Tuesday, 21 April 2009

The difference between Viral Marketing and Viral Business Models

It's every marketer's dream to "go viral".

However, "viral" can mean two quite different things.

Viral marketing
The first meaning of "viral" is probably the most familiar as it has been around longer. Viral marketing refers to a marketing message which spreads within a community under their own volition (as opposed to one which must be broadcast by its sponsor).

Wiktionary defines
viral marketing
as:
A technique aiming at reproducing "word of mouth", usually on the internet or by e-mail, for humorous, political or marketing purposes.

Some recent examples include:
  • Samsung's Extreme LED Sheep Art video: disconcertingly mesmerising, your guard will be down before the subtle product push appears right at the end.
  • CompareTheMarket.com's CompareTheMeerkat.com: so subtle that many people I've spoken to had not realised it was a CompareTheMarket.com add despite the CompareTheMarket.com name, logo and URL appearing at every conceivable opportunity.
  • The Large Hadron Rap: a brilliant effort to make something extremely complicated, buried underground and with the potential to destroy the entire universe both understandable and cool.
The objectives of viral mareting are simple:
  • to increase awareness,
  • at a lower cost (certainly much lower than a conventional above-the-line advertising campaign),
  • to have some of the campaign attributes ("coolness", innovation, etc.) rub off on the brand (although P.T. Barnum supposedly suggested that "There's no such thing as bad publicity", a viral marketing campaign must surely aim for "good" publicity!), and
  • to get customers involved in spreading the message themselves, which subconsciously increases their comitment to the brand.
Dan and Chip Heath have outlined their three secrets to make a message go viral. To summarise, these are:
  1. it's emotional,
  2. it feels like you're doing someone a favour by passing it on, and
  3. if contains a trigger to pass it on.
Viral business models
Whereas in viral marketing, it is only the marketing message that is viral, viral business models exhibit viral growth as an inherent part of the business model. That is, as a part of their normal interaction with the business, its customers publicise the business to others and/or invite them to become customers themselves.

Examples of viral business models include:
  • Social Networking sites, such as Facebook, LinkedIn, and Twitter: There is no little to membership unless you friends or business contacts are also members, so each member is highly incentivised to encourage others to join. Further, once most of your friends or business contacts are members, you're undera lot of pressure to join up or risk being "left out".
  • Remote multi-player games and consoles: As with social networking sites, there is pressure to buy the same games and console that your friends have so that you can play along with them.
  • Peer Review sites, such as Amazon.com or Amazon.co.uk: These are similar to Social Networking sites, in that the more members there are (and are rating and reviewing the product), the more value each member gets. However, since you don't need to have any relationship to the other members, there is less incentive for you to sign them up - you simply gravitate to the site with the most existing and active members.
  • Multi-level marketing (MLM) or Network Marketing businesses: Not always popular and sometimes bordering on being pyramid and/or Ponzi schemes MLMs succeed by incentivising their members to recruitmore members.
  • Services that advertise themself when their customers use them to share their own content, such as free e-mail providers (gmail.com), blog hosts (blogger.com - visible at the top of this blog post), content sharing sites (youtube.com - used a few times in this post; and vimeo.com - also used in this post) all of which advertise themselves in their URLs if not more overtly.
In his review of Product Planner, Jason Kincaid suggests that the key to creating a viral business model is to create a circular process where by each activity in the cycle involves promoting to or inviting additional users. This process can be the member enrolment process itself, but its even better another process, such as the video embed loop at Vimeo, as the customer will have multiple opportunities to publicise the business and/or invite new members as their familiarity with and confidence in it increases (people are more likely to want to recomment something with which they are familiar than something which is still new to them).

Viral busines models tend have "tipping points" - points at which the adoption rates change markedly. These can be hard to predict. For example, in we were so wrong about Twitter, Rob Diana, suggests that one of the tipping points for Twitter was the adoption by celebrities such as Ashton Kutcher, Britney Spears and Oprah.

The difference between these two meanings of "viral" is significant in its application to businesses. Any business can create a viral marketing campaign. All you need is a sufficiently talented creative team (how about the viral factory and their wikipedia page), and, perhaps, a bit of luck. (That is not to imply that it is easy!) However, a viral business model needs to be built into a new business from the outset, or will require significant business re-engineering to implement into an existing business. I'd hesitate to say anything is impossible, but some existing businesses simply won't lend themselves to viral busines models.

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