WOM: Paranormal Activity Case Study

Movie studios and music houses are tapping social media not only to generate digital word-of-mouth (WOM) appeal - a strategy first deployed to great success with the Blair Witch Project more than 10 years ago - but also to listen to fans' judgments of film and music and make decisions based on them.
According to Marketing Vox, though Hollywood has always intuitively understood the power of WOM marketing, such buzz usually paled in comparison to the publicity generated by mammoth-sized advertising and promotion budgets. Now, those budgets are not quite so large, and thanks to the viral nature of social web, WOM has become an important communication channel in its own right.
Twitter and Facebook, perhaps not surprisingly, are the two main WOM platforms used by movie studios. Studios are also using Twitter and Facebook to track movies that prove unpopular with viewers as well.
The movie "Paranormal Activity" was a $7.9 million box office hit on its first weekend last year in large part because of the online viral campaign that accompanied it. Part of what made the original "Paranormal Activity" such a topic of conversation last year was how it took audiences by surprise. The trailers didn't give away much of the story, showing how audiences reacted to the movie more than the actual footage. While some of the buzz was genuinely favorable reaction from viewers, some of it was also studio produced. The trailer, instead of typical scenes from the movie, was instead a clip on how defibrillators fell short during the test screenings. The actors didn't pop up on talk shows. And anticipation for the movie grew organically on the Web, and it quickly became the "must-see" movie of last fall. According to CNN, the campaign's ROI is impressive, especially since the movie cost only about $11,000 to produce. When the first movie made an astonishing $107 million at the domestic box office, it was inevitable that a sequel would be haunting theaters once again. Now it's a year later, and "Paranormal Activity 2" is opening tomorrow. And like before, the film's studio, Paramount Pictures, is releasing very little information about what's in this new movie.
WOM entertainment success stories are so prevalent now that other industries have wholeheartedly embraced the techniques, making it a $3 billion-plus phenomenon that is clearly entering a new phase of growth – one that is accompanied by stepped up government regulations.
Transplanting these techniques to other business sectors, though, is not always straightforward. Much depends on the product in question of course; in some instances, the community that generates the buzz is just as important as the buzz itself.
In other cases, marketers find they don’t need to prompt customers too much to work on their behalf. A study out of Penn State University found that 20% of Tweets are brand-related, and many are positive. Bottom line: WOM has become a huge IT category. Another study by PQ Media reported that WOM marketing is the fastest-growing segment of the
 $254 billion marketing services sector of the media industry, with expenditures projected to climb at a compound 
annual rate of 30.4% in 2006-2011 to $3.7 billion.
More so than other forms of marketing, WOM, can be a double-edged sword if its use is seen as inappropriate or manipulative, and over-the-top campaigns are likely to attract regulatory scrutiny if not action. For example, the Federal Trade Commission's new guidance calls for bloggers and tweeters to explicitly state if there are financial ties to the products they are promoting. As it happens, the Word of Mouth Marketing Association (WOMMA) agrees with the FTC - especially since it has become clear the agency expects more of the burden of disclosure to fall upon marketers vs. bloggers.

The Latina Demographic: Not What You Think They Are

It is not unusual -- to put it mildly -- to see Hispanic-market advertising focused on families and moms. But Chicago-based global market research firm Mintel says that doesn't reflect the Latina population in the U.S., either demographically or culturally. 

Leylha Ahuile, Mintel's senior analyst of multicultural reports, said that Hispanic women are more sophisticated, English-dominant, bi-cultural and also retro-cultural than they have ever been. And they are also much more likely to respond to marketers who understand them and speak to them as Latinas. There are 23.6 million Latinas in the U.S. now, which will increase to around 24.5 million by 2014. There are also more U.S.-born Latinas than non-Latina, and that trend will increase with a tightening immigration policy. 

Latinas spend more time on social media than non-Latinas, they are younger than non-Latinas, almost half are not married, and the majority is under 45 years of age. A full 52% is yet to enter their peak earning years so their purchasing power is on the rise; and with Hispanics constituting 25% of children being born in the U.S., most Latinas are now between 5 and 14, so children's' products are important.

"Most advertising to Latinas depicts them as married with two children. But the majority are unmarried, and the educational attainment of Latinas is higher than that of Latinos," said Ahuile. "That means she will have a higher-paying job and discretionary income." 

Between 1997 and 2006, the number of Latinas earning bachelor’s degrees increased by 222% and the number of Latinas earning masters degrees increased by 307%. Advertising messages need to speak to this more sophisticated consumer, according to Ahuile, who added that the notion that all Latinas like spending time with family is a myth. "Foreign-born actually want to spend even less," she said.

As for products, Latinas over-index with beauty and personal care products, which represent power and upward mobility. Latinas with household income of between $50,000 and $75,000 have the highest rate of makeup usage. And Hispanics don't consume less makeup when they get older, as is the case with other ethnic groups. "Those between 50 and 60 actually use more," says Ahuie, "But are beauty advertisers targeting older Latinas?" 

Media consumption among Latinas reflects, paradoxically, acculturation and "retroculturation," -a desire to connect with one's heritage. When it comes to consumption of print, there is an increase in preference for English-language media and decrease in Spanish, but we need to keep in mind that most consume print in both English and Spanish. Ahuile says the preference will tip toward English as U.S. Hispanic births continue to outpace immigration. When it comes to language preferred for TV it's a slightly different story with one-third watching English-language TV and some Spanish, reflecting the popularity of telenovelas. Latinas spend more hours per week in about every type of Internet activity except online games. They spend an hour more per week on social networking than non-Latinas, and they are also much more likely to access the Internet on mobile.