First published on Biz2, 07/00.
“Viral marketing” is back, making its return as one of the gotta-have-it phrases for dot-com business plans currently making the rounds. The phrase was coined (by Steve Jurvetson and Tim Draper in “Turning Customers into a Sales Force,” Nov. ’98, p103) to describe the astonishing success of Hotmail, which grew to 12 million subscribers 18 months after launch.
The viral marketing meme has always been hot, but now its expansion is being undertaken by a raft of emarketing sites promising to elucidate “The Six Simple Principles for Viral Marketing” or offering instructions on “How to Use Viral Marketing to Drive Traffic and Sales for Free!” As with anything that promises miracle results, there is a catch. Viral marketing can work, but it requires two things often in short supply in the marketing world: honesty and execution.
It’s all about control
It’s easy to see why businesses would want to embrace viral marketing. Not only is it supposed to create those stellar growth rates, but it can also reduce the marketing budget to approximately zero. Against this too-good-to-be-true backdrop, though, is the reality: Viral marketing only works when the user is in control and actually endorses the viral message, rather than merely acting as a carrier.
Consider Hotmail: It gives its subscribers a useful service, Web-based email, and then attaches an ad for Hotmail at the bottom of each sent message. Hotmail gains the credibility needed for successful viral marketing by putting its users in control, because when users recommend something without being tricked or co-opted, it provides the message with a kind of credibility that cannot be bought. Viral marketing is McLuhan marketing: The medium validates the message.
Viral marketing is also based on the perception of honesty: If the recipient of the ad fails to believe the sender is providing an honest endorsement, the viral effect disappears. An ad tacked on to a message without the endorsement of the author loses credibility; it’s no different from a banner ad. This element of trust becomes even more critical when firms begin to employ explicit viral marketing, where users go beyond merely endorsing ads to actually generating them.
These services–PayPal.com or Love Monkey, for example–rely on users to market the service because the value of the service grows with new recruits. If I want to pay you through PayPal, you must be a PayPal user as well (unlike Hotmail, where you just need a valid address to receive mail from me). With PayPal, I benefit if you join, and the value of the network grows for both of us and for all present and future users as well.
Love Monkey, a college matchmaking service, works similarly. Students at a particular college enter lists of fellow students they have crushes on, and those people are sent anonymous email asking them to join Love Monkey and enter their own list of crushes. It then notifies any two people whose lists include each other. Love Monkey must earn users’ trust before any viral effect can take place because Metcalfe’s Law only works when people are willing to interact. Passive networks such as cable or satellite television provide no benefits to existing users when new users join.
Persistent infections
Continuing the biological metaphor, viral marketing does not create a one-time infection, but a persistent one. The only thing that keeps Love Monkey users from being “infected” by another free matchmaking service is their continued use of Love Monkey. Viral marketing, far from eliminating the need to deliver on promises, makes businesses more dependent on the goodwill of their users. Any company that incorporates viral marketing techniques must provide quality services–ones that users are continually willing to vouch for, whether implicitly or explicitly.
People generally conspire to misunderstand what they should fear. The people rushing to embrace viral marketing misunderstand how difficult it is to make it work well. You can’t buy it, you can’t fake it, and you can’t pay your users to do it for you without watering down your message. Worse still, anything that is going to benefit from viral marketing must be genuinely useful, well designed, and flawlessly executed, so consumers repeatedly choose to use the service.
Sadly, the phrase “viral marketing” seems to be going the way of “robust” and “scalable” –formerly useful concepts which have been flattened by overuse. A year from now, viral marketing will simply mean word of mouth. However, the concept described by the phrase– a way of acquiring new customers by encouraging honest communication–will continue to be available, but only to businesses that are prepared to offer ongoing value.
Viral marketing is not going to save mediocre businesses from extinction. It is the scourge of the stupid and the slow, because it only rewards companies that offer great service and have the strength to allow and even encourage their customers to publicly pass judgment on that service every single day.