Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign [1 ed.] 9783842849228, 9783842899223

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Sven Wilde

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Viral Marketing within Social Networking Sites The creation of an effective Viral Marketing Campaign

Diplomica Verlag

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

Wilde, Sven: Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign. Hamburg, Diplomica Verlag GmbH 2014 Buch-ISBN: 978-3-8428-9922-3 PDF-eBook-ISBN: 978-3-8428-4922-8 Druck/Herstellung: Diplomica® Verlag GmbH, Hamburg, 2014 Bibliografische Information der Deutschen Nationalbibliothek: Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar.

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Die Wiedergabe von Gebrauchsnamen, Handelsnamen, Warenbezeichnungen usw. in diesem Werk berechtigt auch ohne besondere Kennzeichnung nicht zu der Annahme, dass solche Namen im Sinne der Warenzeichen- und Markenschutz-Gesetzgebung als frei zu betrachten wären und daher von jedermann benutzt werden dürften. Die Informationen in diesem Werk wurden mit Sorgfalt erarbeitet. Dennoch können Fehler nicht vollständig ausgeschlossen werden und die Diplomica Verlag GmbH, die Autoren oder Übersetzer übernehmen keine juristische Verantwortung oder irgendeine Haftung für evtl. verbliebene fehlerhafte Angaben und deren Folgen. Alle Rechte vorbehalten © Diplomica Verlag GmbH Hermannstal 119k, 22119 Hamburg http://www.diplomica-verlag.de, Hamburg 2014 Printed in Germany

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

Executive Summary Primarily, a review on theoretical foundations and the history of Viral Marketing is shown. Based on this a variety of different definitions were analysed to set up a practical definition for this study. Thereafter, possible targets of Viral Marketing are illustrated, followed by necessary elements of Viral Marketing campaigns, and finally by an approach to measure the effectiveness. By means of an online questionnaire, a survey was conducted to collect empirical data from which to analyse Viral Marketing within social networking sites and detect useful information for the practical use of Viral Marketing. The results of the analysis show the accelerating influence of social networking sites and other factors regarding the effectiveness of Viral Marketing. In addition, specific characteristics which make Viral Marketing messages appealing, as well as the preferred types of Viral Marketing messages are illustrated and should help to understand how to create and

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design an effective Viral Marketing Campaign.

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

On résiste à l'invasion des armées; on ne résiste pas à l'invasion des idées.

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Victor Marie Hugo - Histoire d'un Crime (1877)

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

Table of Contents List of tables ................................................................................................ III List of Illustrations ...................................................................................... III List of Abbreviations ................................................................................... IV 1

Introduction .......................................................................................... 1 1.1 Background ................................................................................... 1 1.2 Objective ....................................................................................... 2 1.3 Approach ....................................................................................... 3

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Literature Review ................................................................................. 4 2.1 Etymological Roots of Viral Marketing ........................................... 4 2.2 Evolution of Viral Marketing ........................................................... 6 2.3 Theoretical Foundations ................................................................ 9 2.3.1 Word-of-Mouth .................................................................... 9 2.3.2 Electronic Word-of-Mouth ................................................. 11 2.3.3 Epidemiology .................................................................... 13 2.3.4 Memetics .......................................................................... 14 2.3.5 Diffusion of Innovations Theory......................................... 15 2.3.6 The Tipping Point .............................................................. 18 2.3.7 Social Networks ................................................................ 20 2.3.8 Conclusion ........................................................................ 22 2.4 Defining Viral Marketing .............................................................. 22 2.4.1 Amplitude .......................................................................... 23 2.4.2 Characteristics .................................................................. 25

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2.4.2.1 Communication .................................................... 25 2.4.2.2 Carrier of Information ........................................... 27 2.4.2.3 Diffusion-Channels ............................................... 28 2.4.2.4 Message and Content .......................................... 29 2.4.3 Conclusion ........................................................................ 29

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Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

2.5 Setting Up a Viral Marketing Campaign....................................... 30 2.5.1 Targets of Viral Marketing ................................................. 30 2.5.2 Elements of a Viral Marketing Campaigns ........................ 31 2.5.3 Evaluation of a Viral Marketing Campaign ........................ 33 2.5.4 Conclusion ........................................................................ 37 2.6 Classification of Viral Marketing .................................................. 37 2.6.1 Viral Marketing within the Marketing-Mix .......................... 38 2.6.2 Viral Marketing within the Communication Mix.................. 39 2.6.3 Classification to Related Fields ......................................... 42 2.6.4 Conclusion ........................................................................ 43 3

Viral Marketing in Social Networks .................................................. 45 3.1 Method ........................................................................................ 45 3.1.1 Research Model and Research Questions ....................... 46 3.1.2 Research Design and Dataset .......................................... 49 3.2 Survey Results ............................................................................ 50 3.2.1 Stage 1: Receipt of a VMM ............................................... 50 3.2.2 Stage 2: Decision Point - Consumption ............................ 52 3.2.3 Stage 3: Consumption of Message ................................... 53 3.2.4 Stage 4: Decision Point - Forwarding................................ 56 3.3 Reflecting the Research Questions ............................................. 58 3.3.1 Effects of Social Networking Sites on Viral Marketing....... 58 3.3.2 Preferred Types of Viral Marketing ................................... 59 3.3.3 Characterising Attributes ................................................... 60

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Conclusion ......................................................................................... 62 4.1 Limitations ................................................................................... 63

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4.2 Outlook ........................................................................................ 63 Reference List............................................................................................... V Appendices ................................................................................................. XII

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Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

List of tables Table 1 "definitions of paraphrases" ............................................................. 24 Table 2 "VMC evaluative criteria" ................................................................. 36

List of Illustrations Figure 1 "Marketing subdivisions" .................................................................. 5 Figure 2 "Typology of eWOM channels" ....................................................... 12 Figure 3 "Triangle of Epidemiology" ............................................................. 13 Figure 4 "Adopter Categorisation regarding their Risk Aversion" ................. 18 Figure 5 "Three Models of Network Structure" ............................................. 20 Figure 6 "Viral growth" .................................................................................. 33 Figure 7 "VMC evaluation framework" .......................................................... 35 Figure 8 "Sherwin Marketing Matrix" ............................................................ 39

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Figure 9 "Typical VMM Episode" .................................................................. 46

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Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

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List of Abbreviations AMA

American Marketing Association

B2C

Business-to-Consumer

BC

Before Christ

bn

Billion

C2C

Consumer-to-Consumer

e.g.

For example (abbr. of Latin "exempli gratia")

et al.

And others (abbr. of Latin "et alii" (m) / "et aliae" (f))

GmbH

Gesellschaft mit beschränkter Haftung (German legal form)

i.e.

That is (abbr. of Latin "id est")

IIW

Institute of Information Management

Inc.

Incorporated

m

Million

MAU

Monthly Active Users

NF

News feed

p.

Page

PM

Private Message

pp.

Pages

ROI

Return on Investment

SMS

Short Message Service

USA

United States of America

VM

Viral Marketing

VMC

Viral Marketing Communication

VMM

Viral Marketing Message

WOM

Word-of-Mouth

WOMMA

Word of Mouth Marketing Association

IV

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

1 Introduction Already in the 19th century Victor Hugo, a French poet, noticed how powerful ideas can be since he imputes intangible thoughts more power than armed forces. Translating this onto marketing, the classic mass-media marketing can be seen as an army trying to whip brand awareness into the potential customers mind to stimulate sales. Effortlessly transferring a contagious idea into a customer's mind, though, is the idea of Viral Marketing.

1.1 Background Since new media and the Internet have entered our everyday life the marketing environment has changed vastly. On the one hand, marketers' possibilities to solicit their products have risen widely. On the other hand, consumers are getting flooded with an ever-increasing number of marketing stimuli everyday (Brassington/Pettitt 2006, p. 668). No wonder brains start to prevent themselves from overstimulation by setting up perceptual filters. Otherwise they would not be able to process all the information of about 2.500 to 5.000 affecting advertising messages everyday (Solomon et al. 2009, p. 129; Langner 2009, p. 14). According to Langner (2009, p. 14), experts estimate that about 75% of the money spent on advertising to attract customers attention are out of all proportion, whereof about 22bn of the 29bn Euro spent in Germany drain away, unnoticed by any consumer. Though, classic conditioning marketing does not seem to effectively affect consumers anymore. One could even argue that the opposite will happen: the consumer learns subconsciously to ignore certain kinds of advertisements. This is where Viral Marketing (VM) comes into play. Among some other new marketing trends, Viral Marketing tries to address consumers directly. Since Copyright © 2013. Diplomica Verlag. All rights reserved.

people gather information by communicating with their friends and acquaintances, word-of-mouth became one of the most influential leverages of consumer decisions (Langner 2009, p. 16). Viral Marketing utilises the principle of word-of-mouth. Appealing messages or products are passed along from consumer to consumer, whereby an impersonal advertisement gets replaced by a personal recommendation or directly addressed message. 1

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

High trust and consumer tailored information, hereby, are only two of many advantages. Viral Advertising, as a part of VM, uses any kind of media, such as video, picture or text-message, to advertise a specific product, brand or company. Viral Marketing as a whole furthermore includes viral products and services. These are mostly digital and designed in a manner which makes the user recommend the product to his friends and acquaintances, e.g. by integrated notification functions, personal invitation options, etc. (Aral/Walker 2011, p. 34f.). The product utility thereby mostly depends on network-effects which means, the consumer benefits rise with the amount of friends using the product, too. Social games take a special position in the group of viral products.

1.2 Objective The Internet as a technological pillar enables a fast and far-ranging diffusion of information. The rapid developments in the Internet technology, thus, have high influence on Viral Marketing. When it became apparent that Viral Marketing was highly efficient, many marketers jumped on the bandwagon to give it a try while theory about the motivation, attitudes, and behaviours of the people engaged in it only started to be analysed afterwards (Phelps et al. 2004, p. 333). This led to disagreement about the definition of viral marketing because marketers often had slightly different conceptions (Golan/Zaidner 2008, p. 961). Accordingly, a first objective of this study will be an analysis on the topic of Viral Marketing to set up a definition that fits its actual purpose and delineates it from adjacent fields of marketing. The fast developments of online technologies do not only comprise the hardware technology, but also the offered services online. Since social Copyright © 2013. Diplomica Verlag. All rights reserved.

networking sites were almost inexistent ten years ago, a modern world without them would be unimaginable today. Research on Viral Marketing within social networking sites is rather rare since most of the actual studies focus on the distribution via email or blogs (e.g. Phelps et al. 2004, De Bruyn/Lilien 2008, p. 156). Though, secondly, an empirical study was set up to evaluate Viral Marketing within social networking sites, respectively within 2

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

Facebook as the biggest and most common example. It focuses on the influence social networking sites have on the way a Viral Marketing message is diffused, and additionally on characteristics of the sender, receiver, and the Viral Marketing message itself.

1.3 Approach At first a literature review will give a clear view on Viral Marketing and the adjacent topics. After describing the etymological roots of Viral Marketing, a brief conclusion of Viral Marketing's history and evolution will give first understandings of what Viral Marketing is. Hereupon, the following theoretical foundations will illustrate the underlying theories and give deeper insights on functionality of Viral Marketing. In chapter 2.4 a selection of 25 definitions will be analysed to set up a practicable definition for this study. Then, the setup of a Viral Marketing campaign with a focus on the targets, campaign elements, and campaign evaluation will be shown. To conclude the theoretical part, a classification will show the integration of Viral Marketing in the marketing mix and furthermore its classification to adjacent fields of marketing. The third chapter addresses the empirical study. At first a research model was developed and research questions were formulated. Then the research setup is explained before the survey results are evaluated lace in chapter 3.2. The discussion of the findings with regard to the research questions is

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shown in the last sub-chapter before a conclusion completes the study.

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Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

2 Literature Review Since broadband Internet found its way into almost every household and new Web 2.0 technologies boosted possibilities of online-communication and interaction, VM quickly became interesting for the marketing branch. But as it is still a quite new topic, not much research has been done yet. However, many marketers try to create viral marketing campaigns because it became famous as a cheap but far-reaching marketing method during the new economy boom. The term "Viral Marketing" is manly used in practice which is why there are many different apprehensions among practitioners and also why theoreticians have not come to a mutual understanding yet (Oetting 2008, p. 67f.). The following chapter reflects some of the most common views to define a general understanding of Viral Marketing. Furthermore, this literature review will explain the underlying theoretical principals and put them into context as to how they affect VM.

2.1 Etymological Roots of Viral Marketing Viral, the adjective of the noun virus, is a derivation of the Latin word "vīrus", which earlier acceptation was "slime, poison; akin to ooze" (Dictionary 2012a). Today's etymologic sense of viral is: "of the nature of, or caused by, a virus" (Dictionary 2012a) and is further notionally related to a biological virus or a computer virus. However, the term Marketing is not that easy to define as it is manifold and its philosophy has evolved and changed over the years. The roots of marketing can be traced back to the beginning of the 20th century when it Copyright © 2013. Diplomica Verlag. All rights reserved.

was basically a functional discipline to stimulate sales in the agricultural sector. Modern marketing was elaborated from the 1950s onwards. With the development of the 4P's concept (Price, Product, Place and Promotion) in the early 1960s, McCarthy accounted for the development of the modern marketing with the change from a function-oriented view to a rather management-oriented state of mind (Meffert 1999, p. 5f.). 4

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

In the late 1960s and the early 1970s Philip Kotler, a main representative of the modern marketing, delineated the "Generic Concept of Marketing. He categorized three stages of marketing consciousness whereby the third, allembracing, stage specifies Marketing as "[…] a relevant subject for all organizations in their relations with all their publics, not only customers." (Kotler 1972, p. 47). Pepels (2004, p. 3) adopted Kotler's approach of "Generic Marketing", but subdivided it in more detail. He defines "Generic Marketing" as the overall term of marketing, Kotler's third stage of consciousness alike. The next stage, "Social Marketing" excludes all private transactions and thus is about all altruistic and also economic factors. Furthermore, as the Figure 1 shows, he subdivides it into "Business" and "Non-Business" Marketing whereby the latter equals the first stage of consciousness of Kotler's approach. Figure 1 "Marketing subdivisions"

Source: adopted from Pepels (2004, p. 3)

In addition, Pepels segregates this last stage into "Instrumental" and Copyright © 2013. Diplomica Verlag. All rights reserved.

