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A new way to measure word-of-mouth marketing Assessing its impact as well as its volume will help companies take better advantage of buzz. APRIL 2010 • Jacques Bughin, Jonathan Doogan, and Ole Jørgen Vetvik

Exhibit 1: Word of mouth is influential throughout the consumer decision journey. Exhibit 2: By looking at impact as well as volume, marketers can measure the effects of word-of-mouth messages more accurately.

Consumers have always valued opinions expressed directly to them. Marketers may spend millions of dollars on elaborately conceived advertising campaigns, yet often what really makes up a consumer’s mind is not only simple but also free: a word-of-mouth recommendation from a trusted source. As consumers overwhelmed by product choices tune out the ever-growing barrage of traditional marketing, word of mouth cuts through the noise quickly and effectively.Indeed, word of mouth1 is the primary factor behind 20 to 50 percent of all purchasing decisions. Its influence is greatest when consumers are buying a product for the first time or when products are relatively expensive, factors that tend to make people conduct more research, seek more opinions, and deliberate longer than they otherwise would. And its influence will probably grow: the digital revolution has amplified and accelerated its reach to the point where word of mouth is no longer an act of intimate, one-on-one communication. Today, it also operates on a one-to-many basis: product reviews are posted online and opinions disseminated through social networks. Some customers even create Web sites or blogs to praise or punish brands. Register to read this article.

Developed for McGraw Hill Higher Education Education UK, PRACTICE Marketing is a 3D turn-based Serious Game intended to teach college kids the principles of product marketing and competition. In the game, players are able to fully experience the seven underlying principles upon which to base marketing strategy and efforts: Image, Differentiation, Repeat Business, Ease of Doing Business, Networking, Likeability, and Emotion. Gameplay You’ve been selected to manage a company’s new entry into the backpack market. Your first step in the game is to create a strong product that appeals to a specific market segment and price it appropriately.

You are upfront presented with the info you need to analyze the market, provided by market research, who has narrowed the backpack market down to five potential segments for you to consider targeting, selecting the one that looks the most promising.

Once you have selected a target market, you can use the backpack builder to design a pack that meets the needs of its particular demographic.

With 2012 fast approaching along with it comes new mobile marketing opportunities that your business should follow as you consider efforts to spread the word about your brand and products and services through mobile. 

Mobile Visitation Grew 200% 

2011 has been a breakout year for growth in mobile visitation.  It featured a steep rise in text messaging, smartphone purchases and mobile advertising. Corporate use of mobile websites grew 210 percent in the last 12 months!

The global optical networking market is estimated to reach revenues of $20 billion in 2016, according to analyst firm Ovum. The global market is forecast to grow at 6% CAGR between 2010 and 2016, driven by investment from carriers in 40G and 100G networks. This level of growth, however, will vary according to region, with the North American market, for instance, estimated to grow by 12% this year while the Asia-Pacific market is predicted to contract by a further 3.2% in 2011. “Increasing bandwidth from residential broadband networks, mobile networks, and enterprises is the key driver of the growth. Carriers are investing in access networks and mobile long-term evolution (LTE) roll-outs are beginning to gain momentum,” said Ovum analyst Ian Redpath. “The optical networking market is also reaching a watershed moment in terms of technology. Networks based on 40G and 100G wavelengths are now poised for mass-market deployment.”

Africa is being tipped to pass one billion mobile subscriptions to become the world’s second largest mobile market by 2016 according to new research from analyst firm Informa.

Mobile activations in the continent, which currently stand at 616 million, are estimated to grow by more than 60 percent over the next five years making the region the world’s second largest telecom market behind only Asia.

Informa explains that the development of the region’s “relatively immature telecoms market” — thanks to increased competition and lower costs — combined with the continued growth of Africa’s population are the primary reasons for its growth predictions. The use of 3G is also tipped to rise at a strong rate from 6.6 percent of Africa’s total mobile subscribers today to 46 percent by the end-2016 .

It’s no secret that credit card companies are shelling out big bucks and aggressively forming partnerships and deals to start cashing in on the mobile and digital payments innovations currently taking place. American Express, which recently debuted its own digital payments product Serve, has been particularly aggressive on the partnerships front, striking recent deals with both Foursquare and Facebook. Mastercard has bet on NFC with a partnership with Google for Google Wallet and bought online payments gateway DataCash for $520 million last fall. And Visa has made a number of major moves in the mobile and digital payments space of late; including making an investment (and taking on an advisory role) in disruptive startup Square, buying virtual goods payments platform PlaySpan for $190 million, and acquiring mobile payments company Fundamo for $110 million. We sat down with Visa’s Global Head of Mobile Product Bill Gajda and the company’s Head of Global Product Strategy, Innovation and eCommerce Jennifer Schulz to discuss how the financial company is planning to compete in both mobile and digital payments.

