P&G's Tremor - ReinventingMarketing by Word of Mouth

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“The illusion is that your marketing elements are selling your products. The reality is that people are buying, not necessarily in response to you, but in response to what they hear from independent source… There is a large body of research that shows that people gather information from your marketing materials, including sales people and advertising, then talk it over with friends. They buy in response to what other people say about the product.”¹

- George Silverman, Author, The Secret of Word of Mouth Marketing

P&G's Tremor - ReinventingMarketing by Word of Mouth

Brushing aside the myth that ‘Word of Mouth (WOM) marketing is luck', Procter & Gamble (P&G) explored the challenges and promises of WOM, and came up with a marketing division called ‘Tremor'. Tremor integratedWOMinto a totalmarketing effort, executed plans in its entirety, and measured its impact after the campaign was complete (Annexure I). Tremor was created in 2001, targeting teens in the age group between 13 and 19, tapping their gossip factor. There are 24.3 million teenagers in US within this age group and they spend nearly $120 billion a year on various goods and services.² Moreover, they have influence over another $485 billion of purchases that parents make on things such as groceries, computers and cars.³ The teenagers are independent and diversity seekers, so they are not loyal customers and can be easily influenced. Tremor, in a span of two years had built a national network of teenagers, 280,000 in number⁴ who advocated from movies to milk, shampoos to motor oil, pushing products on friends and family and that too for free. By 2004, roughly 1% of the US teen population was involved⁵ and many of the kids were not even aware of their involvement in a marketing event of such a magnanimous scale. The success was evident from the fact that Tremor's revenue for 2004 was projected to be $12 million.⁶ But WOM is a marketing tool and not a complete marketing effort. David Godes, a business professor at Harvard, said, “If it (WOM) gets too pervasive, there could be a consumer backlash. It needs to stay on the periphery.”

The Business Model

Tremor's business was based on a research on how trends develop (Exhibits I and II). They identified that there are two types of people associated with trend, the ‘Trend Setters' and the ‘Trend Spreaders'. Trend Setters are people who thrive on being different from others. They dislike being copied and once someone copies the style, they do not consider it trendy anymore. Though these people accept a trend early, they may not really advocate it.Whereas the Trend Spreaders, as soon as they observe a trend, get into the act of getting all their friends to adopt the trend. These are the most valuable people for a brand. It just requires 1%of the trend spreaders to influence the company's sales dramatically.

The other significant feature of Tremor's research was the distinction made between the use of advocacy and amplificationwithinWOMmarketing (Exhibit III).Advocacy implies that the newidea or product isworth talking about.While amplification are platforms,whichmakes it easy for teenagers to speakabout the idea or the product.There are products that require high advocacy but lowamplification, such asCrest teethwhitening strips. The Crest teethwhitening strips are popular and people believe in them, so there is no need to create hype about the product ormake it a topic of discussion at the parties. On the other hand, there are products that require high amplification, and low advocacy, such as Budweiser's ‘Wasssup!!'campaign.⁷The amplification creates such a hype that gets everybody talking about the event but they may not necessarily talk about the brand or the product.

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1] “The rise of word of mouth marketing”, http://www.aktuelno.com, May 17th 2004
2] Morrissey Brian, “P&G Targets Teens With Viral Campaign”, http://www.clickz.com, October 29th 2002
3] Casanova Dan, “Downtown and the Youth Market”, http://www.uwex.edu, June 2004
4] http://www.tremor.com
5] “Smells Like Teen (Marketing) Spirit”, http://www.forbes.com, January 27th 2004
6] Wells Melanie, “Kid Nabbing”, http://www.forbes.com, February 2nd 2004
7] A series of comedy ads for Budweiser beers, where the actors in the adverts greet each other with the cry ‘Whassup?'