"Corporate Marketing". While Corporate Marketing is about presenting the company in public, Instrumental Marketing is more about the packages of measures itself to influence the market, respectively the suppliers or buyers. As identified, marketing is not just a field of functions but a complete management view. How far this can be applied to Viral Marketing will be shown in the sequel of chapter 2. Prior to this, a short view on the history of 5

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

Viral Marketing in praxis and theory as well as theoretical foundations will give insightful information about the evolution and the actual scope of Viral Marketing.

2.2 Evolution of Viral Marketing The first time the term "Viral Marketing" came up was in PC User magazine in 1989 (Okazaki 2008, p. 118; Kirby 2006, p. 89): "At Ernst & Whinney, when Macgregor initially put Macintosh SEs up against a set of Compaqs, the staff almost unanimously voted with their feet as long waiting lists developed for use of the Macintoshes. The Compaqs were all but idle. John Bownes of City Bank confirmed this. ‘It’s viral marketing. You get one or two in and they spread throughout the company.’" (Carrigan 1989) Thus, in its hour of birth Viral Marketing was seen as a method of seeding a product to get others involved to copycat it. Seven years later in 1996, when Jurvetson and Draper (1997) analyzed the marketing campaign of Hotmail’s free email service1, they specified VM plainly as "network-enhanced word-ofmouth" (Cruz/Fill 2008, p. 745). Pastore (2000) agrees with Jurvetson and Draper as he also sees word-of-mouth in charge for the online success of the Hotmail campaign. He calls the new online-version of word-of-mouth "efluentials" and denotes the main difference in comparison to the old, "offlineworld" word-of-mouth in the potential to influence more friends. On the contrary, Helm (2000, p. 159) defined it a bit differently: "Viral Marketing can be understood as a communication and

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distribution concept that relies on customers to transmit digital products via electronic mail to other potential customers in their

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Bhatia and Smith developed the free online e-mail client in 1996 with a seed capital of 300.000 US$. Within just 18 month and a marketing budged of just under 500.000 US$ they gained 12m customers by simply adding the advertising slogan "Get your Private, Free Email from Hotmail at http://www.hotmail.com" to each email sent by a customer (Rosen 2000, p. 30; Jurvetson/Draper, 1997).

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social sphere and to animate these contacts to also transmit the products." In Helm’s opinion, Viral Marketing is not just about online word-of-mouth but rather about the distribution of a product, which should be offered for free and via no other distribution channel than the Internet (Helm 2000, p. 159). Thus, her definition encourages viral marketing to be a method of both, marketing and distribution but also limits it to only digital products (Porter/Golan 2006, p. 27). Much cited, Wilson (2000) describes Viral Marketing in a broader sense as: "[...] any strategy that encourages individuals to pass on a marketing message to others, creating the potential for exponential growth in the message’s exposure and influence." As one can notice, a variety of different definitions exist. This might be due to the fact, that in this early stage almost all literature focused on related success stories but neglected definitions and backgrounds (Helm 2000, p. 158). Major influence on Viral Marketing, as it is known today, was brought through the Web 2.0. Schultz et al. (2011, p. 218) state that with the beginning of the Web 2.0 era the importance of Viral Marketing rose even further. O'Reilly (2007, p. 24.) notes in his essay about the first Web 2.0 Conference in 2004 that "network effects from user contributions are the key to market dominance in the Web 2.0 era". Although he is not directly referring to Marketing, network effects and user contributions are two main influencers which changed the online marketing environment for marketers. For example social media platforms, which are stated by O'Reilly (2007, p.18) as a part of Web

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2.0, are declared to have strong influence on a "marketing managers' control over the content, timing and frequency of information" (Mangold/Faulds 2009, p. 359f.) as they amplify consumers ability to communicate among each other while being completely independent from third parties. Though, according to Mangold and Faulds, the consumers' behaviour has been profoundly affected, as well as the consumers' power within the market rose 7

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

through the new possibilities of Web 2.0. This bestows further strength on VM. Phelps et al. (2004, p. 334) outs it down as "[...] the process of encouraging honest communication among consumer networks, and it focuses on email as the channel." The second part of his definition reveals that back then in 2004 social networking sites had no big influence on Viral Marketing yet. One year later, Dobele et al. (2005, p. 144) specified VM as "[..] a strategy whereby people forward the message to other people on their email lists or tie advertisements into or at the end of messages. From a marketing perspective, it is the process of encouraging individuals to pass along favourable or compelling marketing information they receive in a hypermedia environment: information that is favourable or compelling either by design or by accident." Still, the influence of social media platforms is not directly named, but can be interpreted as the hypermedia environment. However, Dobele et al. see the widespread use of SMS as the main accelerator for word-of-mouth in this time. Nowadays, communication through online social networks outreach all previous ways of communication by far with respect to time of information spread and reach. Kaplan and Haenlein (2011, p. 253f) back this up with the "Old Spice" campaign of Procter & Gamble from July 2010. Over 23m people watched the video on youtube within only 36 hours. In comparison: the biological virus H1N1 had a worldwide circulation of just under 190.000 infections per week during his peak level (WHO 2011). Golan and Zaidner (2008, p.

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961) linked the success of Viral Marketing to online communication platforms as they see the definition of VM hooked on the evolution and development of peer-to-peer communication on online communication platforms. Kaplan and Haenlein (2011, p. 254) express a strong relationship between word-of-mouth, social media and Viral Marketing and consequently define Viral Marketing as: 8

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

"[...] electronic Word-of-Mouth in which some form of marketing message related to a company, brand or product is transmitted in an exponentially growing way, often through the use of social media applications." Thus, to define Viral Marketing, word-of-mouth as its fundamental mode of operation, but also theories of information diffusion must be considered. To gain a deeper understanding of Viral Marketing, these topics will be analysed in more detail in the following chapter before finally setting up a practicable definition.

2.3 Theoretical Foundations This chapter briefly analyses the theoretical foundations to gain a general understanding of related topics prior to adequately define Viral Marketing in this study. As previously mentioned, word-of-mouth is strongly linked to VM (see also Cruz and Fill 2008, p. 746) and needs deeper insight. Furthermore, as the process of the spread of a message is elementary to Viral Marketing, theories and models related to its diffusion will be introduced: General Information about Epidemiology will be followed by "Memetics" - Dawkins model about cultural information transfer. Then, Rogers "Diffusion of Innovations Theory" as a model of growth with saturation and Gladwell's "The Tipping Point" as an utilisation of the previously named models to explain the spread of information will be introduced. The theoretical framework will be concluded with a chapter on social networks which form another important piece in the framework of Viral Marketing. 2.3.1 Word-of-Mouth

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The Oxford English Dictionary dates the first written occurrence of the term "word of mouth" back to 1533 by defining it simply as "oral communication" (Nyilasy 2006, p. 163f.). From a marketers point of view the information exchange is restricted and somehow related to a company, brand, product or service. Arndt (1967a, p. 3) defined it accordingly as:

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Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

"Oral, person to person communication between receiver and a communicator whom the receiver perceives as noncommercial, concerning a brand, a product or a service". A recent definition of the American Marketing Association (AMA 2012) defines word-of-mouth communication as: "[..] information imparted by a consumer or individual other than the sponsor. It is sharing information about a product, promotion, etc., between a consumer and a friend, colleague, or other acquaintance." As it was to be expected the understanding of word-of-mouth has not changed over time. Still today its main characteristics are the personal communication, the commercial regard to product, brand, or service, and non-commercial motivated communicators. Bruyn and Lilien (2008, p. 152) furthermore state influence not only on consumers' purchase decisions (Arndt 1967b, p. 295) but also on the consumer pre-consumption expectations (Anderson/Salisbury 2003, p. 122), pre-consumption product judgments (Herr et al. 1991, p. 456) and post-consumption product judgment (Bone 1995, p. 215f.). But, since not only positive information about products and services is passed on, WOM can be split into positive word-of-mouth (PWOM) and negative word-of-mouth (NWOM). Herr et al.'s (1991, p. 460) study showed that NWOM weights even heavier than PWOM. According to them, negative information about only one product attribute biases judgement stronger than many positive exhibited features. Regarding to East et al. (2008, p. 116) other studies support this fact. However, they also claim that the previous

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studies missed out the higher frequency of positive WOM. As a result, the position of most message-addressees is positive which gives negative WOM higher impact. With a new designed set-up, balancing out the disparate amount of PWOM and NWOM, their survey revealed a higher impact of PWOM. However, this illustrates the powerful impact WOM can have and the chances it offers to marketers to use this phenomenon for their purpose. 10

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

The motivations why people forward WOM are also interesting. Canarella and Piccioni (2008, p.126f.) mention for example personal engagement, commitment towards others, personal improvement, altruism, loyalty and many more. East et al. (2008, p. 217) furthermore state satisfaction and dissatisfaction as catalysts of WOM but identify the main trigger as 'perceived need' and 'random occurrence during conversations'. Furthermore, WOM can be differentiated between amplified and organic word-of-mouth. Organic WOM refers to naturally appearing WOM while amplified WOM is artificially generated by a company (WOMMA 2007, p. 5). With regard to VM only the latter is relevant to this study. 2.3.2 Electronic Word-of-Mouth With the evolvement of the Internet the variety of communication channels has broadened enormously and since new communication platforms affect the characteristics of word-of-mouth. Thus, to describe the new phenomenon new terms such as "word-of-mouse", "Internet WOM", and eWOM or "electronic word-of-mouth" (Helm 2000, p. 159) were used. Henning-Thurau et al. (2004, p. 39) define it on the basis of Stauss (2000, p. 243) as "[...] any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet." Accordingly, the main characteristics are still today the personal communication, the commercial perspective, and non-commercial motivated communicators. But according to Helm (2000, p. 159), Internet technologies opened up new areas for word-of-mouth. WOM is no longer bound to personal Copyright © 2013. Diplomica Verlag. All rights reserved.

networks but can potentially reach an unlimited number of Internet users (Stauss 1997, p. 28) since the Internet facilitates one-to-many and many-tomany communications. Furthermore, information sharing among unacquaintted consumers can now take place as well. The possibility on almost all major online shops to read product reviews before buying and rate the bought product later on, exemplifies the information exchange among 11

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

unbeknown. Besides the broader scope of eWOM it also facilitates asynchronous communication. The following illustration shows the new communication channels of eWOM sorted by either scope of communication and level of interactivity: Figure 2 "Typology of eWOM channels"

Source: adapted from Litvin et al. (2008), p. 9

WOM most commonly takes part as a synchronous one-to-one communication, e.g. a conventional chat or telephone call between two friends. But also others, such as synchronous many-to-many communications, e.g. panel discussions, or asynchronous one-to-one communications, e.g. letters, are present. The essential improvement of eWOM is due to something else: it is the location, now it is online! This changes the structure of information because now it is stored on the web. It becomes searchable and storable and, hence, accessible from all over the world, independent of time and place, and at very low costs (Litvin et al. 2008, p. 10). But the new technology also has its downside. Communicators do not have to appear in person but can instead post their arguments anonymously which

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might lead to purposely misleading messages (Litvin et al. 2008, p. 10). Furthermore all the previously named advantages of eWOM also apply to its negative counterpart. Negative eWOM can occur on consumer opinion sites (e.g. www.ciao.de), on special websites or so called 'hate sites', e.g.

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www.unitedbreaksguitars.com2, but also in forums, chats etc. whereby multiplication effects arise as well (Helm 2000, p. 159). Furthermore the nonverbal gestures of communication cease to apply. 2.3.3 Epidemiology The word epidemiology comes from the three Greek words "epi", meaning "on, upon, or befall", demos, meaning "the people", and logos, meaning "the study of". Thus, epidemiology literally refers to "the study of that which befalls people" - or simply as "the basic science or foundation of public health" (Merrill 2010, p. 3). It involves descriptive methods to characterise the distribution of health-related states or events and also analytic methods to identify causes of health-related states or events (Merrill 2010, p. 3). Hippocrates (460-377 BC) is said to be the first epidemiologist as he deviated from the general belief of supernatural fate and started to explain disease occurrences from a rational perspective. He introduced the terms epidemic and endemic (Merrill 2010, p. 24f.) An epidemic is defined as an increase of health-related states or events above a common or expected occurrence-level in a defined population while an endemic is specified as the expected or usual level of health-related states or events within a community or region. If an epidemic visits upon many regions, across whole continents or even the whole world, it is called a pandemic (Merrill 2010, p. 6).

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Figure 3 "Triangle of Epidemiology"

Source: Timmreck (2002), p. 7 and Merrill (2010), p. 8

2

During a journey United Airlines broke the expensive guitar of Dave Caroll, a Canadian local musician. After United doggedly refused to replace it, he threatened them to produce three music videos about this story and to put them on youtube. In July 2009 he did so. After some media got wind of it, the videos spread virally and were viewed over 10m times. Today still a homepage exists and offers workshops on how to harness social media (Carroll 2012).

