The Homa Files

Excerpted from Brandweek “General Mills, Kraft Launch Word of Mouth Networks” by Elaine Wong, October 5, 2008

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Recognizing that a consumer’s two cents are well worth their dollars, General Mills and Kraft have both launched new word-of-mouth networks. 

For General Mills, it is “Pssst . . . ,” an online network that gives members the scoop on the latest product news and offerings. The site, pssst.generalmills.com, currently has 100,000 members after a quiet launch last month…Pssst uses an initial survey to help gauge product preferences. Once registered, users can voice their opinions via blog posts, share online coupon offers and recipes, and test new sample kits via the mail…

Kraft, meanwhile, kicked off Kraftfirsttaste.com last week, which lets consumers share the newest coupon and sampling offers, but also includes features such as a member spotlight, product reviews, discussion boards and a photo-sharing tool.

Neither Kraft nor General Mills pays  members to join. Nevertheless, there is still incentive to participate, both companies say. “Consumers today regularly look to each other for recommendations and reviews on everything from books to food to cars, so we wanted to have a platform that enabled and encouraged this type of interaction and engagement,” said Gwen Gray, who heads consumer relationship marketing at Kraft, Northfield, Ill.

These two companies are following the footsteps of Procter & Gamble. P&G launched Tremor, which recruits teen word-of-mouth marketers, in 2001. It followed up with Vocalpoint for moms four years later…Unlike the General Mills and Kraft networks, Tremor and Vocalpoint are separate business units that operate under P&G…

Although these food companies are replicating the P&G model, they are going about it carefully. The registration process for Pssst contains a mandatory “full disclosure” statement that requires the individual to reveal his or her status as a Pssst marketer, a move to ward off potential litigation.

For instance, in 2005, Commercial Alert, a consumer advocacy group, filed a complaint against Tremor with the Federal Trade Commission. At issue was the fact that P&G’s Tremor did not require teens to disclose their marketing status. “Disclosure of that relationship is the difference between honest and creepy,” said Andy Sernovitz, author of Word-of-Mouth Marketing. The General Mills clause is an obvious response to the Tremor-FTC suit, he added.

Sernovitz expects to see more packaged goods companies getting into the space: “We’ll see more and more companies realize that word-of-mouth is not an accident. It’s something you do as a core part of the marketing mix.”

Edit by SAC

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Another recent article by Brandweek, “Is Talk Cheap, How Cheap?” discusses attempts made to quantify the costs of generating buzz.  The normal cost per word-of-mouth conversation is currently estimated to be about 50 cents.   This figure is generated by BzzAgent, a word-of-mouth marketing firm,  who arrives at the figure by dividing the number of tracked conversations related to a product by its sales.   While it is remains unclear how to best quantify the ROI for word-of-mouth marketing, it is clear that marketers such as Kraft, General Mills and P&G recognize that there is value in generating buzz. 

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Full article:
http://www.brandweek.com/bw/content_display/news-and-features/packaged-goods/e3i2db03fb29d573ec52722456845f5c274?imw=Y

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