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Promising ROI for pass-along marketing

By Michelle Megna on April 24, 2009 12:53 PM

Peer-to-peer buzz about products is gold to advertisers, after all, most people tend to buy what their friends recommend over what an ad suggests, but quantifying word-of-mouth value has been vexing. Meteor Solutions, a new company, says its technology can connect the performance of paid online ad campaigns with the lift that occurs when people pass on the ads to others through social networking sites and e-mail.

So, for instance, if a customer who clicks on an ad sends the link to the merchant's page to others who've never seen that ad, there's more value to that ad than meets the eye. Especially since industry insiders say word-of-mouth recommendations turn into sales.

"Word of mouth (WOM) is one of the most credible ways to get a recommendation about a company, product or service, and the practice is growing exponentially with the advent of social networking and Web 2.0," says Larry Freed, CEO of ForeSee Results. "Recent research we've conducted has shown that nearly one-fifth (20 percent) of all visitors to the 100 top-grossing retail Web sites came by way of recommendation, and those that came from WOM were more likely to buy, recommend, return to the site and remain loyal."

Also, people referred to e-commerce sites by shared links are four times more likely to buy a product than people who come from other sources, according to the report "Social Media Measurement: Measurable outcomes of social media engagement (tying revenue to social media actions)" by online marketing company Razorfish.

"Put this together with the fact that 20 percent of traffic is coming from word-of-mouth, and suddenly the WOM channel and knowing exactly what's going on there becomes hugely important to e-commerce sites," said Ben Straley, CEO of Meteor Solutions.

The problem for advertisers was that it was difficult to quantify this peer-to-peer buzz, but Meteor Solutions is promising to change that by allowing advertisers to measure, optimize and manage word-of-mouth branding with the same precision as paid advertising.

The Meteor Tracker is built around technology that utilizes tracking scripts to monitor the "pass-along" of content from one person to another through links on Web pages, bookmarks, e-mail messages, instant messenger and mobile devices.

As tracked content is shared among friends, on blogs, and within communities, Meteor Tracker generates a sharing graph that identifies each unique visitor within the graph and captures every site visit generated through each individual source, said Straley.

Using this basic set of data, Meteor Tracker aggregates the number of visits to the content or campaign, the number of those visits that resulted from content sharing and the number of visits from sharing that resulted in an action, for example a sale. For sites that are driving visitors to take a specific action, say, making a purchase, Meteor tracks the conversions and identifies the ones that were the result of sharing.

This is all accomplished by inserting a few lines of JavaScript on to the destination page and the conversion confirmation page. When a visitor clicks on an ad and goes to the merchant's site, through a cookie, the visitor is assigned a unique ID, that's also tacked on to the destination URL, said Straley. So, when that visitor shares the link, future visits to the URL with the ID are tracked by Meteor.

From there, the company can identify that a visitor to the appended URL is not the original visitor because of the cookie. This second visitor is then processed in the same way as the first, and so on for each new visitor to the site.

"It's as easy to implement as Google Analytics," said Straley. "We do all the data capture and analysis, you just log into your online dashboard and see all the data there."

The news of Meteor Solution's tracking technology comes at a time when the shift in demographics on social networking sites, plus the increased amount of time people spend at them, is contributing to the increase of WOM marketing.

"Three years ago, there was hardly anyone over 22 on Facebook or other social sites," said Straley. "That's totally changed in the past three years. And people are spending so much time there, it's eating into the online time they'd have to be doing product research or whatever else they were doing online before."

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