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Whether an epidemic happens or not depends on a multitude of circumstances. The model of the "epidemiological triangle" reduces the complexity to four different influencing parameters: First, the agent: He is the cause of the disease such as bacteria, viruses, etc. Second, the host: It is an organism that harbours the disease, e.g. a human or an animal. Third, the environment: It depicts the biological, social, cultural, and physical aspects of the surroundings and conditions around a host which can cause or allow a disease to happen. Fourth, the time: It accounts for different aspects of time, such as incubation periods, life expectancy of the host, and duration of the course of the illness or condition (Timmreck 2002, p. 6ff.). The transmission of a disease can occur through direct physical contact to the host or its waste products, but also indirectly. Hereby it can be differentiated between Airborne transmission, infecting the host through microscopic pathogen-carrying droplets in the air, Vector-borne transmission, transmitting the infection through an arthropod (e.g. a mosquito), and Vehicle-borne transmission, infecting the host through fomites such as food or water (Merrill 2010, p. 12). To stop an epidemic it is sufficient either interfering, altering changing or removing one element of the triangle (Timmreck 2002, p. 8). To express epidemics in numbers several different ratios or rates are used in the theory of epidemiology, especially to illustrate infectivity, recovery and mortality. To keep the theoretical extent in check, those will not be analysed deeper in this chapter. Instead, appropriate ratios will be explained in sequel with regard to the according topic. 2.3.4 Memetics In 1976 Richard Dawkins published the first Edition of his book The Selfish

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Gene in which he coined the term Meme, analogous to genes, as little units of information. Accordingly, Memetics is about the replication of memes and their self-propagation by jumping from brain to brain. Dawkins illustrates this process furthermore with the words of his colleague N. K. Humphrey as parasitized brains which serve as hosts and, thus, help the memes to propagate (Dawkins 2006, p. 192). As an example he states the "idea of 14

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God" as it is not known when this meme arose but anyhow it survived many years through spoken and written word because of its psychological appeal and its "superficially plausible answers to deep and troubling questions about existence" (Dawkins 2006, p. 193). Furthermore, Dawkins defines a meme pool as the sum of all existing memes and assigns a meme complex as a subcategory to it. Thus, a meme complex is formed by many associated memes. Thereby these memes support each other since they have better chances to survive as a complex. Dawkins again uses the "God meme" to illustrate this and states an "organized church, with its architecture, rituals, laws, music, art, and written tradition" as a stable meme complex of mutually assisting memes (Dawkins 2006, p. 197). Important with respect to the replication of the meme is the ability of humans to imitate. As humans are not able to review every correlation in daily life they adopt and imitate memes of others. As with genes, they can also mutate or, respectively, be imitated incomplete or modified. Furthermore the memes can differ in their lifespan. Some memes spread rapidly but do not last for a long time, while others can survive for thousands of years (Dawkins 2006, p. 193f.). Here parallels to the process of natural selection of Darwin's Theory of Evolution can be drawn (Langner 2009, p. 20f.). Dawkins (1982, p. 111) added later on that the survival success of a meme also depends on the other memes within the meme pool. For example, if a society would be dominated by "Marxist or Nazi genes", the success of the replication for new memes would depend on their compatibility with the other memes within the pool. 2.3.5 Diffusion of Innovations Theory

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Everett M. Rogers analyses, in his book Diffusion of Innovations from 1962, how innovations can be disposed successfully and what needs to be considered. Hereby, he defines innovations as "an idea, practice, or object that is perceived as new by an individual or other unit of adoption" (Rogers 2003, p. 12) and describes its diffusion as "(1) an innovation (2) that is

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communicated through certain channels (3) over time (4) among the members of a social system" (Rogers 2003, p. 36). (1) As an innovation to be successful, i.e. to spread within a population, Rogers states five determining attributes (Rogers 2003, p. 15f.): x

Relative Advantage: The perception of the innovation must excel the idea it displaces.

x

Compatibility: The idea must be compatible to the existing norms, values, and practices to ensure a rapid adoption.

x

Complexity: The ease of use of an innovation must be simple in such a way that no new skills need to be developed to adopt it.

x

Trialability: The reduction of the uncertainty of a possible adopter.

x

Observable results: The reduction of uncertainty and to encourage word-of-mouth.

(2) To communicate an innovation, Rogers differs between mass media channels, which are more effective in creating knowledge, and interpersonal channels, which in contrast are more prosperous in influencing a customer's attitude towards an innovation. As consumers mostly prefer subjective evaluations of close peers instead of an expert's opinion, the communication structure between consumers is important. Rogers hereby emphasises that most communications are not heterophily, but homophily (Rogers 2003, p. 18f.). That is the degree of which the communicating people are similar in specific sociographic attributes, such as education, social status, beliefs, language, etc. The more homophily people are, the easier they can communicate amongst each other. Thus, homophilous communication networks are efficient in horizontal communication within their group, but impede vertical

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communication to other groups within a social system. On the contrary, heterophilous communication links are less efficient but allow the (vertical) diffusion of innovations through social systems (Rogers 2003, p. 305f.) (3) Furthermore, he describes the "innovations-decision-process" as an information-seeking and -processing process to decrease uncertainty about a new idea. He illustrates this process in five steps (Rogers 2003, p. 20): 16

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1. Knowledge of the existence of an idea and its functionality. 2. Persuasion can form a favourable or unfavourable attitude of an individual towards the innovation. 3. Decision whether to adopt or to reject the idea. 4. Implementation is the start of usage of innovation. 5. Confirmation is quested by the consumer to reinforce the decision. Otherwise a reversion to the previous decision might be the result. (4) A social system is a network of interrelated units with the goal to jointly solve problems. Within it, the diffusion of innovations depends on its social and communication structure. Norms are an important aspect of structure as they illustrate established behaviour patterns for the members. Important ones are the change agent, who tries to influence consumer's innovationdecisions according to his sake whereas the aide is pretty much alike, just in a less professional way. Thereby, Opinion Leadership is the degree of the influential power, e.g. socioeconomic status or technical expertise (Rogers 2003, p. 26ff.). With these structures in mind, Rogers specifies three types of innovation-decisions (Rogers 2003, p. 28f.): 1. Optional innovation-decisions: The decision, whether to adopt or reject an innovation, is discretely made by a member of the social system independent of others. 2. Collective innovation-decisions: The members of a group jointly come to a decision whether to adopt or reject an innovation. 3. Authority innovation-decisions: A few people within a group are in the possession of opinion leadership and decide whether to adopt or reject an innovation. 4. Contingent innovation-decisions: Those decisions are a sequential Copyright © 2013. Diplomica Verlag. All rights reserved.

combination of at least two of the previous innovation-decisions whereby choices are made after one of the prior innovation-decisions. While deciding whether to adopt or reject the innovation, a member always has to bear in mind the consequences which the adoption of an innovation entails, as the innovation brings changes to the individual himself and to the whole social system. 17

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Figure 4 "Adopter Categorisation regarding their Risk Aversion"

Source: Rogers (2004), p. 281

While each adopter can come to a decision by following this process, the moment of decision still can differ. The particular rate of adoption depends on the behaviour of the people respectively to their risk aversion whether they see little danger in adopting innovations very early or whether they are unwilling to take risks and must be persuaded over a long time. Figure 4 illustrates this by dividing the adopters in groups according to their risk aversion (Rogers 2003, p. 281): Innovators, Early Adopters, Early Majority, Late Majority, and Laggards. 2.3.6 The Tipping Point In the book The Tipping Point - How Little Things Can Make a Big Difference from 2000, Malcolm Gladwell advances the view that diseases and trends respectively memes diffuse after the same rules (Langner 2009, p. 21f.) He comes to this conclusion by analysing the diffusion of several informationepidemics. In doing so, he detected three "agents of change" which are enablers to reach the "Tipping Point" or the critical mass from whereon the

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epidemic starts to spread exponentially (Gladwell 2000, p. 12f.): 1. The Law of the Few is about the people who spread ideas. A few "exceptional people" exist which have great influence on their peers. This can arise from many different things, e.g. how sociable, energetic, knowledgeable or influential they are (Gladwell 2000, p. 21). In detail Gladwell differentiates between three different types: 18

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x Connectors: People with many friends and acquaintances. Their social circles are often four to five times larger than those of others (p. 41). They are highly connected to many different worlds, subcultures and niches (p.48) as they are "masters of the weak tie".3 This makes them socially powerful (p. 54) and enables them to start word-of-mouth epidemics (p. 59). x Mavens: They accumulate knowledge about many different products and prices (p.60), they are socially motivated to help and educate their acquaintances (p. 62) but not to persuade them (p.69), and they have many social ties (p. 62). By also providing social skills they are able to start word-of-mouth (p. 67). x Salesmen: They have skills to build trust and rapport in a very short time which makes it hard to resist them (p.84). In doing so, they can persuade others if they are unconvinced of what they have heard (p.70). 2. The Stickiness Factor describes the characteristics of successful ideas: A memorable message which sticks to a mind and "doesn't go in one ear and out the other" (Gladwell 2000, p. 24f.), is essential to create a contagious message. 3. The Power of Context is about the environment: Conditions and circumstances, e.g. the place and time, have great influence on the occurrence of epidemics. Already the smallest change in context can either tip off or impede an epidemic (Gladwell 2000, p. 139f.) Those three factors combined can lead to the critical mass, threshold, or boiling point. From this point on, "ideas and products and messages and

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behaviours [can] spread like viruses do" (Gladwell 2000, p. 7).

3

Granovetter analysed stronger and weaker ties in his paper The Strength of Weak Ties. He comes to the conclusion that stronger ties breed local cohesion while weaker ties are "indispensable to individuals' opportunities and to their integration into communities", meaning that they connect various different groups and, though, facilitate a broader availability of information (Granovetter 1973, p. 1378).

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2.3.7 Social Networks Simplified, a social network is a system of social connections or relations between nodes, which can be individuals, organisations, etc. (Marin/Wellman 2008, p. 11f.). Important parameters in the social network analysis are for example, density, average path length, homogeneity, centrality, and size (Marin/Wellman 2008, p. 21f.). Further important principles of social network analysis are according to Wasserman and Faust (1994, p. 4): x

Interdependent actors, rather than autonomous, independent nodes.

x

Relational connections between nodes for flow of materials, which can be either material or non-material.

x

Structure as lasting patterns of relations between the nodes.

x

Networks providing constraints on or opportunities for individual action (from the view of an individual).

Boase and Wellman (2001, p. 43f.) differentiate between the two archetypes, Densley Knit and Ramified networks, as the following picture shows:

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Figure 5 "Three Models of Network Structure"

Source: adapted from Boase/Wellman (2001), p. 44

Densely Knit or also tightly bounded groups exist of vertices, respectively individuals or organisations, which know each other pretty well and are in frequent contact amongst each other, but do not have much contact to outsiders. According to Rogers (Chapter 2.3.4), the group can be described 20

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as homophilous. Ramified networks, in contrast, can be characterised as sparsely knit or loosely bounded whereby the members have little contact amongst each other, but interactions with outsiders do happen regularly. Those networks can be described as heterophilous. The glocalized network, which is a combination of both archetypes, is the more actual and general case. Some vertices of the densely knit clusters have ramified edges, respectively social interactions or connections to outsider groups or individuals and form a large connected network (Boase/Wellman 2001, p. 44). Granovetter’s (1973) analysis of interpersonal networks and the importance of the strength of ties came to similar findings. He considers the weak ties as important links which build a linkage of micro (densely knit) and macro levels (ramified or glocalized) of social networks (Granovetter 1973, p. 1377f.). The advantage of weak ties thereby lies in its numerous and varied occurrence since they are not limited to the social circle and therefore can provide better information and greater expertise. Strong ties on the other hand know the decision maker and, thus, can give customer-tailored information. Though, weak ties enable the flow of information whereas strong ties are more conducive to the flow of influence (Duhan et al. 1997, p. 284). Barabási and Albert (1999, p. 509f.) state, that, besides genetic networks, social networks or the world-wide-web can also be described as complex networks. Because of their largely unknown topology and complexity of interactions, which are constantly changing and increasing due to new social connections within the network and newcomers entering the network (and connecting preferentially to already well-connected vertices), they describe them as scale-free networks. Its main characteristics are the power-law connectivity distribution and the existence of special vertices with an above-

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average degree of connectedness (Pastor-Satorras/Vespignani 2001, p.1). In terms of Boase and Wellman, those nodes, also named hubs, reflect the vertices which build the ramified edges and connect the densely knit group. Hence, those theories support Gladwell's Law of the few as some hubs within social networks seem to have greater influence than others and, thus, are able to assist epidemic, viral spreading of information within social networks. 21

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2.3.8 Conclusion The power of Viral Marketing arises from the compilation of various factors which were introduced in this chapter. The subchapter about epidemiology has illustrated the basic requirements which enable viruses to spread: the environment, host, agent and time. The subchapter thereafter about Dawkins theory focused on how an innovation or meme spreads, survives and adapts in the environment. Rogers' and Gladwell's theories comprise all the basic requirements and set up theories about the diffusion of innovations or memes. Rogers concentrates on the diffusion of the innovation within a complex social system and the process of adopting an innovation or not. Gladwell, in addition, exposes three types of agents which are especially important to facilitate viral spreading: Connectors, Mavens, and Salesmen. The final subchapter about social networks shows the composition of social networks as a connection of micro and macro-level networks, making both, the strong and the weak ties important for the diffusion of innovations within it.

2.4 Defining Viral Marketing While the previous chapter cites many definitions over time, it is notable that a generally accepted definition has not yet been established. Although Viral Marketing is on everyone's lips, disagreement exists among researchers and practitioners about what it really is (e.g. Cruz/Fill 2008, p. 744; Kirby 2006, p. 88f.; Oetting 2008, p. 67; Phelps et al. 2004, p. 334). The WOMMA (2007, p.3) argue that many marketers use different terms, whilst they define wordof-mouth as a generic term and integrate Viral Marketing as a subcategory along with others.4 Kirby and Marsden also differentiate between Viral

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Marketing, Word-of-Mouth Marketing and Buzz Marketing, but unite them under the term "connected marketing", a neologism they have created newly (Marsden 2006, p. xviii).

4

The other subcategories are: Buzz Marketing, Community Marketing, Grassroots Marketing, Evangelist Marketing, Product Seeding, Influencer Marketing, Cause Marketing, Conversation Creation, Brand Blogging and Referral Programs.

