily and without degradation. Short is better. The classic is: "Get your
private, free email at http://www.hotmail.com." The message is compelling, compressed, and
copied at the bottom of every free e- mail message.

3. Scales easily from small to very large

To spread like wildfire the transmission method must be rapidly scalable from small to very
large. The weakness of the Hotmail model is that a free e- mail service requires its own
mailservers to transmit the message. If the strategy is wildly successful, mailservers must be
added very quickly or the rapid growth will bog down and die. If the virus multiplies only to kill
the host before spreading, nothing is accomplished. So long as you have planned ahead of time
how you can add mailservers rapidly you're okay. You must build in scalability to your viral
model.

4. Exploits common motivations and behaviors

Clever viral marketing plans take advantage of common human motivations. What proliferated
"Netscape Now" buttons in the early days of the Web? The desire to be cool. Greed drives
people. So does the hunger to be popular, loved, and understood. The resulting urge to
communicate produces millions of websites and billions of e-mail messages. Design a marketing
strategy that builds on common motivations and behaviors for its transmission, and you have a
winner.

5. Utilizes existing communication networks

Most people are social. Nerdy, basement-dwelling computer science grad students are the
exception. Social scientists tell us that each person has a network of 8 to 12 people in their close
network of friends, family, and associates. A person's broader network may consist of scores,
hundreds, or thousands of people, depending upon her position in society. A waitress, for
example, may communicate regularly with hundreds of customers in a given week. Network
marketers have long understood the power of these human networks, both the strong, close
networks as well as the weaker networked relationships. People on the Internet develop networks

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 Viral Marketing

of relationships, too. They collect e- mail addresses and favorite website URLs. Affiliate
programs exploit such networks, as do permission e-mail lists. Learn to place your message into
existing communications between people, and you rapidly multiply its dispersion.

6. Takes advantage of others' resources

The most creative viral marketing plans use others' resources to get the word out. Affiliate
programs, for example, place text or graphic links on others' websites. Authors who give away
free articles, seek to position their articles on others' webpages. A news release can be picked up
by hundreds of periodicals and form the basis of articles seen by hundreds of thousands of
readers. Now someone else's newsprint or webpage is relaying your marketing message.
Someone else's resources are depleted rather than your own.

Put into practice

I grant permission for every reader to reproduce on your website the

article you are now reading -- "The Six Simple Principles of Viral
Marketing" (see http://www.wilsonweb.com/wmt5/viral-principles-
clean.htm for an HTML version you can copy). But copy this article
ONLY, without any alteration whatsoever. Include the copyright
statement, too, please. If you have a marketing or small business website,
it'll provide great content and help your visitors learn important strategies.
(NOTE: I am giving permission to host on your website this article AND Viral Marketing
NO OTHERS. Reprinting or hosting my articles without express written by Russell Goldsmith
permission is illegal, immoral, and a violation of my copyright.)

When I first offered this to my readers in February 2000, many took me up

on it. Six months later a received a phone call:

"I want to speak to the King of Viral Marketing!"

"Well, I'm not the King," I demurred. "I wrote an article about viral
marketing a few months ago, but that's all."
The Secrets of Word-of-Mouth
"I've searched all over the Internet about viral marketing," he said, "and Marketing by George Silverman
your name keeps showing up. You must be the King!."

It worked! Even five years later this webpage is ranked #1 for "viral marketing."

To one degree or another, all successful viral marketing strategies use most of the six principles
outlined above. In the next article in this series, "Viral Marketing Techniques the Typical
Business Website Can Deploy Now" (http://www.wilsonweb.com/wmt5/viral-deploy.htm), we'll
move from theory to practice. But first learn these six foundational principles of viral marketing.
Master them and wealth will flow your direction.

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 Viral Marketing

Why viral marketing fails

Ensuring one’s marketing message evokes enough sentiment for it to be passed on and on is a gigantic
challenge.

Hotmail owes its success to viral marketing. Sabeer Bhatia, creator of Hotmail.

Sunil George Kuruvilla

It was supposed to be the advertising agency‟s nightmare. After all, who would need an
advertising agency when the consumer himself passes the advertising message voluntarily to
others? It was supposed to be the next Big Bang. Instead, most ofthe campaigns often end in a
whimper.

Yes, I am talking about viral marketing. First, the basics. Viral marketing uses social networks to
create and spread brand awareness. An analogy can be drawn with pathological and computer
viruses in the way the viral message passes from one consumer to another. Outside the context of
Internet, viral marketing has been referred to as „word-of- mouth‟, „buzz creation‟, „network
marketing‟ et al. Twisting Shakespeare‟s words, what is in a nam e? That which we call a virus
by any other name would be as nasty. Well, as we will see, there is a lot in a name.

