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Friendly advice or secret ad?

Customers get freebies to join word-of-mouth marketing campaigns.

August 17, 2007|Alana Semuels | Times Staff Writer

Christy Lynn is an office-supplies fanatic. "Some women love jewelry, others love shoes," said the Los Angeles voice-over artist. "I love office supplies."

Naturally, she's a member of Staples' frequent shopper program. So when the office-supply company sent her a questionnaire asking her if she liked to try new products and, if so, if she normally told family and friends about them, she answered yes.

With that, she was accepted in a stealth -- some would say sneaky -- marketing program called Speak Easy. Now, every four weeks or so, she receives a free packet of brightly colored sticky notes or a case of no-leak pens or a coupon for a document shredder from her favorite store.

The company is betting that these little incentives will prompt Lynn to recount the wonders of Staples to her family, friends and anyone else she runs into in the course of a day.

Included with the freebies are a few choice phrases to use when casually plugging the products. A Rollerball pen recently arrived with bulleted talking points that included "specially formulated pigmented ink which helps prevent against check fraud" and "nice, smooth write."

Lynn is one of the millions of unpaid -- in cash at least -- word-of-mouth marketing agents at work in the U.S. today. There's a good chance you've been on the receiving end of such a plug without realizing that advertising was taking place, because these emissaries aren't required by law to tell you that they're pushing products.

Research firm EMarketer estimates that in 2006 about 65 million Americans regularly gave word-of-mouth consumer advice, both through formal programs and just in the course of normal conversations.

It's a twist on an old game. Companies used to pay ordinary people to spread the word about their stuff, planting clandestine marketers on street corners and, later, websites. Consumer advocates complained about the practice to the Federal Trade Commission and in December the agency said it was deceptive to employ ordinary people as marketers without disclosing the relationship to consumers.

The agency didn't launch a full-scale investigation, saying it would evaluate the practice on a case-by-case basis. So, what's known as word-of-mouth 2.0 emerged: Companies enlist consumers they know like their products rather than random people, and instead of money the agents receive free stuff.

Consumer advocates say it's a distinction without a difference.

"We worry about the insertion of a marketing theme into interpersonal relations," said Robert Weissman, managing director of the consumer group Commercial Alert, which asked the FTC to investigate word-of-mouth marketing in 2005. "Don't transform everyday interactions into veiled commercial messages," Weissman said.

Weissman is especially concerned about programs like Procter & Gamble's, which enlists 225,000 unpaid teen "connectors" to sample products and talk to their friends about them. Teens are being "roped in" to a marketing scheme that encourages them to value materialism during a crucial identity formation period, he said.

In total, 725,000 unpaid "connectors" spread the word about Procter & Gamble's products. They receive coupons in the mail to share with friends, or sometimes the product itself. They don't have to disclose that they're part of the connector program, a spokeswoman said, because they're free to say positive or negative things about the products.

Connectors, selected by P&G through a rigorous screening process, typically speak to about 25 people a day, rather than the five or six most of us converse with, the company says. But how to get connectors to talk about Procter & Gamble products?

P&G's word-of-mouth marketing team found that consumers talk to one another when there is "disruptive equilibrium" -- that is, when something out of the ordinary happens, said Steve Knox, chief executive of Procter & Gamble's word-of-mouth division, called Tremor.

So it figured that moms would talk to each other about a dish soap that made kids actually want to do the dishes. It sent samples of Dawn Direct Foam to its connector moms, with literature highlighting its purported attitude-changing qualities.

"A conversation would go, 'My darn children aren't doing their chores,' " Knox said, and then the connector mom would reply that Dawn Direct Foam made her children volunteer for housework. Sound contrived? Knox said the campaign resulted in a 50% increase in the product's sales. And it helped participants too, he said.

"Moms talk to each other if they believe they have a piece of information that is helping their friend," he said.

The Word of Mouth Marketing Assn., founded in 2004 by three word-of-mouth companies worried about deceptive practices in the industry, established guidelines recommending that people disclose what companies they work for. Paul Rand, vice president of the group's executive committee, says consumers working with a member association always disclose that relationship when they're shilling a product.

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