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On the contrary, other marketers see an interchangeable usage of Viral Marketing with other terms. For example, Helm (2000, p. 159) denotes a synonymous usage with terms such as "propagation, aggregation, or organic marketing". Porter and Golan (2006, p. 27) state that terms such as "'word-ofmouth', 'creating a buzz', 'leveraging the media', and 'network marketing'" have been used synonymously to Viral Marketing and Kozinets' et al. (2010, p. 71) mention furthermore "social media marketing, [...] and guerrilla marketing" as synonyms. Arguments about what Viral Marketing really is, even go as far as characterising it as art rather than science (Diorio 2001). As this shows, many new, slightly different, but related fields in marketing arose in the recent past. Most of them are somehow linked to the rise of the Internet but yet a clear distinction has not become accepted. According to the doctrine of definitions of Karl Popper, an Austrian philosopher and professor at the London school of economics, a definition does not determine the application of a term but the application of a term determines its definition. In other words, only practice-definitions exist (Popper 1994, p. 366f.). Kirby (2006, p. 88f.) notes correspondingly that the definition is not too important as the only thing that matters is what marketers and practitioners do and why. Thus, to find a proper definition 25 frequently cited specifications and characterisations have been examined and the results will be illustrated in the next subchapter. For reasons of simplification, the 25 analysed definitions and specifications will be abstracted under the term "definitions" although not all authors explicitly set up an own definition but circumscribed Viral Marketing within a chapter of their book or paper. An overview of the authors that have been analysed can be found in annex A1.

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2.4.1 Amplitude Recalling chapter 2.1 about the etymological sense of Viral Marketing, the question arises whether the amplitude of VM compares to the holistic view of Generic Marketing or rather to a more narrowed field, e.g. Business Marketing. As illustrated in the previous chapter, some equate it even to viral advertising which then suggests being a narrow composed approach, 23

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respectively a form of communication. Eckler and Bolls (2011, p. 2) also examined two different breadths of VM-frameworks in literature. One group has a narrower perception and puts Viral Marketing on a level with Viral Advertising while the other framework sees VM as a "broad array of online WOM strategies" (Golan/Zaidner 2008, p. 961). Categorising the analysed definitions unfold different dimensions such as strategy, process, concept, technique, and also tool (see appendix A2). Comparing the definitions of the paraphrases listed in the table below, one can reason that strategy, concept, process, and technique can be seen more or less comparable as all of them define a bigger concern which includes several subordinate objects helping to fulfil or reach a specific, higher, target. Only "tool" differs as it is specified as an instrument and, hence, is hierarchically arranged under strategy, concept, or process. Table 1 "definitions of paraphrases"

strategy

"a plan, method, or series of maneuvers or stratagems for obtaining a specific goal or result" (Dictionary 2012b)

process

"a systematic series of actions directed to some end" (Dictionary 2012c)

concept

"an idea of something formed by mentally combining all its characteristics or particulars; a construct" (Dictionary 2012d)

technique

"the body of specialized procedures and methods used in any specific field, especially in an area of applied science" (Dictionary 2012e)

tool

"any instrument of manual operation" (Dictionary 2012f)

Thus, Viral Marketing tends to describe a broader framework rather than only Copyright © 2013. Diplomica Verlag. All rights reserved.

a single tool (one mention), as the large majority of authors paraphrase it with either strategy (four mentions), process (two mentions), concept (six mentions), or technique (one mention).

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2.4.2 Characteristics Besides the scope of Viral Marketing, further major characteristics were extracted from the 25 analysed definitions which are listed in the tabulation in the appendix A2. Almost all of them contained either the subject communication or message, mostly specified through paraphrases, target groups, or mediums of communication. Furthermore, some definitions included specific targets of VM. The findings are summarised in the following subchapters: 2.4.2.1 Communication According to most of the corresponding authors, communication, or sometimes also described as "dissemination of information", should be connected to a brand, a product, or a service of a company. Intuitively this makes sense since without any connection to a brand, product, or service no correlation between objective of the communication and the company can be made and no effects will occur. While "honesty of communication" was mentioned infrequently, "cost effectiveness" seemed only important for one author. Nevertheless, honesty is an important tenet of Viral Marketing as already the suspicion of dishonesty would disrupt communication between peers and, hence, impede further dissemination. Cost effectiveness, however, means that the set targets would be accomplished without considering the amount of costs (Dictionary 2012g). What outranks cost effectiveness is cost efficiency as it is defined as the best possible cost-performance ratio with regard to the set target (Dictionary 2012h). Herein also lays Viral Marketing's competitive advantage compared to classic marketing. The development costs of a VM campaign are usually comparable to ordinary mass media marketing

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campaigns, but the distribution costs of the message, service, or product are minimal and the potential reach can also be much higher which leads to smaller costs per attained consumer (Allard 2006, p. 202f.; Dobele et al. 2005, p. 144). Some authors defined Viral Marketing not with the general term communication but circumscribed it with dissemination of a message. Therefore, the 25

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"transmission of a marketing message" can be seen equivalently to "communication about a brand, product or service", as a marketing message reasonably is connected to a company's brand, product, or service. Four authors added this information supplementary with a paraphrase while, in total, ten mentioned it as important as it is obviously essential to raise brand awareness, create brand advocates, or push sales. With twelve mentions, the exponential spread of a message also appears crucial to the majority of authors. As already stated, this is reasonable as the exponential spread contributes to Viral Marketing's cost efficiency. In this context, again three authors described the message as cost effective, whereby likewise cost efficient would be better matching. The description of cheap and effortless aims at the same target and therefore can be seen interchangeably to cost efficient. Two authors, on one hand, highlight uncontrollability of the marketing message as a problem. While, on the other hand, it is the very nature of Viral Marketing to spread with an incredible pace, therefore a campaign must be planned accurately before setting it off to avoid any negative outcome. Examples of negative WOM seem to support the concern of its uncontrollability, but as Viral Marketing aims at initialising positive word-of-mouth effects good and attentive planning can minimize those risks. This includes the planning of, for example, online capacities, availability, adequate information (Fischer 2009, p. 40ff.). In addition, improved technical options enhanced the controllability of, at least, some areas of VM. Earlier, viral videos for example were sent and diffused via email. To make the content easily accessible and forwardable, the video had to be sent as a file and, thus, was out of control once it was released. Today a video can be uploaded onto a video-sharing

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platform and sharing can be controlled. While only the link of the video can be forwarded or implemented, the advertising company can remove the video from the platform at any time if anything goes wrong. But these new forms of controllability are not applicable for the whole field of Viral Marketing. Messages in form of pictures for example, are hardly controllable. United Colors of Benetton had to sense this during their "Unhate"26

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Campaign5. Although this campaign was designed to create controversial discussions, the Vatican denounced the picture of the Pope kissing an Egyptian Imam as an unacceptable provocation. It was immediately withdrawn from the homepage but copies and screenshots already existed and spread quickly over the Internet (Boches 2011, Butt 2011). Persuasive and credible messages were mentioned by only three authors. Similar to the concern of honest communication, the credibility of a message or of communication in general is an essential tenet for Viral Marketing and its exponential spread. Regardless of whether peers are acquainted or not, the credibility of a VM message in comparison to an ordinary marketing message is usually perceived higher because the communicator's motive can be described as "pro-social", i.e. willing to educate and help, rather than "probusiness", which would be about acquiring new customers to make profits (Phelps et al. 2004, p. 346). In other words, the addressee usually interprets the message of private peers as more trustful and believes in their goodwill, while to companies he imputes monetary goals and less honesty. 2.4.2.2 Carrier of Information Both, communication and message were mostly tied to a specific groups or addressees through whom a VM message can be spread. Main mentions were either friends, colleagues and relatives, personal networks, respectively the social sphere of somebody, or peer-to-peer. All of them implicate at least a weak personal tie to the corresponding addressee. Only one definition contained explicitly unknown peers as target group. As an example, Lindgreen et al. (2008, p. 103) state consumer forums (e.g. Ciao.de or ConsumerReports.org) where consumers publish their own experience-

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reports of different products or services.

5

United Colors of Benetton started a campaign to "contribute to the creation of a new culture against hate" (UCoB 2012) by revealing photomontages of world leaders, such as Obama, Merkel, Sarkozy, Chavez, kissing each other. Besides the virally spread picture-messages they launched a website where interested consumers could read further information and actively participate by joining the foundation of the campaign or by creating own "kissingpictures" (UCoB 2012).

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Generally, forums can serve as a medium of diffusion, but the example of Lindgreen et al. is unfortunately chosen. Consumer reports are not deliberately triggered by a company and thus, they rather represent incidental eWOM than VM. Anyhow, what they all have in common, is, that the messages spread from person to person, and always on a personal, noncommercial basis. In terms of spreading a VM message over a forum or a blog, VM is also about a form of one-to-many communication (Kotler/Keller 2009, p. 482f.) and not only a peer-to-peer form as many authors stated in their definitions (e.g. Cruz/Fill 2008, p. 745f., Porter/Golan 2006, p. 33, De Bruyn/Lilien 2008, p.151.). Furthermore, all definitions of VM somehow argue (e.g. Leskovec et al. 2007, p. 2; Phelps et al. 2004, p334), that VM exploits the social networks of consumers. Hereby, online social networks as a complete or partial virtual image of an individuals' social network are perfectly suited for the diffusion of viral marketing messages as they give easy access to one's entire network while also benefiting from advantages of eWOM, e.g. independency of place and time and the possibility of asynchronous communication (See chapter 2.3.2). 2.4.2.3 Diffusion-Channels Forums and online social network sites lead us to the technical influence on the diffusion of VM messages. Although some (e.g. Oetting 2006, p. 233) include also offline communication to VM, the online benefits (Chapter 2.3.2) actually make Viral Marketing what it is and distinguish it from conventional word-of-mouth. Thus, besides online social networks any other tool that facilitates eWOM can be used as a medium of VM, such as email, forums and blogs. Accordingly, most of the authors referred in some way to the

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Internet respectively online-communication as medium of diffusion. Chapter 2.2 already illustrated that the Internet and especially the enhancements of the Web 2.0 offer optimal grassroots for exponential spread of information, especially through online social networks or platforms of any kind. Further statements found in the analysis were email, SMS, third party sites and videos. 28

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In general, the technical medium of diffusion is crucial for VM as it facilitates the exponential, viral spread of a message. Thus, the constant developments in Internet technologies also change and develop the alternatives of diffusion of VM. For instance, all analysed definitions which refer only to email as a medium of diffusion but not to the Internet in general are from the year 2006 or older. Before 2006, some social networking pages existed but were not too important6 whilst emails were the main channel of online-communication. Today social media platforms enormously gained influence as, for example, 96% of the younger German Internet-users have a social media network account and two of the top five most visited websites in Germany are social media pages - Facebook and youtube (PwC 2012). Accordingly, six authors included online networks, online social media sites, communities, platforms, or alike in their definition. 2.4.2.4 Message and Content Only few authors (e.g. Simmons 2006; Porter/Golan 2006) refer explicitly to the message and its content itself, although it appears to be the most important characteristic. Its design must be greatly appealing to the designated target group. It has to persuade the people to pay attention to the received messages and also encourage them to forward it. The message itself can be either some kind of advertisement in the form of a video, picture, advergame, or anything alike, or a recommendation about a product or service to share the benefits of the product or service with your acquaintances. 2.4.3 Conclusion

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For this study a definition of Viral Marketing will draw on the previous four described main characteristics namely, communication, carriers of information, diffusion-channels, and content.

6

Facebook for example was founded in January 2004 but was primarily an internal network of the Harvard University in the United States of America. They opened up their network subsequently to more schools until September 2006 when they opened up to everyone in public (Crunchbase 2012).

29

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Viral Marketing is a holistic commercial approach, initiated by a company, to trigger positive personal communication amongst consumers about brands, products or services by either passing on messages or recommending a product or service itself. This requires an honest message which is in any way strongly appealing to the target group, e.g. through funny, shocking or new and innovative content. The diffusion of the product or message is enhanced by electronic communication technology, i.e. the Internet, to enable a cost-efficient, exponentially vast diffusion.

2.5 Setting Up a Viral Marketing Campaign After defining Viral Marketing, this chapter will convey the theory into a feasible campaign setup. Therefore, goals have to be set before designing a campaign by means of its principles or elements. Finally, the evaluation of a campaign must not be missing. 2.5.1 Targets of Viral Marketing Every commercial company's main long-term target is profit maximisation (Gabler Wirtschaftslexikon, 2012). All other targets are either subdivided to it or can be derived from it. Thus, the question arises whether Viral Marketing can generate sales directly or for what it will be good for? Few Authors formulated actual targets of Viral Marketing. Besides Jurvetson (2000), Helm also states the maximisation of reach or eyeballs respectively, "the number of customers with which a business can connect" (Helm 2000, p. 160), as a metric. Porter and Golan (2006) as well as Golan and Zaidner (2008) analysed Viral Advertising campaigns and ascribed three main functions to it: branding, call for action, and providing information. Hereby,

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branding was in both studies found to be the main objective in 70% (n=360) respectively 84% (n=266) of n analysed campaigns (Golan/Zaidner 2008, p. 967). Viral products or services, however, are targeted to distribute themselves. Since they are mostly not sold but given away for free, creating sales is not the appropriate description of its target because no revenue is generated, at 30

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

least not directly. Depending on the business model, the objective can be twofold: If integrated advertising banners should generate revenue, gaining greatest possible diffusion is the target to maximise profits. The second option is to sell additional apps, services, upgrades or alike after persuading the customer of the amenities of the free version of the product or service. In both cases, the viral product or service is a means to an end to maximise diffusion, respectively reach, and to indirectly generate sales. Concluding, Viral Marketing campaigns can focus on achieving brand awareness, maximising reach, but also on financial goals. These goals will be further discussed in the chapter of evaluating Viral Marketing campaigns. 2.5.2 Elements of a Viral Marketing Campaigns Much cited Wilson (2000) defined six simple principles which should be considered to create a successful Viral Marketing campaign. Although incalculable external or environmental factors rule out guaranteed success, the probability of success and effectiveness rises by embracing the following principles or elements (Wilson 2000): 1. Gives away products or services: So called "freemiums" attract eyeballs and can bring valuable e-mail addresses, advertising revenue, and other e-commerce sales opportunities. 2. Provides for effortless transfer to others: Must be easy to transfer, replicate and without degradation, following Dawkins theory about Memes (Chapter 2.3.4). 3. Scales easily form small to very large: Viral models must be scalable, basically in terms of the underlying technology. 4. Exploits common motivations and behaviours: Use the humans