In May, Visa announced its plans for the digital wallet. We’ll explain this initiative later in the post, but part of this platform would allow you to access your loyalty points, credit cards and more from your mobile phone at the point of sale. And the third pillar of Visa’s mobile strategy is incorporating value-added services like real-time alerts, contextual services, and offers at point of shopping based on where you are.

Gajda explains that Visa is licensing mobile payments applications PayWave for integration with the ISIS wallet and the company is actively looking for other ways to integrate with NFC into the company’s mobile payments structure.

Since it was announced some time ago in 2011, Google Wallet has been completely exclusive to the Sprint Nexus S 4G. Every carrier other than Sprint has opposed the Google Wallet program and blocked it from being installed on their devices as they were preparing their own proprietary NFC payments system called Iris. That didn’t stop people from hacking Google Wallet and installing it onto non-Sprint Nexi, but still, we’d like to see more support from the carriers on this. Thanks to some brand new Android Market discoveries, however, it now looks like Google Wallet is officially available for all Galaxy Nexus on Verizon and AT&T!

Head over to the web version of the Android Market and search for Google Wallet. If you’re on a Verizon or AT&T (unlocked GSM) Galaxy Nexus, it now says Google Wallet is compatible with your phone! As a day one AT&T Galaxy Nexus user I can confirm it hasn’t always been this way and this could possibly be the first step towards seeing Google Wallet become a more widespread program. If you try to install from the app version of the Android Market it still says incompatible, so it’s probably in the first phase of rollout. Google Wallet is still apparently blocked for Galaxy Nexus users on T-Mobile, but hopefully that changes soon

If you are a Galaxy Nexus user on Verizon and AT&T, let us know in the comments if you successfully installed Google Wallet from the web version of the Android Market. I can confirm that installation worked perfect on my AT&T Galaxy Nexus.

Google’s official Android Market is not available in China, leading to a plethora of independent markets – over 70 at last count. The system works – sort of – but users may find it annoying because you actually don’t know how to find the good stuff. China is still lacking any sort of innovative search mechanism to help people identify the apps they really need in daily life.

Discovering the apps should not be boring, and the core value of Qiuqiu is to bring the pleasure of discovering apps during different activities. Qiuqiu’s app search engine is unique because it offers results based on your location, the time of day, and the things you like and do. Each scenario is expressed by a series of apps – education apps for the school day and travel apps for your vacation. It’s a compelling and interesting change from the traditional “editor’s choice” and selected apps lists found in many markets.

Qiuqiu, the new app discovery engine is developed by AppChina, one of the leading third party Android markets. The founders are a group of very experienced senior engineers and product managers from STC Bing search technology centre and graduates from Tsinghua, Beijing and Fudan Universities. Being successful in the Android market, as Luo Chuan, the co-founder of AppChina, formerly CEO of MySpace China, said, means suppling the right apps at the right time. AppChina is moving forward to the field of search engine and data mining and try to develop a new way of discovering Android apps most suitable for you.

AND Chief Executive Officer Maarten Oldenhof says the company experienced a challenging start of 2011. “We are in close contact with various big companies, however we depend on the decisions of these parties and their long approval procedures. We see opportunities in the strong growing Smartphone market and social networks, such as Facebook, Groupon and Twitter. Social media on the smartphone is very powerful and location-based services are a must.” Revenue in the first four months of 2011 has declined, which has led to a loss in the first four months of 2011. Given the current size of AND, the development in revenue and results are greatly influenced by whether or not closing orders in a given period, both large and small. Further, big companies in the market are very careful with making decisions because of quickly changing market developments and especially the influence on their business models.

