If you don’t know much about Viral Marketing, check out this link:

http://www.imarketings.net/internetmarketing/35

In his book, Mark cited two distinct types of viral marketing tactics. The first is driven by incentive, which he called “Incentivized Word of Mouth.” In this type, the Word of Mouth is spread by greed – “ the greed of gaining the reward offered for spreading the message.The second type, he named “tag]Inspired Word of Mouth.” In this type, the Word of Mouth is spread by the pure motivation of sharing good information. This type of viral marketing, Mark maintains, is much more powerful.

I both agree and disagree with his words. It is absolutely not an “evil”to use monetary (or other) incentives to motivate someone to spread the word about your products. But let me say that with the caveat that it’s only not “evil” provided that you are not intentionally selling low-grade quality products, and are therefore exclusively relying only on the reward scheme of your affiliates to expand your business. I have seen many network marketing programs use this tactic in a wrong way. And the result you can always bet on: more than 99% of them fail miserably.

Good product motivates people to spread the words about it, and only good product can excite customers. In this, I definitely agree with Mark. As he says in his book, “There is no substitute for an ecstatic customer.”

Therefore, viral marketing motivated purely by greed is doomed to fail.

If you are interested in reading Mark’s book for yourself, visit this link:

Tags: Incentivized Word of Mouth, The Irresistible Offer

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Viral Marketing

If we take a look at the background of YouTube, it lacks the very successful elements of previous successful dot.com companies. It does not have proprietary technology nor does it possess customer lock-in capability – a very important element for a market leader to keep on dominating market.

In study of successful dot.com companies like eBay, we have to go back to a special network utility phenomenon called Network Externality Effect. Its basic argument is a network’s utility increases exponentially with the number of users in the network, making it more valuable in due course. For explanation of this phenomenon, refer to another post here:Â Metcalfe’s Law and Network Effect.

Theoretically if you run a similar auction network service like what eBay started to do more than 10 years ago, it’s unlikely you can knock down eBay because it has already had so many buyers and sellers entrenched in its network. Its network utility is so high that you have no way to attract new users to your service, no matter how hard you try. When a new user (irrespective of whether he/she is a buyer or seller) is looking for an online auction service to join, their most likely choice will be eBay.

The network effect keeps boosting the increasing network dominance power of eBay, making it virtually invincible. Sometimes we call this phenomenon “The Law of Increasing Returns”.

But we don’t see this in YouTube. It has no customer lock-in capability. Theoretically, let’s say that if you have sufficient capital to start with a server farm facility as big as YouTube, you can start offering services to public like they do, allowing users to upload their videos and share them with others. A new user can select your service or YouTube. YouTube has no immediate advantage over your new service to this new prospect.

YouTube model actually works on the viral marketing effect – the marketing effect that takes place to boost its exposure by people’s word-of-mouth. For a further discussion on viral marketing, refer to this post – Viral Marketing: A Powerful But Free Marketing Tactic. The new service can definitely take this viral marketing approach. It doesn’t matter if it’s a late comer.

Let’s go back to the discussion of eBay. The only way you can knock down eBay is to start a new service that rests on a new technology that eBay does not have. And that technology must truly benefit the new and current users of eBay in a way that can pull them away to try your service. This is the only way you have chance to succeed.

To put it another way, the way to win and keep your market position is to possess new technology, if you do not have the network externality effect that helps like companies like eBay.

We cannot see this in YouTube either. The video broadcast technology is neither new nor exclusive to YouTube. Although we know that they claim to have proprietary technology to identify copyright protected material, but that is not the main theme of this deal.

Google spent $1.8 billion US to acquire this company. The same amount of money (perhaps much less) can definitely be used to build broadcast facilities that resemble the power of YouTube. This is addition to the fact that Google already started its own video service years ago.

The only advantage we can see for this deal is its immediate access to its vast number of broadcasting page views, and that it can put to use for its famous and profitable Adwords’ service customers.

Even though it represents only a tiny portion of its vast market capitalization of $131 Billion US (as of stock closing at Oct 10, 2006), is it really worth the $1.6 billion US expenditure?

Related Topics: Google , YouTube, Google Acquires YouTube, YouTube is acquired by Google, Google Acquired YouTube, Network Externality Effect, Law of Increasing Returns, Network Effect, Market Capitalization of Google, Market Capitalisation of Google, Viral Marketing, The Law of Increasing Returns, network utility, customer lock-in capability, Google Adwords

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General Internet Marketing, General Marketing, Google, Google AdWords, Uncategorized, Viral Marketing

Here comes one good example of how you can use public domain material to create powerful presentation for viral marketing.

Enjoy the show!

Please note the dialogues in the presentation are actually excerpts from public domain work. This is an excellent example how you can use public domain material to create attractive content.

Access this post to get some free public domain work in MS Word format.
Damen

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Public Domain, Viral Marketing

According to wikipedia.org, the term viral advertising (or marketing) refers to “the idea that people will pass on and share interesting and entertaining content; this is often sponsored by a brand which is looking to build awareness of a product or service. These viral commercials often take the form of funny video clips, or interactive Flash games, images, and even text.”

The beauty of viral marketing comes from the fact that you can spread your message exponentially, reaching people in tens of thousands quite rapidly. For example, you send an interesting video to 10 people. Each of those 10 people re-distributes the video to 10 more people, reaching 100 people in turn. If each of those 100 people then sent the video to another 10 people, you’d reach 1,000 people in third round!

You do the math. You can easily see that the number of people you can reach in each round goes up exponentially at the power of 10. And more importantly, you don’t pay a dime for it. It is free! And what’s better than free advertising for your message?

However, for viral marketing to be successful, the single most important element you need to have is a product/message that is meaningful and useful to the people in a particular niche market. And that product/message has to inherently motivate those people to want to introduce it to others, and then the viral effect takes off!

Want to have some examples? Here is a good one. Go and choose to watch the presentation. Enjoy!

Best Viral Marketing

Damen
P.S Stay tuned by subscribing to this blog if you want to know more about viral marketing. I’ll have an interesting case study to share with you next time!

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Viral Marketing