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urge to communicate, e.g. give one the chance to be cool by forwarding your fancy marketing message. 5. Utilizes existing communication networks: Place the message into communications between people. 6. Takes advantage of others' resources: This is basically about using technology of third parties, e.g. linking websites. 31

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Welker (2002, p. 6f.) and the Institute of Information Management (IIW), for example, adopted five of the six principles (excluding principle three) and many more authors also referred to his principles (e.g. Porter/Golan 2006, p. 27; Kirby 2006, p. 95ff.; Pousttchi/Wiedemann 2007, p. 4f.). But as his article is from the year 2000 and the Internet has developed since, today some of the elements could be merged to create an updated approach: Principles two, three, five and six can be embraced under the term social networking. Since all of those elements focus on technological requirements, social networks are catered to serve for Viral Marketing as they deliver all of them. They are highly cross-linked with all kinds of other websites (6) and offer integrated functions on third party sites to share it on the network (2), they offer all the technology, servers, etc (3), and they reproduce mostly a big fraction of a person's social networks on the web (5). Principles one, two and four could be comprised under minimal transaction costs. The perceived ease of use (2) and perceived usefulness (1) (Pousttchi/Wiedemann 2007, p.4) must be high by demanding minimal effort to watch the message, providing high "gains" for paying attention to it, and making it effortless or even lucrative forwarding it. Those factors hereby are usually non-monetary. Reckoning Wilson's point four from transactional cost perspective, it is about triggering intrinsic motivation to give consumers the feeling of earning something by forwarding the message, e.g. earning reputation or being "cool". De Bruyn and Lilien (2008, p. 151) furthermore add incentives as a form of extrinsic motivation to accelerate the spread. However, this point is controversial. Hinz' et al. (2012, p.69) empirical study supports the use of incentives while Pousttchi and Wiedemann (2007, p. 4) warn of too overt attempts of paying communicators since Viral Marketing Copyright © 2013. Diplomica Verlag. All rights reserved.

hinges on the perception of being a personal and trustful form of communication whose balance can easily be upset. To create an effective campaign and rise chances to spread virally, a recall of Rogers' (Chapter 2.3.5) and Gladwell's (Chapter 2.3.6) theory of diffusion helps. People with a high degree of opinion leadership respectively connectors, mavens, and salesmen have higher than average influence within a net32

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

work. Therefore detecting them and designing the Viral Marketing message appealing especially to them, the seeding of a message can be arranged more effectively. To facilitate viral spreading, the reproduction rate or epidemic threshold "R" must be simply bigger than one. This means that on average each person receiving the message forwards it to R other people, which then do the same thing, and so on. While a reproduction rate of exactly one would mean a linear growth, R > 1 leads to exponential growth, as the figure below shows (Watts et al. 2007, p. 3f.) Figure 6 "Viral growth"

Source: Watts et al. 2007, p. 4

The R is hereby determined by two critical factors: first, the likeliness or probability to forward; and second, the amount of friends to whom it is forwarded. For example, if the likeliness to forward is only 10%, i.e. only one of ten persons will probably forward the message, they must send it, on average, to more than ten other people to ensure an exponential spread with R>1 (Watts et al. 2007, p. 3). 2.5.3 Evaluation of a Viral Marketing Campaign

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As chapter 2.5.1 has shown the objectives of VM can be various and likewise its measurability will differ with each particular campaign design. Also the way, how to measure, will differ depending on the objectives a campaign can strive for. Hereby measuring means comparing two different states, usually the initial state before a campaign starts and the achieved state afterwards. If the outcome is higher than the input, the campaign was effective. About the 33

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

efficiency, i.e. whether the campaign was operated in the most effective way, a clear statement in numbers is often not possible since complex, dynamic, and unpredictable parameters have mayor influence on the progress of a campaign, e.g. the diffusion and the cultural differences within social networks, especially regarding trust or intimacy (DeBruyn/Lilien 2008, p. 161). However, an analysis can unfold weak points in the campaign design and its realisation and contribute to learn from it for future events. To analyse the result, measurable variables have to be derived from the according objectives before the VM campaign starts. Welker (2002, p. 6) suggests to measure the spread of a message in three dimensions: "velocity (speed of transmission), persistence (how long it cruises around) and transmission convenience (simplicity: no mental barriers, low costs, few handling)." Godes and Mayzlin (2004, p. 546) had similar thoughts and "evaluated the informativeness of two measures - volume and dispersion." They came to the conclusion, that dispersion and especially the extent to which a message is spread across heterogeneous communities, in contrast to simply within them, is much more important than simple counts. Jurvetson (2000) uses ratios based on the influence on the target audience. From his formula to calculate the spread of a viral message7, the following three measures derive: fanout (reach, number of people reached), conversion rate (percentage of reach turned into users) and retention rate (percentage of people that can be retained as users). Helm (2000, p. 160) agrees with him. While she sees the main target of VM in maximising reach, the corresponding indicator would be the number of people, who have received the message - or in Juvertson's words: the fanout. However, Porter and Golan (2006, p. 32) propose, in terms of viral advertising, to measure the Copyright © 2013. Diplomica Verlag. All rights reserved.

impact of VA on the consumers by means of "attitudinal, cognitive, and behavioral brand metrics".

7

the simple, first order model of Jurvetson's (2000) formula is:

Cumulative users = [(1+fanout x conversion rate) x retention rate] ^ frequency x time

34

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Having identified the most important indicators to evaluate a campaign, the next step is to operationalise them. Therefore, different approaches exist but only one selected approach will be introduced in accordance to the scope of this study. Cruz’ and Fill’s approach Cruz and Fill (2008, p. 747) argue that there is little agreement among marketers and researchers about the criteria which should be pulled up to evaluate a Viral Marketing campaign. Therefore they set up the first Viral Marketing Communication (VMC) evaluation framework. Figure 7 below illustrates the process of creating a VMC campaign: Figure 7 "VMC evaluation framework"

Source: Cruz/Fill (2008, p. 754)

After setting up the objectives of the campaign, including the evaluation criteria for each goal with time and measurement benchmarks, the campaign can be designed. Hereby value should be placed especially on the selection Copyright © 2013. Diplomica Verlag. All rights reserved.

of the "target audience, message, media and tools used for its deployment" (Cruz/Fill 2008, p. 754). Cruz and Fill call the finished design of a campaign a „creative‟. Once it is created, it can be released and continuously evaluated against the set up targets. Depending on the results, decisions can be made whether to "reignite" it to extend the campaign, to "contain" it with offline and

35

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online PR or whether to try to "abandon" it if unexpected incidents or consequences arise (Cruz and Fill, 2008, p.754). As already mentioned, Cruz and Fill distinguish between different campaign objectives. Their research led them to formulate three main tar-gets, which are namely cognitive, behavioural and financial goals. Depending on them, the target audience, the type of message, the media to spread the message and also the tools must be chosen carefully. Hence, to evaluate the campaign, different criteria is important and must be specified for each campaign individually. The table below shows an arrangement of criteria which Cruz and Fill found to be appropriate: Table 2 "VMC evaluative criteria"

Objective

Evaluation criteria

Cognitive goals

Reach, awareness and knowledge

Behavioural goals

The number of hits or downloads and rate at which creatives [messages] are passed on or transferred

Financial goals

Principally ROI and developments in brand equity arising from the campaign

Source: Cruz/Fill (2008, p. 754)

Cognitive goals can be evaluated by metrics of reach, awareness and knowledge. A product-launch campaign might focus mainly on reach to create brand awareness while other campaigns are aimed at raising brand awareness or knowledge about a product and, thus, can be gauged best with those numbers. Tools for collecting the data are various and are also developing with the ongoing developments of online technology. These include, amongst other counters for websites, video-views, CGI counters for

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counting opened emails, etc. Behavioural goals are about any kind of actual response to a campaign, if this is actually desired by the marketing-making company. The appropriate metrics again depend on the objectives of a campaign, e.g. the distribution of a digital product might be measured by the number of downloads, a viral advertising campaign in turn can be metered by the clicks or views of the 36

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message. In terms of Ferguson (2008, p. 182) the identification of the canvassed people should be aspired by collecting their e-mail addresses or alike. This uncovers the truly interested target audience, makes it possible to contact them directly and opens up the chance to build a relationship with them. Ferguson, among others (e.g. Helm 2000, p. 159), see a high potential in interactions with the customers to understand their choice-making and to further understand their exact needs to create suitable products. Therefore building relationships with them is important and can simultaneously serve as a metric.

Financial goals can be measured classically by the ROI or for example by the increase in brand equity. Here, however, difficulties can arise raising the needed data. Often the influence of a VMC campaign on the ROI cannot be measured exactly as other marketing activities are operated simultaneously.

2.5.4 Conclusion The objectives of VM can be segmented in three groups: cognitive, behavioural and financial goals. Depending on the company and the product, different goals can make sense and must be checked for each campaign. The goals should be measurable and must be set before creating a campaign. The evaluation can then compare pre-campaign numbers with the outcome to draw conclusions and learn for the future. The probability of success rises by following as many as possible of the six principles of Viral Marketing. In short, this means thinking in terms of transaction costs to deliver the message, product, or service to the customer with the lowest effort possible, and by taking advantage of the options social networking sites offer.

2.6 Classification of Viral Marketing In chapter 2.1 marketing was identified as a holistic management view and Copyright © 2013. Diplomica Verlag. All rights reserved.

the question arose which place Viral Marketing would capture within it. While the traditional view of marketing was functionally orientated and affected by the 4 P's, organisational, and financial implications, a systematic and more customer-oriented view evolved, refined the 4 P's to become the 4 C's and made marketing, in simple terms, more customer-focused and customerintegrating (Calder/Malthouse 2003, p. 7ff.; Kotler/Armstrong 2010, p. 76f.). 37

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Since the 4 C's8 are customer oriented and do not sense them as numb targets but interacting partners, Viral Marketing perfectly fits into this concept. In advance, it can be said that Viral Marketing can also concern nonbusiness marketing, as Obama's election campaign in 2007 and the current KONY 2012 campaign show. But for the purpose of this study, only commercial Viral Marketing is considered. In this chapter Viral Marketing will be classified within the marketing mix and furthermore delineated from contiguous fields. 2.6.1 Viral Marketing within the Marketing-Mix The analysis in the previous chapters has shown that Viral Marketing can be used manifold, e.g. to communicate and create or raise brand awareness, but also to distribute digital products and drive sales. Thus, it cannot be allocated in just one single field of the marketing mix, respectively the 4 C's, but several. Each of them will be briefly discussed: 1. Considering that VM can serve to distribute viral products, it is also about delivering the product or service to the customer at highest possible convenience. 2. To make a product VM-compatible, the product design and attributes must be developed accordingly and, hence, the customer solution also is part of a Viral Marketing campaign. 3. Considering the business model of many online services or products, one can sense that the customer cost is also affected by VM. This occurs in terms of free basis products or services9, whereby the suppliers make profit with either extra services or advertising. In terms of the transaction cost theory (Williamson 1981, p. 574), this increases

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the transaction efficiency by lowering the financial costs to zero,

8

The 4 P's as the sellers view were developed into a more customer-oriented view, the 4 C's: Customer Solution instead of Product, Customer cost instead of Price, Convenience instead of Place, and Communication instead of Promotion (Kotler/Armstrong 20120, p. 77)

9

Examples are numerous, e.g. online social networking pages in general (Facebook, Xing, etc.), Chat-programs (Skype, ICQ, etc.)

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although mostly non-financial costs in the form of private data divulgement arise. Remembering the principle of providing effortless transfer (see chapter 2.5.2), this appears crucial to enable viral spread and to not impede the diffusion through costs. 4. Communication, however, is undoubtedly a main field of Viral Marketing since the focus of Viral Marketing, the spread of a message over a certain network, is all about communication. As it constitutes the important link between supplier and consumers, this point will be analysed more detail in the following chapter. 2.6.2 Viral Marketing within the Communication Mix The marketing communications can be segmented into four main components (Burnett 2009, p. 190), namely advertising, personal selling, public relations, and sales promotion. Although other authors, e.g. Kotler/Keller 2009, p.472, subdivide them in more detail by adding events and experiences, direct marketing, interactive marketing, and WOM-marketing, the previously named four major groups will serve to show the scope of VM within marketing communications. After introducing the theoretical background of VM campaigns in chapter 2.5, its multi-applicability within the marketing communications will be shown on the basis of two practical examples by drawing on the Sherwin Marketing Matrix:

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Figure 8 "Sherwin Marketing Matrix"

Source: Daehn (2004), p. 138

The horizontal axis shows a products lifespan from its market-introduction or front end to its decline, the back end. The vertical axis illustrates the relationship between the customer and brand or company. At the uppermost point above the line customer and supplier have never heard of each other, 39

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on the point of intersection, between the vertical and horizontal axis, a relationship is built and gets stronger down the line, respectively below the line. This vertical axis can also be illustrated by the "Customer Loyalty Ladder" (Payne 1994, p. 30). It segments the strength of a relationship between customers and a company into six steps: from the unknowing prospect, over customer, client, supporter, advocate, and finally up to partner, who has a very strong relationship to the company and actively supports and vouches for the company (a more detailed illustration can be found in annex A3). To allocate VM within the Sherwin matrix the following points must be considered: x

Does VM build new relationships or does it require already set up relationships? Is it operating above the Line or below the Line?

x

For which span of a products' lifecycle is it feasible? Can it be used to introduce new products to the market or to promote existing and already available products?

x

Can VM push sales or is it rather a strategy to raise brand awareness?

The first two points are illustrated by the axis' of the Matrix, the last one generally questions whether marketing can directly generate sales or first has to achieve brand awareness to generate sales in a following step. As already mentioned in chapter 2.2, in 1996 Hotmail introduced their new email-client and within only 1.5 years they attracted more than 12m new customers through their Viral Marketing concept. Since the email-service was offered for free, revenues were generated indirectly through banner-ads (Helm 2000, p. 160).