A good illustration of viral marketing is the practice of Hotmail to append its own advertisement
to every outgoing mail. What it means for Hotmail is that every recipient of a mail would also
find an invitation to join Hotmail. Let‟s say one of your friends sends a mail to you from his
Hotmail account. You got mail. You read the mail and notice a tiny message at it bottom. The
message says, “Get your private, free e- mail at http://www.hotmail.com‟. You click on it. You
open the free account. Voila! You got virus! Now, you send a mail to your aunt in New Jersey.
She sends a mail to her son in Boston, who in turn sends a mail to his newfound girlfr iend in
Paris, so on and so forth. This is exactly how Hotmail became the largest mail service provider in
the world. What started as a flu is an epidemic now.

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 Viral Marketing

The emergence of clicktivism as an online version of activism is also a case in point. Through
the clicktivism method, users are encouraged to donate, write a letter, forward a mail or sign a
petition, online. Forwarded mails are increasingly taking the place of actual black flag marches.
In the Indian context, the presence of clicktivism was appare nt during the recent anti-reservation
strike and when strong e- mail „appeals‟ reached a lot of people.

So, how can a technique that worked so well for Hotmail and clicktivists fail? Here are the
reasons:

The name

Shakespeare was wrong. The name „viral marketing‟ is crippling. It has such a negative
denotation that cannot be washed away even by a dip in the Ganges. Many experts, obviously
enamoured by this innovative marketing tool, have tried to give it a shroud of respectability by
using other terms. Alas, they have failed. The term „viral marketing‟ has proved to be as dogged
as the technique itself. Talk about the doctor tasting his own medicine.

Spam? No thank you, Ma’am.

Those of us who have received innumerable mails explicating about ways to increase our assets
will be wary of anything we receive from outside our social network. We are more likely to
reach for the Delete button than the Forward button. Spam is the equiva lent of an itch on your
back that you can‟t reach. Spam causes many a spasm of anger, and unsolicited messages are
Spam. Period.

The times, the people

Generation X (anyone born between 1961 and 1981) dominates the consumer landscape today
and they are savvier to marketing than any other generation before them. They are also
characterised by their cynicism, scepticism and mistrust in traditional values. So, if ever they get
the idea that somebody is using them as vehicles for marketing, then we may all sing „God save
the marketer‟. As Lincoln put it, “You can fool all the people some of the time, and some of the
people all the time, but you cannot fool all the people all the time.”

The how of it

Viral marketing seems simple enough. Indeed, in the Hotmail case, all it takes is a click on the
link. However, it doesn‟t always work that way. For one, not every company is in the business of
a free e- mail service. How does an FMCG company or a retailer ensure that the consumer
spreads its advertising message „voluntarily‟? This is the crux of the issue: how do you make a
receiver of an email press the Forward button? The answer is simple.

People will forward content that they feel strongly about. So that‟s easy. We just identify a
strong issue. What then? The problem from a branding perspective is how does one ensure that
the „strong issue‟ is in sync with your own brand identity. Surely, not many companies can
afford to take up issues espousing political ideologies.

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The ‘E’ word

I left it towards the end quite deliberately. Ok, ethics is slightly slippery. Yet, there is a certain
hideousness to the act of spreading one‟s advertising message through an unsuspecting customer.
So, what if the customer is not king? What if the customer is a donkey? He is still the king of
donkeys. And many times, „voluntary‟ is not always voluntary. This is because the consumer
doesn‟t suspect that he has fallen victim to the plans of a dexterous marketer.

The latest evidence of a viral marketing campaign gone wrong is Sony‟s attempt to use Youtube
to market its Playstation consoles. Sony created a fictitious character called Peter and tried to
pass him off as a hip-hop maven.

Needless to say, the plan flopped as discerning users soon discovered the scam. In the end, Sony
had to make a public apology. That must have hurt.

Is that it? Is it time to say goodbye to the virus? Far from it. Like a true, blue virus, we can
always expect it to take a mutant form that is more resistant to the vagaries of marketing. Watch
this space.

Viral marketing and viral advertising refer to marketing techniques that use pre-existing social
networks to produce exponential increases in brand awareness, through self-replicating viral
processes, analogous 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.

Some of the first recorded offline / online viral campaigns were developed by Tim Nolan of
Spent2000.com fame circa 1996. By placing abstract pairings of catch-phrases, quotes, song
lyrics and image mashups, Mr. Nolan developed a method of creating "buzz" around a URL
based installation. Phrases like "This city isn't safe" placed along side a URL created curiousity
enough in people's minds to remember a URL and visit again once they were online.

Viral marketing sometimes refers to Internet-based stealth marketing campaigns, including the
use of blogs, seemingly amateur web sites, and other forms of astroturfing, designed to create
word of mouth for a new product or service. Often the goal of viral marketing campaigns is to
generate media coverage via "offbeat" stories worth many times more than the campaigning
company's advertising budget.

