Instant Stampede

Viral marketing's potent sales kick

Early in 2006, Peerflix.com, a Web site on which people trade CDs and DVDs, launched an online game in which players score points for snapping pictures of celebrities. The 18-employee, Palo Alto (Calif.) company placed the game, Paparazzi, on several sites that appealed to their movie-loving customers. Word spread fast. The game was mentioned by Entertainment Weekly, Salon.com, and AddictingGames.com, among others, as well as on many blogs. About 6.5 million people played it in its first year, with about 5% then visiting the Peerflix site, says Billy McNair, Peerflix' co-founder and CEO.

That big win prompted Peerflix to release Paparazzi 2 this spring. In this version, players take videos, not photos, of stars. There's another, more subtle difference: The first game had only a link to Peerflix' site, but the company name appears on DVDs scattered throughout the new game. "We're not overdoing it, but tying it more to the brand, and introducing the concept of what Peerflix is," says McNair.

In this age of YouTube and MySpace, online word-of-mouth about a product or brand can spur sales seemingly overnight. According to the 2006 Edelman Annual Trust Barometer, 68% of consumers trust the information they get from a person they perceive as being like themselves more than any other source, up from 22% in 2003. And small companies that have close ties to their customers have an edge. "They already have the goodwill that motivates a person to recommend a product," says Emanuel Rosen, author of The Anatomy of Buzz.

Viral marketing doesn't make sense for commodity products that compete largely on price. And as McNair notes, companies must be careful not to appear too commercial or too manipulative, say, by hiring people to pitch their product who don't actually use it. As powerful as viral marketing can be, "you'll get better results from incremental spin when done in conjunction with a larger advertising campaign," says Peter Kim, senior analyst at Forrester Research.

Nina Riley, CEO of Water Sensations, marketed the Southport (Conn.) startup's product—a clear, fruit-flavored liquid that is added to water to give it flavor without adding calories—by focusing on "extreme targets." These groups tend to drink a lot of water: the obese and diabetics, and dieticians, a group that influences the other two. Last April, Riley posted a free sample offer on her Web site and told Amy Williams, manager of member services for ObesityHelp.com, about it. Williams then posted news of the offer on ObesityHelp.com's message boards. The next day, 582 of the site's members requested samples. "Getting to the source of a community gets to the heart of word-of-mouth marketing," says Riley.

Doing something new and different can also pay off. Just don't favor creativity over a carefully targeted message and making something easy for people to enjoy. Says McNair: "We looked at it from the standpoint of a consumer who'd ask, `What am I going to see? What would I want to pass on to my friends?'"

By Smitha Ballal

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