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Jurvetson and Draper (1997) found out that VM "powerfully compounds the benefits of a first mover advantage" while analysing Internet start-up companies. At the end of their paper they came to the conclusion, that the Internet provides nimble start-ups an even "unfair competitive advantage". Still years later Hotmail, and also other providers of email-accounts, were attracting new customers (Langner 2009, p. 101ff.). Thus, Viral Marketing 40

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serves for Q1 and Q2, to attract new customers for a new product, and also for an already introduced product. The rather rare example of a non-digital product, the Blair Witch Project, shows how effective a Viral Marketing campaign can be, but also how much effort is needed to plan a campaign minutely. With a minimal budget of 30.000 USD two young filmmakers produced a worldwide successful pseudo-documentary. They designed an over two years lasting campaign around the movie. Two years before the premiere they drop wise started to inform the public with faked police reports, pictures and interviews to create a myth around the "documentary". This made many people to believe the story is true. Furthermore, a website was launched, offering detailed information and also short clips about the myth. Many people became interested in the myth and news about the story spread quickly. The media and even the popular music television channel, MTV, broadcasted reports about it. When the movie was announced to be screened in cinema, discussions about the truth began. Still, the movie made about 400m USD at the box office worldwide (Langner 2009, p. 105ff.). This example shows how primary a "fan base" of interested people was created and relationships were built by offering them drop wise new information; to then turn them into buyers or in this case moviegoers. Thus, in terms of the Sherwin Marketing Matrix, this campaign first acquired new customers (Q1) and then committed them to the "brand" before turning them into true, paying customers (Q3). This furthermore shows that viral marketing can not only generate brand awareness, but also push sales. But it must also be said, that building up a campaign on untruth is a risky game and can

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always backfire. The influence of Viral Marketing on people in the last quadrant, Q4, is hardly verifiable. However, VM can raise and tighten brand awareness, as many viral videos of already famous brands, such as Heineken or Coca Cola show over and over again. But if a viral marketing campaign also generates sales

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among people who already know an "old" brand or product, it is difficult to verify - not just in the context of Viral Marketing but in general. However, this chapter has shown the multilateral use of VM within the different fields of marketing communications. Cruz and Fill (2008, p. 753) came to similar findings in their study: They were able to provide evidence that VM can act above the line to generate awareness, and not only below the line as information and support providing media which has been the conventional

opinion

in

the

past

(e.g.

Christiansen/Tax,

2000;

Zeithaml/Bitner, 2000). 2.6.3 Classification to Related Fields The previous chapters have shown that VM can be allocated within all four fields of the marketing mix. As already mentioned in the chapters before, many different terms are used for related or similar fields in marketing. Though, in this chapter the most frequently used terms are shortly introduced and distinguished from Viral Marketing: Kirby and Marsden (2006) introduced the term of connected marketing, among which they unite the three terms of Viral Marketing, Buzz Marketing and WOM Marketing. Those terms all use the principle of positive word-ofmouth to promote of a company, product, or service, but differ in terms of the way how they act. WOM marketing varies from VM forasmuch that it is not about the viral spread of a designed message, but about "initiatives conceived and designed to get people talking positively" (Marsden 2006, p. xviii, Kotler/Keller 2009, p. 546f.). Buzz marketing pretty much equals WOM marketing, but it targets not only people to communicate among each other, but also the media to report about it (Marsden 2006, p. xviii, Kotler/Keller

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2009, p. 546f.). The Word of Mouth Marketing Association (WOMMA) developed a slightly different approach. They define WOM marketing as the main approach and sub-divide it into many different fields, namely Buzz Marketing, Viral Marketing, Community Marketing, Grassroots Marketing, Evangelist Marketing, Product Seeding, Influencer Marketing, Cause Marketing, Conversation 42

Viral Marketing within Social Networking Sites: The creation of an effective Viral Marketing Campaign : The creation of an effective Viral Marketing Campaign, Diplomica Verlag, 2013.

Creation, Brand Blogging, and Referral Programs (a short definition for each term is listed in appendix A4). Since all fields depend upon the principle of WOM, VM differentiates itself mainly due its exponential spread from all other fields, which then summarised resemble the field of WOM-marketing in Kirby and Marsden's approach. An explanation for the confusion of the terms might be that most of the marketing types can be combined. For instance, evangelist marketing, which is about advocates who actively spread the word on behalf of the supplier, as well as influencer marketing, which is about opinion leaders with the power to influence their peers opinion, are usually part of Viral Marketing campaigns. Furthermore Social Media marketing should be classified from Viral Marketing since the harnessing of social networking sites also applies for VM. Weinberg (2011, p. 4f.) defines Social Media marketing as a process to advertise products or services within social networks while addressing the collective but not single customers. Harnessing existing communities efficiently to build, tighten, and manage relationships between the company or brand and the consumers is a main objective. A particular challenge hereby lies in managing the online discussions since often fast and sensitive decisions must be made, e.g. if negative news occur and get discussed. Though, the focus of Social Media marketing lies rather on the usage and management of own profiles within a network while VM exploits the network to achieve maximal spread within minimal time. 2.6.4 Conclusion VM is about a company initiated promotion of a product, service, or the company itself. It differs from related approaches mainly through its

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exponential spread. If a Viral Marketing campaign is about a digital product or service, it can serve for distribution purposes and, thus, will be a matter of all 4 C's of the marketing mix. If the campaign is not about the diffusion of a product or service but about raising brand awareness and giving information, it can be reduced to one single field - communication. In this case many authors refer to a specific subcategory of VM: Viral Advertising (e.g. Gaiser et 43

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al. 2005, p. 516; Golan/Zaidner 2008, p.961f.; Oetting 2009, p. 71f.; Porter/

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Golan 2006, p. 28f.).

44

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3 Viral Marketing in Social Networks During the review of literature many analyses have been found. Phelps et al. (2004) and Schulz et al. (2011) have analysed the motivations for passing on marketing messages via email and its effects on the receiver. Others, such as Cruz and Fill (2008) as well as Ferguson (2008) have examined the efficiency and the measurability of VM Campaigns. But almost all studies did not consider explicitly the diffusion of viral marketing messages (VMM) via social networks. Especially to younger people, today online social networks are an inherent part of their daily life. The Old Spice Viral Marketing campaign from February 2010 achieved more than 110m views within approximately 6 months (Parpis 2010, p.2). Compared to the K-fee campaign from 2004 with approximately 7m views within seven months (Langner 2009, p. 173), the Old Spice campaign is quite impressive. Although those two campaigns are not totally comparable, as the Old Spice videos were released in the USA and the K-fee ones in Germany, the question arises, whether new forms of online social networks have an influence on Viral Marketing with respect to the way, amount, efficiency and other aspects of diffusion. Therefore, a survey about the motivations of passing on viral marketing messages over social networks was conducted.

3.1 Method To conduct a survey and gain insights of the users behaviour and motivations of receiving and forwarding viral marketing messages10 over social networks, Phelps' et al. (2004, p. 335) basic model of a "typical pass-along email episode" was adapted to social networks.11 Based on the model, three

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research questions were set up and an online questionnaire was designed.

10

In this survey VMM refers to any kind of virally spread message, e.g. videos, pictures, textmessages, and also recommendations about products or invitations to use specific products, services or games. 11

For reasons of this studies extent, the survey was limited to one single online social network. Therefore Facebook was chosen because it is easy to access, open to everybody worldwide who has access to the Internet, free, unspecialised, and simply the biggest online

45

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3.1.1 Research Model and Research Questions The adaption of the model consists also of four stages, similar to the Phelps’ et al. (2004, p. 335) original model: First, the receipt of a message, second a decision point whether to pay attention to a message, third the "consumption" of the message, which refers to reading a text-message, watching videos, following an invitation, etc., and finally another decision point, whether to forward the message. The two decision points hereby emphasise the critical points whether the message will spread virally. Figure 9 "Typical VMM Episode"

Source: partly adapted from Phelps et al. (2007, p. 335)

Other than the primary model, the way of diffusion differs in social networks compared to emails. While emails are always directly and knowingly sent to specific receivers, social networks provide different opportunities. Identically to emails, private messages (PM) can be sent and directly addressed to people. But furthermore it offers the opportunity to post messages on one's own or a friend's profile. Although a posting on a friends profile is a directly addressed message to him, it still differs from private messages and emails

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in the point, that also others can see it and share it, depending on the particular privacy settings of the users.12 Thus, the message is furthermore

social network in the world with approximately 100b friendships among 845m monthly active users (MAU) worldwide (Facebook 2012, p. 1). 12

Facebook offers many different and specific options to whom your profile and your published messages should be visible. Thus, it is possible to share everything with public

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indirectly addressed to all the friends of the receiver. A post of a message on one's own profile, however, has no direct addressee but can indirectly be received by all the friends of the sender. Though, depending on the amount of friends and their activeness on checking their friends' activities, indirectly sent messages might have a larger reach than directly sent ones, because of the following assumptions: First, direct messages are usually only sent to people of whom the sender thinks they would be interested in it. Other friends which might be interested as well but have not been considered by the sender would not be reached. Indirect sent messages would make this possible. Second, if the message was posted on the wall of a friend it might reach friends of the friend which are not acquainted with each other. Third, weaker ties are usually never considered by addressed forwarded messages as they are not known well and, hence, their preferences are hard to estimate (Granovetter 1973, p. 1361). If the portfolio of friends of a user consists also of weakly known acquaintances the reach of a message can be furthermore enhanced. Accordingly, the way of diffusion of viral marketing messages seems to have changed with the use of social networks. Therefore the first research question says: RQ #1: Do online social networking sites have any effects on Viral Marketing? Furthermore the question arose, which types of VMM are being preferred as online social networks have minimised the efforts to share visual and auditory content to a minimum and therefore allow the most attractive and appealing transmission of advertising messages on the Internet, considering that the other three senses (gustatory sense, tactile sense, and olfactory sense) are

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hardly presentable on the web with today's technological options. RQ #2: Which types of VMM are preferentially consumed by the receiver?

right up to nobody except oneself. As it is the very nature of a social platform to communicate with friends, it will furthermore be assumed, that the privacy settings generally allow all friends of a user to see his profile and posts.

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In addition, it will be interesting not just which type of message is received but also from whom and whether senders and receivers of VMM's can be generally characterised by any specific attributes. .

RQ #3: Can the sender, receiver, and the VMM itself be generally characterised by specific attributes? A special feature of Facebook, being the chosen online social network for this survey, is the role of social games, often also called mini games or Facebook-games13. Facebook brought this market into place which is now home for some renowned games developer studios, e.g. Electronic Arts, but also for start-ups of which a some have grown rapidly to many-million dollar businesses, e.g. the US company Zynga Inc. or the German Wooga GmbH (Williams 2011, p. 6 & 26). Those games have implemented invitation modes to send recommendations to friends of the player. Furthermore, the player has options to publish any kind of achievements within the game to keep their friends updated about their highscore and also to call attention of yet non-playing friends. Reflecting the definition of Helm (2000, p. 159), whereby Viral Marketing is about the distribution of digital products, those social games are viral products par excellence. But caution has to be exercised to not confuse them with advergames14, although they seem to be similar in their layout. While advergames are about promoting a certain brand or company, social games are independent and discretely generate profits. Market leader Zynga’s business model is based solely on the development and distribution of social games. But Zynga is also controversially discussed since they highly depend on

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Facebook and their rules and settings. When primarily all highscores were

13

Social games are usually fully-fledged games. The basic version of the game is free, but turnover is created either from personalized adverts within the game or by selling some kind of "online currency" which can be used within the game to buy decorative or functional virtual goods (Sookman 2009). 14

Advergames are interactive games designed to advertise a product or company. The basic idea is to develop a game into an advertisement-campaign to deliver product information and/or brand awareness to the player (Front Network 2012). Thus it can be seen as branded entertainment that serves to communicate and interact between supplier and consumer.

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automatically posted to the news feed, many people got annoyed as the whole news feed got overloaded with game-stories and was perceived as "game spam". Facebook changed the settings and completely banned those postings for about a year which made the viral distribution of the games very difficult. Later on they introduced them again accompanied by privacy settings which give control to whom game stories should be shared with and with whom not. In spite of those settings many games seem not to know these settings and thus let the games post all their results (Constine 2011a, Constine 2011b, Caoili 2012). Since social games are a relatively new phenomenon, not much research with respect to their viral diffusion has been carried out yet. Therefore, they will be also considered in this survey, besides the distribution of other viral products through online social networks. 3.1.2 Research Design and Dataset This study used an online survey. It was structured in five sections, the four sections of the base model and a demographic section at the end of the survey containing a total of 27 question blocks and 76 single questions. To make it available for as many respondents as possible, it was released in three languages: English, German and Spanish. The survey was pre-tested with probands (n=7) from Germany and Mexico to secure its comprehensibility and appropriateness of the questions. It led to some minor changes of the survey structure for an easier understanding of the questionnaire, to an extended description of Viral Marketing at the beginning of the questionnaire to ensure a general understanding of the following questions, as well as to some grammatical corrections within the

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Spanish version of the survey. Furthermore, the pre-test affirmed a completion-time of approximately 15 minutes to fill out the questionnaire. In the next step, the survey was published on Facebook on the 26.02.2012. A sample of the English version of the questionnaire, including the accumulated answers, can be found in the appendices A5 to A10.

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Within twelve days, 215 probands took part and 158 of them completed the questionnaire while 57 aborted. The age range accounted from 16 to 42 years with an average of 23.95 years and a distribution of 62.03% female and 37.97% male participants. The highest level of education was distributed as follows: Junior Highschool or below 1.27%, Highschool 36.71%, Undergraduate 48.10%, Postgraduate or Master 11.39%, PhD or higher 1.27%, and some other 1.27% did not declare their educational level. The distribution of their nationality amounted to: German 81.64%; Mexican 10.76%; Chinese and Dutch each 1.27%; and Azerbaijanian, Croatian, Finnish, French, Indonesian, Macedonian, Spanish and Syrian each 0.63% (see Appendix A10 Survey - Demographic Data).