Outlook for 2011 The economic climate, market developments and business models are all very uncertain in the market for digital maps. The development of the results in 2011 will depend on the strength of the economic recovery and developments in the market for navigation and location based services. Therefore, AND is not in the position to provide an outlook for the full year 2011.

re creating smartphone loyalty, determining which OS and device a consumer may buy. At least that’s what a recent Gartner report will have you believe. The sales report ranks Android, Symbian, iPhone, BlackBerry and Windows Phone sales in the first quarter of 2011, noting the impact of mobile apps on the market share of new sales. It seems the mobile device market is only gaining in strength, Google (GOOG) taking 36 percent market share, leading with 36.3 million unites sold. Symbian comes in second, with 27.4 percent market share at 27.6 million units, leaving Apple (AAPL) at 16.8 percent market share with 16.9 in sales. RIM’s (RIMM) BlackBerry comes in fourth, with 13 million and a 12.9 percent take of the market.

“Every time a user downloads a native app to their smartphone or puts their data into a platform’s cloud service, they are committing to a particular ecosystem and reducing the chances of switching to a new platform,” notes principle research analyst Roberta Cozza. “This is a clear advantage for the current stronger ecosystem owners Apple and Google. As well as putting their devices in the context of a broader ecosystem, manufacturers must start to see their smartphones as part of a computing continuum.”

Apps have certainly created an expansive ecosystem for mobile industry, but just like the mighty dinosaur, this era may one day become extinct. The death of mobile apps has been predicted by MIT writer Christopher Mims, pegging web apps as the future. It’s their potential ubiquity across platforms that extends access to web users, instead of drawing lines in the sand around mobile browsing versus the web you access on a PC laptop. Mims calls for a browser-based utopia where offline access and standards like HTML5 harmonize our desperate web experiences, but notes that offline access is far from perfect. Things still boil down to business, where Google’s marketplace has lower operating costs than Apple’s, with a broadening reach.

Research group Gartner issued a special report on Thursday, noting that Apple will have a "free run" in the tablet market this holiday season as rivals continue to lag. The group sees worldwide media tablet sales as on track to reach 63.6 million units this year, a 261.4 percent increase from 2010.

Gartner predicts Apple will hold on to a dominant 73.4 percent of the market this year, though down from 83 percent in 2010. Android is expected to remain in second place, with the firm assuming that no other platforms will manage a 5 percent share of the market in 2011.

By the end of 2015, the company's tablet share is expected to slide to 46 percent.

The global optical networking (ON) market will reach revenues of $20 billion by 2016, as the sector pulls itself out of the economic downturn, predicts Ovum in a new forecast. However, the independent telecoms analyst warns that although the global market will grow at a compound annual growth rate (CAGR) of 6% from 2010 to 2016, not all of the regions will see strong growth. Ian Redpath, Ovum analyst and author of the forecast, said that "increasing bandwidth from residential broadband networks, mobile networks, and enterprises is the key driver of the growth. Carriers are investing in access networks and mobile long term evolution (LTE) rollouts are beginning to gain momentum. The ON market is also reaching a watershed moment in terms of technology. Networks based on 40G and 100G wavelengths are now poised for mass-market deployment.

The worldwide mobile phone market grew 12.8% year over year in the third quarter of 2011 (3Q11), as smartphone growth declined in key mature markets. According to the International Data Corporation (IDC) Worldwide Mobile Phone Tracker, vendors shipped 393.7 million units in 3Q11 compared to 348.9 million units in the third quarter of 2010. However, the 12.8% growth was higher than IDC's forecast of 9.3% for the quarter and stronger than the 9.8% growth in 2Q11.

It was also the second-lowest growth rate for the overall mobile phone market over the past two years; a reflection of delayed smartphone purchases and conservative consumer spending last quarter.

"The combination of economic uncertainty and anticipation over fourth quarter or late third quarter product releases caused some consumers to delay their smartphone purchases," said Kevin Restivo, senior research analyst with IDC's Worldwide Mobile Phone Tracker. "Many waited for products such as the iPhone 4S, which was announced after the quarter closed, or Research In Motion's BlackBerry 7 phone series, which were released in the final weeks of the quarter."

The overall market for virtual goods in the US is headed towards $2.9 billion for 2012, according to the Inside Virtual Goods report. That’s up from $2.2 billion this year, and $1.6 billion in 2010.

Virtual goods on Facebook are continuing to comprise more than half of that, going from $835 million in 2010 to $1.2 billion this year to $1.6 billion next year. The gains each year are around $400 million, which means growth is going from 50% down to around 35%. While the report doesn’t break out company-specific numbers publicly, Zynga’s pre-IPO filings indicate it made more than $300 million last quarter. Assuming that number stays around the same, look for Zynga to continue to its historical dominance with about 75% of the Facebook virtual goods market.

