Study Reveals Barriers to Word-of-Mouth Marketing Success

Newly Released Survey Data Reveals Marketing Professionals Face Major
Hurdles With WOM


ORLANDO, FL -- (MARKET WIRE) -- 01/19/06 -- Word-of-Mouth (WOM)
marketing has become a recognized and powerful tool for today's
advertisers, but a newly released study from Osterman Research and
BoldMouth.com reveals that few organizations know how to link
word-of-mouth practices to existing marketing communications efforts
to drive business growth.


Key findings from this new state-of-the-industry study were released
today at the Word of Mouth Marketing Association's (WOMMA) Word of
Mouth Basic Training Conference at the Coronado Springs Resorts and
Convention Center at Disney World.


The new study, conducted online from mid-December 2005 to mid-January
2006, found that despite the growing use of Word-of-Mouth:



-- Only 28.6 percent of all respondents have an established word of mouth

marketing plan and only 12.7 percent of all respondents have a formalized

WOM plan.


-- More than half of the organizations surveyed indicated that they are

unable to track WOM marketing performance and 41.9 percent of respondents

indicate they have difficulty getting customers to participate in new

campaigns.


-- 25.6 percent of respondents are experiencing challenges in allocating

funds to run WOM campaigns with 20.9 percent of organizations noting that

they lack a clear understanding of how run a WOM campaign or internal staff

skill sets to manage WOM efforts.



In addition to a lack of planning, expertise and tracking results, the
study also found that marketers face further obstacles in scaling
their WOM campaigns and justifying their campaign budget to the rest
of their organization. "The study is a wake-up call for the WOM
industry and shows organization are facing significant marketing
challenges in executing word-of-mouth campaigns," noted BoldMouth.com
CEO Todd Tweedy. "More importantly, these barriers are likely to leave
many organizations 'stranded on second base' as they attempt to hit a
marketing home run with word-of-mouth," BoldMouth.com's CEO added.


BoldMouth.com CEO Todd Tweedy will be discussing key findings of the
study during his presentation on Day 2 of the WOMMA conference, in the
session titled "Getting Started: Creating a WOM Business Plan."


Industry Stymied by Tracking, Implementation, Lack of Expertise


Most marketers surveyed -- 51.2 percent -- admitted that they are
unable to track the performance of their WOM marketing efforts -- and
they see this as a serious limitation not just on their effectiveness,
but as an argument against committing additional resources to WOM.


Other key difficulties facing would-be WOM marketers, including:



-- Almost 42 percent of respondents noted that getting customers to

participate in new campaigns presented a serious challenge to their WOM

efforts.


-- The third-largest problem facing marketers stems from difficulties in

scaling campaigns. More than a third -- 37.2 percent -- of the

organizations surveyed cite scalability as a barrier to undertaking WOM

campaigns to achieving their goals.


-- Less than half of those surveyed measure word-of-mouth marketing

performance. Indeed, 59.1 percent either don't measure their performance,

or aren't sure whether they are gathering actionable data. And 67.4 percent

either doubt, or aren't certain at all that the data they gather as a

result of measuring performance is valuable or meaningful.


-- Lack of metrics to evaluate the effectiveness of WOM campaigns is the

single largest reason -- 36.8 percent -- that respondents don't create a

formal WOM marketing plan. Almost as many -- 32.6 percent -- haven't

created marketing plans because they're not certain how to integrate WOM

into existing marketing efforts. And the third-largest reason clients are

going into WOM campaigns blind without formal plans? They lack the

requisite staff experience or skill sets -- 28.4 percent.


-- Metrics issues are likely to pose additional problems for

organizations. Since increasing the marketing budget hinges on justifying

expenditures, it shouldn't be surprising that 17.9 percent say they were

limited by budget constraints in creating WOM marketing plans.


-- Despite having little in the way of in-house or in-agency WOM

marketing expertise, marketers still aren't availing themselves to external

resources, with more than half (55.8 percent) admitting that they have

never used an outside specialist to run a WOM campaign.



Industry Misconceptions


The survey reveals that the word-of-mouth marketing industry is also
plagued by basic misconceptions.



-- Of marketing professionals surveyed, more than 40 percent of all

respondents -- 44.4 percent -- believe that buzz from WOM marketing

campaign is most effective if the buzz happens quickly.


-- In terms of expectations around results generation, 44.1 percent of

respondents noted that they expected WOM campaigns to generate results in a

few days or in a few weeks. Only 19.2 percent of survey participants

indicated that their results generation expectations were six months or

longer. Further, an additional 9.2 percent simply didn't know or were not

sure of timing for generating results.


-- A third (33.9 percent) say they are either unsure of how to respond to

negative press or comments about their business, or wouldn't bother

responding at all. Additionally, one in four respondents -- 25.7 percent --

believes they don't need a Web site to do effective WOM campaigns.



Additional Survey Information


An online survey, conducted from December 8, 2005 to January 16, 2006
by Osterman Research, generated 112 complete responses for a 90%
confidence level for a mid-point response yielding a sampling error of
7.8%.


For additional details on the study or its implications, contact Todd
Tweedy at BoldMouth.com.


About BoldMouth.com


BoldMouth.com -- http://www.boldmouth.com -- partners with
organizations and brand marketers to develop cost-effective
word-of-mouth marketing models that leverage real-time communications
and database-driven information delivery to enhance customer
acquisition, retention, and mobilization initiatives. BoldMouth was
founded in 2005 by veteran online marketer Todd Tweedy.


About Osterman Research


Osterman Research -- http://www.ostermanresearch.com -- was founded by
Michael Osterman in 2001. Since that time, the company has become one
of the leading analyst firms in the messaging and collaboration space,
providing research, analysis, white papers and other services to
companies like Microsoft, America Online, Sun Microsystems, Yahoo!,
Network Appliance, Iron Mountain, Postini, Hewlett-Packard and many
others. The core of Osterman Research's capabilities is its market
research panel of IT professionals and end users that are regularly
surveyed on a variety of topics related to email, instant messaging,
spam, collaboration, security, storage, archiving, data retention,
compliance and other areas. This continually updated knowledge base of
information from decision makers and influencers helps Osterman
Research to understand developments and gain insight into the trends
that affect its clients.