3.2 Survey Results In this chapter the findings will be briefly illustrated and explained in order of the four stages of the previously introduced survey model (see figure 9). The numbers in square brackets refer to all single questions which are completely listed in the annex A5-A9. Subsequently, in chapter 3.3.5 a comprehensive discussion will highlight and question the most important findings. Furthermore some short explanations which were also given in the questionnaire: the term friends refers to close friends while acquaintances illustrates loose friendships. Specific circle of friends describes any grouping of friends, e.g. chess-club, friends from soccer, etc. To allow a better comparability, the percentaged numbers will always refer to the total amount of 158 probands participated, although some questions were not answered by all participators. The maximum number of answers then

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possible will be declared separately. 3.2.1 Stage 1: Receipt of a VMM The first three questions asked whether VMM are directly received, i.e. either by private message or directly posted on one's own wall. The proximate three questions polled the indirect receipt of a message, i.e. viewing VMM which were not addressed directly to oneself, e.g. on the profile of a friend or in the 50

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news feed, and also directly received VMM, which are sent via PM or posted on one's own wall. The results of direct and indirect received VMM in form of Videos (58.23% directly [#001]; 62.66% indirectly [#004]) and pictures or textmessages (65.82% directly [#002]; 68.99% indirectly [#005]) are pretty similar. Contrary to this, game-invitations or product-recommendations were received by 75.95% [#003] of the respondents directly, but indirectly by only 16.46% [#006]. This far cry can be interpreted in two ways: Either the direct receipt makes the indirect receipt redundant, or the prospects are not interested in game invitations or program-recommendations and therefore do not seek them actively on other than their own profile but still receive them (unwillingly) directly addressed to them. The next ten questions surveyed the source from whom the respondents directly and indirectly receive VMM. The direct receipt can be split into two main groups: From the family (27.22% [#007]), working colleagues (20.89% [#010]) and specific circles of friends (26.58% [#011]) on average only approximately a quarter of the probands directly receives VMM. On the contrary from close friends (74.05% [#008]) as well as from loose acquaintances (75.32% [#009]) about three quarters of the interviewed persons directly received VMM. In comparison, the numbers of indirectly receiving VMM by friends (77.22% [#013]), working colleagues (22.78% [#015]) or specific circles of friends (27.22% [#016]) did not differ much. The number of family members as the indirect source of VMM rose to 48.10% [#012] while the share of acquaintances on the contrary sunk to 53.16% [#014]. These two disparities can both be explained by the tie-strength. While family members usually have a stronger relationship amongst each other, they might also visit their online-profiles more often, than the one's of looser

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ties, respectively acquaintances. Thus, it is more likely to spot VMM on a family member's wall than on a rarely visited profile of a weaker friend. Question [#017] and [#018] polled whether senders of VMM can be generally characterised, which was affirmed by 43.04%, and if so, by which attributes: The most mentioned ones were sociable (29.11%), humorous (25.32%) and they have many friends (13.92%). Interesting, however, is the fact, that not a 51

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single respondent mentioned altruistic/selfless, although in the literature this is frequently contemplated to be an important motivation to spread positive WOM (e.g. Canarella/Piccioni 2008, p.126f.;Ho/Dempsey 2010, p. 1004; Phelps et al. 2004, p. 337). Furthermore, the often reckoned honesty of the VMM seems not to apply for the sender, as this was only declared as a general attribute of VMM-senders by 2.53% of the respondents. Further mentions were self confident (8.86%); helpful (7.59%); intelligent (6.33%); happy (5.70%); peaceful (3.16%); passionate (2.53%), foresightful, in need of attention and nasty (all 1.27%); generous, introverted, political interest, computer-affine, too much free time, little intelligent, credulous and opinion leader (all 0.63%). 3.2.2 Stage 2: Decision Point - Consumption The first ten questions of the second stage surveyed reasons to read or watch a VMM. 52.53% of the respondents fully agreed and 25.32% slightly agreed that limited free time [#019] constrains their consumption of VMM. Reversely, 21.52% totally disagreed and 29.11% slightly disagreed to get back to interesting appearing VMM [#020] after being too busy watching them directly. However, whether to watch VMM during working time was answered ambiguous [#022]: 13.92% disagreed, 22.78% slightly disagreed, 22.15% were undecided, 23.42% slightly agreed and 17.72% agreed to this question. Only 6.33% agreed or slightly agreed but 77.21% disagreed or disagreed slightly to watch all VMM which their friends post [#023]. 48.10% even disagreed or disagreed slightly to watch all VMM directly addressed to them [#021]. This fact leads one to suspect that directly addressed VMM in social networks seem not to receive the same valuation in comparison to

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WOM in real life. The allocation of answers whether more directly addressed VMM are being watched or read than indirectly ones [#026] also is undetermined: 22.15% disagreed, 21.52% slightly disagreed, 25.95% were undecided, 19.62% slightly agreed and 10.76% agreed. This might be caused either by limited free time (see [#019]) leading to a form of information overload, or due to deterring or non-appealing characteristics of 52

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the message. 25.31% disagreed or disagreed slightly to watch all VMM that appear interesting to them [#024] while 10.39% disagreed or slightly disagreed to not watch uninteresting VMM [#025]. This indicates that not only time and appeal have an influence, but also other factors. Trust in VMM, as a possible matter, was questioned in [#027]: 53.16% agreed or slightly agreed to have lower trust in VMM from acquaintances than in the ones sent from close friends whereby 18.35% disagreed or slightly disagreed. Further matters of influence were polled in the open question [#028]. Four respondents referred to the prevalent brand image; keywords or headline and the similarity to personal hobbies were mentioned each by 3 people; the own mood, frequency of occurrence, characteristics of sender and own disinterest on VMM were each named by 2 respondents; and recommendation in real life, fear of spam/virus, distraction from work/ studies, slow Internet connection and reference to recent experiences were all stated by one proband. The last question of stage two asked for characteristics which make a VMM appealing for the respondents [#029]: The most important ones were funny (75.95%), interesting (64.56%), innovative (46.20%), informative (35.44) and surprising (34.81%). Further answers were: credible (29.11%), attractive (28.48), honest (20.25%), shocking (16.46%), sympathetic (16.46%), successful (10.76%), erotic (5.70%), and important, amusing, strange and related to someone you know (all 0.63%). Since the most important, first mentioned characteristics could be expected to have high influence, it is more surprising that honesty and credibility do not have the same importance but rather seem to be subordinated. 3.2.3 Stage 3: Consumption of Message

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The first nine questions asked how often Videos, Picture and text-messages, or invitation or recommendation are consumed after being received either per private message, via the news feed, or on their own profile. The findings about game-invitations and product-recommendations of stage one hereby were confirmed further, as, on average, about 60% stated to never accept game-invitations or product-recommendations: neither directly 53

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send via private message (65.15%[#036]) or on the own profile (58.86% [#038]), nor indirectly spotted on the news feed (63.92% [#037]). In turn, very few stated to pay attention to at least one game-invitation or productrecommendation per week (6.33% per PM, 9.49% via NF, and 10.76% on own Profile). The consumption of VMM regarding videos however was less negated (per PM 41.77% [#030], via NF 16.46% [#031] on the own Profile 25.32% [#032]), but also not highly popular as less than 17% stated to receive and watch a viral video at least once per week (per PM 10.76% [#030], via NF 15.19% [#031] and on own Profile 16.46% [#032]). VMM in form of picture or text-messages in turn were again less negated than viral videos: (per PM 25.95% [#033], via NF 10.76% [#034] and on own Profile 20.25% [#035]) and also a bit more popular in terms of being consumed at least once per week (per PM 19.62% [#033], via NF [#034] and on own Profile [#035] both 24.68%). A comprehensive view over the three categories, namely video, picture/textmessage, and game-invitation or product-recommendation reveals further insights: More VMM are received and consumed via their own or a friends profile, which are visible for all friends of the receiver, compared to private messages. This might reflect motives to share VMM and start discussions with more people than just the primary addressed friend. Furthermore, only small shares (below 25%) receive and consume regularly VMM, i.e. at least once per week. In addition, since videos combine the sense of hearing and sight they seem to be better suited to transmit messages in an appealing way compared to picture or text-messages. However, the latter ones were stated to be consumed more often. The question then is whether they simply exist more often, or whether other factors play a role, e.g. time/duration of

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consumption. Furthermore, the results of each of the questions [#030] to [#039] were analysed whether they correlate with the socio-graphic factors age, years of education, and sex. Results between -0.22 and +0.09 at most revealed no coherence at all. The next block analysed the capacity for remembering. The question whether the probands could remember a VMM they received recently within the last 54

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two weeks [#039] was affirmed by just 28.48%. VMM received longer ago [#040] were likewise affirmed by only 27.85% of the respondents. Since they were not questioned about a specific branch or type of product or service but could have named any ideas, a result below 30% seems to be very little and does not testify a highly effective way of personal marketing. However, the probands were able to mention 43 brands and companies of which they have received VMM recently ([#041]; n=45) and 36 brands or companies of VMM they have received longer ago ([#042]; n=44). In both cases the brands could be pooled into seven major categories, namely Games (7 mentions in #041/8 mentions in #042), Food & Beverages (5/4), Cosmetics(5/2), Online Services (4/1), Automobile (4/7), Alcohol (4/9), Electronics (3/2) and Clothes (5/1). Other single mentions were grouped among Others (6/2). Further 6/12 probands were unable to recall the brand or company name of the remembered VMM. The next block surveyed the playing attitude of the probands regarding social games on Facebook. 56.96% of the probands stated they have tried [#043], 23.42% said they still try some once in a while but do not play regularly [#044], and only 7.59% declared regular gaming [#045]. The participators which answered at least one of the two latter questions with yes (n= 45) were furthermore asked about the average time they play per week. The shortest weekly gaming time was 2 minutes, the longest 300 minutes, and the average 23.5 minutes [#046]. Additionally, it was polled how they got started to play a game [#047]: 37.34% of the probands followed an automated invitation sent to them directly by one of their friends; 9.49% heard about the games through chats with friends in real life; 8.23% saw automated messages of highscores or alike in the NF and started gaming; and 1.26% through own Copyright © 2013. Diplomica Verlag. All rights reserved.

research. The last block questioned the receipt of recommendations to use programs or services which 69.62% of the probands affirmed [#048]. They were furthermore asked whether they could remember any of them [#049]. 8.23% of all probands could not but the remaining 61.39% (n=97) could. Although the question was targeted on programs or services, 63 probands named 55

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various social games, but also 68 programs and 44 websites and online services were mentioned. With 34 calls, the mostly mentioned program was Skype, which might be a biased result since it was stated in the introduction as an example to help understand the topic of viral marketing. However, other often mentioned examples were: ICQ (9x), MSN (4x), Teamspeak and Whatsapp (both 3x), while the most often recalled websites or online-services were: Facebook (13x), Dropbox (9x) and Google+ (5x). 3.2.4 Stage 4: Decision Point - Forwarding The first six questions surveyed the probands motives to forward a VMM: 46.84% agreed or slightly agreed to forward messages because they find them funny or interesting [#050] while 46.20% disagreed or slightly disagreed. Likewise 46.84% agreed or slightly agreed to forward messages because they think their friends find them funny or interesting [#051], while 41.14% disagreed or slightly disagreed. The denial of incentives [#052] as a motivation was clear as 74.05% disagreed and further 12.66% slightly disagreed while only 5.69% agreed or slightly agreed. The obtainment of a certain reputation or the identification with a brand [#053] was negated alike with 74.05% of the probands disagreeing and 10.13% slightly disagreeing while only 6.96% agreed or slightly agreed. Starting a discussion about a product or a brand [#054] was also negated by 75.32% disagreeing or slightly disagreeing while only 11.49% agreed or slightly agreed. Forwarding VMM to tell their friends what they like [#055] were agreed or slightly agreed by 19.62% of the respondents while 63.92% disagreed or slightly disagreed. Overlooking all answers one particular or out-standing motivation could not be found. Equally to the analysis about correlation in stage three, each single question [#050] to [#055] was analysed. Again, numbers between -0.11 and Copyright © 2013. Diplomica Verlag. All rights reserved.

+0.11 showed no correlation between the questions and the socio-graphic factors age, years of education, and sex. The next question-block polled the probands forwarding attitude how often Videos, Picture and text-messages, or invitations or recommendations are reposted on the own profile, forwarded to a friend's wall, or sent via PM. 56

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Equally to the consumption attitude, game-invitations and program-recommendations were the fewest forwarded VMM. 89.87% stated to never repost them on their own profile [#062], 84.81% to never forward them via PM [#063] and 87.34% completely negated to forward them on the profile of a friend [#064]. Furthermore, daily forwarding attitude did not exist in none of the three categories and forwarding at least once a week summed up to vanishing small numbers of 1.90% via PM [#063] and 1.27% in each case, the own [#062] and a friends profile [#064]. Videos, on the other hand, were less negated to be forwarded or reposted. 44.94% declined to repost viral videos on their own wall [#056], 56.96% negated to forward them via PM [#057] and 46.20% objected to forward them onto a friends wall [#058]. At least weekly forwarding rates summed up to 6.33% [#056], 3.16% [#057] and 1.90% [#058] respectively. Numbers of never forwarding VMM in the form of pictures or text-messages took after the video-numbers. 44.94% declined reposts on their own wall [#059], 53.16% to forward them via PM [#060] and 44.30% to forward them on a friend's wall [#061]. At least weekly forwarding rates were slightly higher and amounted to 6.33% [#059], 7.59% [#057] and 6.96% [#058] respectively. Furthermore, all probands not declining to forward VMM (n=113; 71.52% of total) were asked to whom they send them, which were family [#065] 39.87%; friends [#066] 70.25%; acquaintances [#067] 36.71%; working colleagues [#068] 17.09%; and specific circle of friends [#069] 21.52%. The final question of stage four asked to estimate how many of all VMM they usually forward compared to the amount they consume [#070]. Only one (0.63%) answered more than 80%; 2 (1.27%) of the probands stated 61% to 80%; 8 (5.06%) said 41% to 60%; 15 (9.49%) declared 21% to 40%; and 132 Copyright © 2013. Diplomica Verlag. All rights reserved.

