FOR the past 10 years, the effectiveness of television and other mass media in reaching younger consumers in the developed world has been on the decline. With traditional advertising techniques gradually losing their ability to reach target audiences, companies are turning to new approaches such as buzz marketing to reach consumers and create demand for products and services in different ways. This article examines this new form of marketing and shows how companies, Red Bull in particular, are putting it into practice.
Trendsetters Buzz
Why have traditional media become less effective in creating demand for products? There are three main reasons. First, is their increasing fragmentation: as the number of television channels, radio stations and consumer publications increases, so the audience splits into smaller groups. This makes it significantly more difficult and expensive to reach an audience of a given size than it was in previous years. Second, competition from other media has grown. Computer games and the Internet have drawn younger viewers away from their television screens.
Research in the US shows that households with internet connections on average watched almost 5 hours less television per week than non-internet households in 2002. Third, people have grown cynical towards brands and multinational companies. Naomi Klein’s anti-brand treatise No Logo continues to sell in large numbers two years after its publication. Protesters trail the meetings of global economic institutions like the WTO and the IMF, attracting growing support for their attacks on the perceived collaboration between governments and big business.
Other threats are also emerging. Digital recording technologies such as TiVo now enable a small but growing number of viewers to ignore advertisements when watching television. Some research suggests that in five years half of US households could be using similar products to bypass commercial breaks.
Yet while the younger generation is turned off by sleek advertising and is highly suspicious of corporate manipulation, it remains highly brand and image-conscious. Buzz marketing, also known as “word-of-mouth marketing”, “guerrilla marketing” or “stealth marketing”, has emerged as a way for companies to get on the right side of consumers in the battle for sales.
Buzz marketing involves getting the trendsetters in any community to carry the brand’s message, thus creating interest in and demand for the brand with no overt advertising or promotion. The brand message can be transmitted physically (for example, people may be seen with the brand), verbally (the brand can crop up in conversation) or virtually (via the Internet). With the proliferation of email and mobile phones, word-of-mouth spreads faster than ever.
Hitting bull’s eye
Red Bull is the master of buzz marketing. It has created an edgy, slightly dangerous image for its drink. When Dietrich Mateschitz formulated the drink in 1987 for the Austrian market, bars initially refused to stock it, seeing it as more of a medicinal or health-related product than a mixer. However, snowboarders and clubbers soon recognised the boost it gave them, and began bringing it with them to alcohol-free discos. It wasn’t long before bars were stocking Red Bull, and the pervasive fluegel (the original concoction of Red Bull, cranberry juice and vodka) became the drink of choice in Austrian ski resorts.
The company keeps tight control on how it markets itself to clubs and bars. In its eight US sales areas, representatives scout out hot spots – the bars and clubs frequented by trendsetters. Once they have identified five key venues, they offer them branded refrigerators and other freebies along with their first order. If other, more conventional establishments ask to stock Red Bull, the company refuses, reinforcing its underground association and street credibility. To cultivate its link with the club crowd, Red Bull set up the Red Bull Music Academy, a two-week annual event that brings together aspiring DJs and their icons.
Consumer education teams also help generate buzz. One of the first marketing techniques Red Bull employed was to hire student brand managers at university campuses, giving them each a case of Red Bull and encouraging them to throw a party. It hired hip locals to drive around in cars emblazoned with the logo and decorated with a four-foot model of the trademark blue and silver can. The cars carry fridges stocked with more than 250 cans of Red Bull, which they distribute to “those in need of energy” – shift workers, truck drivers, university students, executives, clubbers and athletes.
Red Bull sponsors a number of extreme sports events, including cliff-diving, kiteboarding, snowboarding, motocross, mountainbiking, paragliding, street luge, ice cross downhill, skateboarding and surfing. By allying itself with those who push the boundaries in these extreme sports, Red Bull has become an extreme drink by association. Dangerous and not supported by the establishment, the social circles related to extreme sports are ideal for word-of-mouth advertising.
Many argue that Red Bull created the energy drink category by itself. While Coca-Cola and Pepsi were quick to follow, with KMX and SoBe respectively, it continues to dominate the market, with a 65 percent share of the US energy drink market. And it achieved all of this with minimal advertising. It has since begun to advertise on television, but only late at night, and it insists that the commercials are there to reinforce the brand, rather than establish it in new markets.
Red Bull’s success with buzz marketing has caught the eye of mainstream companies. Traditional marketers, however, tend to be uncomfortable with the relative lack of control over the message and target audience that buzz marketing offers.
Among conventional large companies, pharmaceutical companies have perhaps been the most successful in marketing their products to doctors and consumers using word-of-mouth. For example, it is a common practice for companies launching a new drug to select reputable scientists and physicians to conduct clinical trials and to promote treatment. Healthcare is particularly susceptible to word-of-mouth marketing – people rely on doctors and friends for treatment referrals, and increasingly, educate themselves on the Internet.
Buzz is useful to help generate demand in many contexts, but is particularly effective for products that generate conversation: in other words, products with which consumers are emotionally involved. This depends on the type of product or service offered, its target market and the network of people in that market. It can be the perfect tool to create an underground campaign, yet backfires badly if it appears contrived, turning off precisely those consumers it wishes to attract. Knowing how buzz-prone your target customers are can help determine how effective a buzz marketing campaign might be for a specific product or service. Then it’s just a case of giving your customers something to talk about.
By Professor Nirmalya Kumar and Sophie Linguri,
Co-Director and Assoc. Director of the Aditya V. Birla India Centre at London Business School