The term "viral advertising" refers to the idea that people will pass on and share interesting and
entertaining content; this is often sponsored by a brand, which is looking to build awareness of a
product or service. These viral commercials often take the form of funny video clips, or
interactive Flash games, an advergame, images, and even text.

Viral marketing is popular because of the ease of executing the marketing campaign, relative
low-cost (compared to direct mail), good targeting, and the high and rapid response rate. The
main strength of viral marketing is its ability to obtain a large number of interested people at a
low cost.

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The hardest task for any company is to acquire and retain a large customer base. Through the use
of the internet and the effects of e-mail advertising, the business-to-consumer (B2C) efforts have
a greater impact than many other tools of marketing. Viral marketing is a technique that avoids
the annoyance of spam mail; it encourages users of a specific product or service to tell a friend.
This would be a positive word-of- mouth recommendation. One of the most successful
perspectives found to achieve this customer base is the integrated marketing co mmunication
IMC perspective.

Types of Viral Marketing Campaigns:

These are few types of Viral Marketing–

Pass-along: A message which encourages the user to send the message to others. The
crudest form of this is chain letters where a message at the bottom of the e- mail prompts the
reader to forward the message
Incentivised viral: A reward is offered for either passing a message along or providing
someone else's address. This can dramatically increase referrals. However, this is most
effective when the offer requires another person to take action.
Undercover: A viral message presented as a cool or unusual page, activity, or piece of news,
without obvious incitements to link or pass along. In Undercover Marketing, it is not
immediately apparent that anything is being marketed
"Edgy Gossip/Buzz marketing" ads or messages that create controversy by challenging the
borders of taste or appropriateness. Discussion of the resulting controversy can be
considered to generate buzz and word of mouth advertising. Prior to releasing a movie,
some Hollywood movie stars get married, get divorced, or get arrested, or become involved
in some controversy that directs conversational attention to them.
User- managed database: Users create and manage their own lists of contacts using a
database provided by an online service provider. By inviting other members to participate in
their community, users create a viral, self-propagating chain of contacts that naturally grows
and encourages others to sign up as well.
*************************************************************************************

Tips for Optimizing Viral Marketing

Campaigns

Listed below are five insights on how to execute a viral marketing campaign most effectively.

1. Offer an incentive. Viral marketing works best when a valuable and tangible incentive is offered,
encouraging individuals to forward an email message to their friends. However, marketers

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should cap the incentive to a specific quantity to avoid spam-like distribution of the message --
for example, offering an incentive of 20 percent off referrers' next purchase if they forward the
message to five friends. Open-ended incentives, such as offering a $5 credit for every five
friends referred, can end up causing a marketer customer service, financial, and privacy-related
problems.

A women's athletic clothing multichannel retailer recently offered a creative and socially aware
incentive when it launched a viral marketing campaign that rewarded message recipients with a
free T-shirt and a $1 donation to the Susan G. Komen Breast Cancer Foundation when an
individual sent the special email message to five friends and three of those friends opted in to
the retailer's catalog or email list. The campaign was tremendously successful, driving a click-
through rate three times higher than normal, an email newsletter sign-up rate of over 30
percent, and a catalog subscription rate of nearly 70 percent. Meanwhile, cost per sale
decreased by 89 percent.

2. Don't consider the referral an opt-in. When a customer refers a friend, the referral should not
be considered an opt-in. A name and email address volunteered by a person's friend does not
constitute an opt-in by the individual, so the data should be deleted immediately after the
referral email is sent. Verbiage should be included in the referral email asking if the individual
would like to receive future mailings, allowing her to opt in if she wishes.

3. Personalize the referral email. Response rates increase dramatically when users can see that a
message is coming from a friend, so it is best to personalize the email message to show that it's
coming from a recognizable source. The subject line is the key component in a viral marketing
email, because it can immediately identify the email as friendly. A good subject line may read:
"ADV: John Doe Thought You'd Like 20% Off at XYZ.com," thereby identifying that it is an
advertisement, there's a special offer, and the message was sent from a friend.

4. Track and analyze the results. As with any marketing campaign, tracking the results and
optimizing performance over time is absolutely necessary. Thankfully, sophisticated email
marketers can track insightful and actionable data that can be used to evaluate performance.
Important metrics to analyze are pass-along, click-through, and conversion rates. Marketers
should separate the click-through and conversion rates by original customers from referrals and
evaluate their respective performances. These metrics will alert a marketer to which offers and
customers drive the highest ROI.

5. Continually promote friendly referrals. Marketers who want to have their messages frequently
forwarded should place a viral marketing offer in every relevant outgoing email message. Viral
marketing makes for a great one-time campaign, but it can also be a very effective tool for
continuing to broaden the reach of your marketing messages over time.

Though no sure- fire way exists to prevent negative customer reactions, by following these five
concepts marketers should find their viral marketing campaigns to be most effective.

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