(83.54%) told 20% or less. Remembering the little numbers of consumption (stage three) and the measurement of the forwarding attitude in this chapter, these numbers seem to match. Correlations between the forwarding attitude and socio-economic factors age, years of education, and sex were also not found since the numbers lie between -0.04 and +0.05 and show no significance. 57

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3.3 Reflecting the Research Questions After the presentation of the survey results in order of survey model, in this chapter the findings will combine with regard to the research questions. 3.3.1 Effects of Social Networking Sites on Viral Marketing The first research question asked for the influence of social networking sites on Viral Marketing. Hereby, influence on hard facts, such as effectiveness, velocity, or reach, need lots of resources to be investigated. On that account, indirect measures were preferred to draw general conclusions on this topic. A good three-quarters of the probands stated limited free time causing a downturn in consuming VMM. Half of all probands furthermore declined to get back to them later on, which in combination can be explained by an overflow of information. Though, effectiveness depends on the first impression, whether a VMM can convince to be worth the time consuming it. Although online social networks make forwarding messages easy for everybody, it appears that in spite of the technological simplification, the way of diffusion has not changed. While on average over 60% stated to receive VMM ([#001]-[#005]), 83% stated to forward less than 20% of the received messages ([#070]). Rates to forward a message at least weakly in question [#056]-[#064] similarly summed up to ten percent at the most. This admits the conclusion, that, similar to Gladwell's Law of the Few (Chapter 2.3.6), also on online social networking sites some specific and rather rare nodes exist, that have a high above average forwarding attitude and are mainly responsible for Viral Marketing's success. Additionally, social networking sites facilitate the indirect diffusion and

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sending of VMM, which was found to be more frequent than direct forwarding in stage three. Though, effectiveness of VM in social networking sites seemed to have gone up according to found indications unless one emanates that the diffusion of direct sent VMM has not declined in at least the same amount.

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Another important point regarding social games: social networks tremendously contributed to their rise. These games respectively their distribution system is built up on Viral Marketing methods. Since 75% of the probands received game-invitations ([#003]) and approximately 60% denied playing games ([#036] - [038]), the arising gap between users and forwarders can be explained differently, compared to the previously described Law of the Few: Recalling Constine (2011a) many game-invitations were perceived as annoying "game-spam". The high rates of receiving game-invitations compared to very small forwarding rates, though, can be interpreted as signs confirming that many gamers do not know that the game publishes stories automatically, although privacy settings exist which would allow them to turn these functions off (Constine 2011b). 3.3.2 Preferred Types of Viral Marketing The second research question addressed the question, whether there are some types of VMM preferred compared to others. The investigation on directly and indirectly received VMM revealed that picture and text-messages are the most often received ones. Program-recommendations and gameinvitations were more often received directly but only rarely indirectly. This let one hypothesise that there are not too many people actively looking out for them but rather receive them undesired. The research on the consumption behaviour approved this assumption since game-invitations and productrecommendations were the most often negated VMM to be forwarded. Picture and text-messages were, equally to the receiving-results, more often forwarded than videos. Though, picture and text-messages are the preferred types of VMM, although the sound and motion-pictures of a video could have been expected to be favoured since they allow a multiple-sense appealing Copyright © 2013. Diplomica Verlag. All rights reserved.

form of information transmission. A counter-argument could be the time necessary to consume a video in comparison to a picture or text-message since many people argued that time limits their amount of VMM consumed. The sometimes negative notion of social games might have influenced findings in the questions about the consumption of VMM [#036] - [#038] and 59

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forwarding VMM [#062] - [#064] due to the unfortunate pooling of viral products or services together with social games in one category. Nevertheless, the numerous recalls of viral products or services [#047][#048] exceed the low rates of actual gaming attitude [#043]-[#045] and have shown a higher popularity of the primary named ones. 3.3.3 Characterising Attributes The third research question asked for specific attributes to characterise the sender, receiver or the VMM itself. The VMM itself thereby was characterised mainly as funny, interesting, innovative, informative and surprising. Further specifications of VMM can be derived from the motivation of people to consume and forward them. Hereby their own ([#050]) and friends interest and amusement ([#051]) were the most mentioned ones. Starting discussions about a product or brand ([#054]), or telling their own preferences ([#055]) were only stated by few probands. Receiving incentives ([#052]) or obtaining a certain reputation ([#053]) on the other hand, was clearly negated by almost all respondents and, thus, cannot be recommended to be chosen as specification of a VMM in a Viral Marketing campaign. The characterisation of the sender ([#018]) was a bit indefinite but could still be identified as sociable, humorous, and having a lot of friends. Furthermore, the senders were defined by three-fourths of the probands as both, friends ([#007]) and acquaintances ([#008]), whereby working colleagues ([#010]) were named as expected by fewer people, respectively a fifth. Interestingly, family members ([#007]) were only mentioned by less than a third. Since the restraint of personal interests might be a reason why working colleagues are often excluded from forwarding messages, the reason for family members

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remains hidden. Specific circles of friends ([#011]) seemed to form rather rarely a specific target group. The specifications of receivers were similar, with the exception of one group. Only one-third declared to forward VMM to acquaintances ([#067]). Since three-quarters declared to receive VMM from them, the gap can be explained by the existence of a few people that send an over-average amount of VMM 60

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acquaintances. In terms of Gladwell's theory (Chapter 2.3.6) they could be identified as connectors with an over average amount of connections and furthermore as "masters of the weak ties". With regard to Rogers' theory (Chapter 2.3.5) they also account for the success of Viral Marketing campaigns as they bring heterophility into networks and, thus, are responsible for the diffusion of messages over the borders of micro-levels to form a bigger macro-level network. Mavens, on the other hand, could also not be identified since none of the probands stated altruism or social benevolence as general characteristics of senders ([#029]). Furthermore, occurring types of VMM were segmented by their originating industry. Hereby the most often named VMM's ([#041] - [#042]) were alcoholic beverages, automobile manufacturers, food and beverages producers, clothes manufacturers, online service providers and cosmetic manufacturers. Surely they do not reflect all branches which are using VM, but they can be seen as top-of-mind brands and products which seem to accomplish Viral Marketing successfully. Hence, brands such as VW, Heineken, and Skype

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conduce as good examples to study and learn from.

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4 Conclusion At the bottom line, the Internet and its constant technological progress was found to enable viral marketers to operate with almost unprecedented amplitude of possibilities to market a product. First movers have a clear advantage when coming up with new ideas to entertain the customer with innovative viral adverts or presenting them useful and beneficial products or services. To be successful and effective, the campaign has to be planned accurately although some incalculable external factors have influence as well. After creating an innovative and appealing message or product, figuring out connectors and mavens to ideally seed the campaign commodity and maximise chances of a viral spread, using the cross-linking and communication possibilities of social networking sites, and minimise the financial and nonfinancial costs for the potential customer to guarantee high usability and ease of use are main points to consider for being successful with Viral Marketing. The survey has shown that social networking sites accelerate and extend the diffusion of Viral Marketing messages by enabling the indirect consignment and reception of a Viral Marketing message and by providing cross linked functions to share content easily and independent of time or place. The way of diffusion itself was revealed to still be the same. Only a few people were found to be responsible for a major part of the diffusion, while the majority of people forwarded only few or no messages or recommendations. The most common medium of VMM was disclosed as pictures and text-messages, followed by videos, while game-invitations or product-recommendations were found to be less popular. Main influencing factors on the effectiveness were found to be limited free-time, the funniness and interestingness of the

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message, and their own and friends’ general interest. Furthermore, working colleagues were identified as an excluded group, while apart from that, VMM were received and sent to either close friends and also weaker ties or acquaintances which enable, according to the theory, the spread within the micro- and also the macro-level of social networks.

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4.1 Limitations The idea of pooling all products and services in one category has limited the study. This is since social games were found to annoy many probands which, in turn, led to inferior results for the whole segment of viral products or services. Furthermore, it must be acknowledged that the size and consistency of the survey sample illustrates basically the micro-level network of the author and might not illustrate an appropriate part of the entity. Though, the extent to which a generalisation of the results is applicable might be limited as well.

4.2 Outlook Although many studies focus only on viral advertising, the field of viral products seem quite interesting since it enables a company to quickly gain large market shares, that is, if a viral product can be designed and marketed properly. Recalling Hugo's quote from the beginning of this study, it has been shown that contagious "ideas" outmatch the overused mass media adverts since an appealing thought makes the wooed people think about it instead of being bothered by it. Therefore, investigations about the general course of action on how to design an appealing viral product would be helpful for practitioners. Furthermore analyses on the coherence of the theoretical and actual existence of connectors, mavens, and salesmen could help to identify applicable factors to address VMM directly to them and, thus, to raise the

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chances of reaching the tipping point to a viral spread.

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Brassington, Frances; Pettitt, Stephen (2006): Principles of Marketing, 4th ed., FT Prentice-Hall, Harlow. Bruyn, Arnaud de; Lilien, Gary L. (2008): A multi-stage model of word-of mouth influence through viral marketing, In: International Journal of Research in Marketing, Vol. 25, pp. 151–163 Butt, Riazat (2011): Benetton tears down pope-kissing ads after Vatican legal threat, The Guardian, online: http://www.guardian.co.uk/world/2011/ nov/17/benetton-pope-kissing-ads, accessed: 05.03.2012. Calder, Bobby J.; Malthouse, Edward C. (2003): What is Integrated Marketing, in: Iacobucci, Dawn; Calder, Bobby J. (Ed.): Kellogg on Integrated Marketing, John Wiley, NJ, pp. 6-15. V

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WOMMA (2007): 101: An Introduction to WOM Marketing with Definitions, online: http://womma.org/wom101/, accessed: 05.01.2012.

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Appendices A1. List of Authors of Definitions and characterisations of VM .......... XIII A2. Fragmentation of VM Definitions .................................................... XIV A3. Customer Loyalty Ladder ................................................................. XV A4. WOMMA types of WOM Marketing ................................................. XVI A5. Survey Introduction Page ............................................................. XVIII A6. Survey - Stage 1 ............................................................................... XIX A7. Survey - Stage 2 ................................................................................ XX A8. Survey - Stage 3 ............................................................................... XXI A9. Survey - Stage 4 ............................................................................. XXIV

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A10. Survey - Demographic Data .......................................................... XXVI

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A1. List of Authors of Definitions and characterisations of VM x

Cruz/Fill 2008, p. 746;

x

De Bruyn/Lilien 2008, p.151;

x

Dobele et al. 2005, p. 144;

x

Fattah, 2000, p. 1;

x

Golan/Zaidner 2008, p. 961;

x

Helm 2000, p. 159;

x

Henning-Thurau 2004, p. 39;

x

Kaikati/Kaikati 2004, p. 9;

x

Kaplan/Haenlein 2011, p. 255;

x

Kirby 2006, p. 88;

x

Kotler & Armstrong 2010, p. 536;

x

Krishnamurthy 2001;

x

Langner 2009, p. 27;

x

Laudon & Traver, 2001, p. 381;

x

Leskovec et al. 2007, p. 2;

x

Lindgreen et al. 2008, p. 102f.;

x

Marsden 2006, p. xviii;

x

Okazaki 2008 p. 118;

x

Oetting 2008 p. 67ff.;

x

Pastore, 2000;

x

Porter/Golan 2006, p. 26f.;

x

Phelps et al. 2004, p. 334;

x

Shirky 2000;

x

Welker 2002, p. 4;

x

Wilson 2000

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A2. Fragmentation of VM Definitions

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A3. Customer Loyalty Ladder

Source: Payne (1994) p. 30

The process of building up a relationship between the customer and the brand or company seems to produce high efforts in the beginning but considering a longer period of time, advocates or partners might buy a product again and again without big expenses for advertising or, in general, Copyright © 2013. Diplomica Verlag. All rights reserved.

communications later on. Building up long-term relationships to customers will also lead “to cross-sell, up-sell and increased customer lifetime value” (Ferguson, 2008, p.182). Furthermore considering the word-of-mouth marketing which they will do as advocates or partners, this is what makes the loyal customers valuable for every company.

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A4. WOMMA types of WOM Marketing "Buzz Marketing: Using high-profile entertainment or news to get people to talk about your brand. Viral Marketing: Creating entertaining or informative messages that are designed to be passed along in an exponential fashion, often electronically or by email. Community Marketing: Forming or supporting niche communities that are likely to share interests about the brand (such as user groups, fan clubs, and discussion forums); providing tools, content, and information to support those communities. Grassroots Marketing: Organizing and motivating volunteers to engage in personal or local outreach. Evangelist Marketing: Cultivating evangelists, advocates, or volunteers who are encouraged to take a leadership role in actively spreading the word on your behalf. Product Seeding: Placing the right product into the right hands at the right time, providing information or samples to influential individuals. Influencer Marketing: Identifying key communities and opinion leaders who are likely to talk about products and have the ability to influence the opinions of others. Cause Marketing: Supporting social causes to earn respect and support from people who feel strongly about the cause. Conversation Creation: Interesting or fun advertising, emails, catch Copyright © 2013. Diplomica Verlag. All rights reserved.

phrases, entertainment, or promotions designed to start word of mouth activity. Brand Blogging: Creating blogs and participating in the blogosphere, in the spirit of open, transparent communications; sharing information of value that the blog community may talk about.

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Referral Programs: Creating tools that enable satisfied customers to refer

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their friends."

Source: WOMMA (2007), p. 3

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A5. Survey Introduction Page

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A6. Survey - Stage 1

Note: all numbers in percent refer to total amount of 158 probands. XIX

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A7. Survey - Stage 2

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A8. Survey - Stage 3

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A9. Survey - Stage 4

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A10. Survey - Demographic Data

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