Mobile has also been coming into its own in the last 18 months, report co-author Charles Hudson tells me. The report estimates that mobile virtual goods (for games only, not including other digital media like iTunes songs) made $350 million this year, and will grow to $500 million next year.

American Express is making a significant move in the expansion of its digital wallet, Serve to international markets today. The credit card company is announcing the first global partnership for Serve with Lianlian Group, of of China’s leading mobile payments providers. Additionally, AmEx has also made an equity investment of $125 million in LianLian Pay.

Group President for Enterprise Growth for American Express Dan Schulman tells us in an interview that American Express has come to realize that in a lot of fast growing economies internationally, people move money in different ways and in order to enter these markets, the company has to think beyond just plastic cards and checks, and consider moving straight to mobile platforms.

AmEx is generally predicting China to be a huge market for its mobile and digital payments products and is planning to open a new American Express’ Enterprise Growth Group office in Hangzhou, China. The China-based team will provide technical and consulting support to Lianlian Group on the Serve partnership, and the new outpost will be headed by Matthew Lee, President, Enterprise Growth, American Express, China.

In the Business901 podcast, What Political Campaigns can teach business, part 1 of 2 we looked at a more strategic view. In today's podcast, we looked at the more tactical practices and how they related not only to a political campaign but to a typical marketing campaign. Derek A. Pillie has served public and political candidates for over 15 years. He has served on the staff of Indiana’s Third Congressional District, most recently as District Director for just over a decade. In that role, he oversaw Indiana operations of the office; including constituent outreach and helping taxpayers solve problems with federal agencies. He also worked on crucial economic development projects and was heavily involved with advising the office on online media and marketing decisions. After his federal service expired Derek started working at Cirrus ABS, an online marketing and technology development company. He currently manages their business development efforts. Cirrus ABS has added political campaigns to the portfolio of industries they serve since Derek joined the team, and he continues volunteer efforts on behalf of candidates he supports. Related Information: Preview of Political Campaign Marketing Podcast Political Campaigning – Strategy Update What political campaigns can teach business Lean Six Sigma for Government

PayPal has been a powerhouse in online payments but it hasn’t really cracked the much bigger market for payments for goods in the real world. Now, the company is starting to show off how it can put all of its components and recent acquisitions together to form a broad tool for mobile payments.

PayPal hosted a partner event for retailers yesterday and began explaining how they’ll be able to implement its tools for in-store payments. The big reveal will happen next month at PayPal’s developer conference in San Francisco, but the company showed a glimpse of how it’s marshaling its resources. It’s important for PayPal to step up with a compelling offering because the mobile payments market is getting crowded with options like Square, Google Wallet and upcoming services like Isis from the cellular carriers and digital wallets from credit card companies.

Scott Thompson, president of PayPal, said in a blog post the company is looking to be a one-stop shop for merchants to help them address every part of the shopping lifecycle. OK, that’s a bit of jargon, but it means PayPal is going to help push out targeted advertising, help with in-store discovery and improve transactions with a handful of options.

Google is finally opening up its near field communication payment system, Google Wallet, today to the public, allowing Nexus S users on Sprint to try out contactless payments through their smartphone. It’s a little later than originally expected and again, with only one handset that supports it, Google Wallet is just the first step in a long process.

But it’s a significant one that begins a much broader effort by Google to change both the way people pay for goods in the real world and interact with merchants and retailers. Toward that end, Google announced today that it has struck deals with American Express, Visa and Discover so their cards will also be integrated into future versions of Google Wallet. Initially, Google Wallet launched with MasterCard as its first partner. But now, banks that issue cards through Visa and Discover will soon be able to load up their accounts directly on to Google Wallet.

For Google, the wallet initiative signals a new opportunity to market deals and discounts to consumers and allows merchants a new way to reach consumers and strengthen their relationships with them through discounts and loyalty programs. And it enables them to close the loop on transactions, so they can see how effective their marketing is.

If mobile video sharing is to follow in the footsteps of its more desirable mobile photo-sharing cousin, which application will users want to use to shoot, share and discover video clips? It’s too soon to tell, but startup Klip joins the fray and is now vying for your video attention. The startup released its application for iPhone on Monday with a focus on letting users share super-short 1-minute video clips — on Klip or with Facebook, Twitter and Youtube — and helping users discover clips from friends or other users based on topics of interests. “Klip re-invents the way consumers experience the world by organizing mobile videos in real time and by connecting consumers with the people and the topics that interest them,” the company says.