And these figures come at a time when budgets are being cut left and right. Recent eMarketer reports predict an 8.2% decline in total media ad spending over 2008. WOM spending’s “double-digit growth in this economic environment is a strong sign of an increasingly prevalent role in the future,” says Patrick Quinn, president and CEO of PQ Media.

What should all these additional dollars spent on WOM be targeting? “The most influential marketer in a consumer’s life is someone they know and trust, such as a family member, friend or colleague,” said Quinn. No surprise there – recommendations from friends and family are still the information source most valued by customers, followed by customer opinions posted online.

Social media has made these influencers more powerful and connected than ever before. So how can a brand capitalize on these opinions? By integrating with social media to help customers help each other.  The first step to getting customers to talk is to give them a voice. In generating word of mouth, amplifying this voice is the key to turning WOM into ROI.

The numbers don't lie: shoppers online trust the opinions of other shoppers like them.

Second only to recommendations from people known, opinions posted online are the most valued information source by consumers. According to the new Nielsen Global Online Consumer Survey, 70% of people trust recommendations from unknown users online, up 9% from 2007.

Jonathan Carson, president of online, international at Nielsen Co., attributes this increasing trust in online recommendations from strangers to the “explosion” of available user-generated content in the past few years. “… Consumers' reliance on word of mouth in the decision-making process, either from people they know or online consumers they don't, has increased significantly,” Carson says.

And trust in online recommendations is even higher in some segments. A recent study from BabyCenter, LLC found that 73% of mothers online trust the information they find on products and brands through online communities focused on their interests.

Trust in traditional forms of advertising increased as well, the study shows. Trust in brand websites increased 10% over 2007 to 70%. Carson asserts that this increase in trust could be due to the swell in available consumer-generated media (CGM) as well. “… It’s possible that the CGM revolution has forced advertisers to use a more realistic form of messaging that is grounded in the experience of consumers rather than the lofty ideals of the advertisers,” he says.

This comes as no surprise to Bazaarvoice; our clients know that the mere presence of user-generated content on brand sites builds trust in the brand and drives sales, even for products without reviews.

As the presence of online UGC continually grows, online consumers will become increasingly dependent on feedback from shoppers like them in their purchase decisions. Are you giving your customers the information they need to make a purchase?

Art by fellow Texan, Hugh MacLeod.

Re-read this classic post about the Consumer/Marketer Control Framework, and this one: How Advertising Will Evolve Using Word of Mouth.

But the complete value of user-generated content – your customers’ direct input – lies beyond just e-commerce results. We’ve seen UGC have an impact everywhere from the customer service desk to the CEO’s office. In this series of blogs, we’ll explore how Bazaarvoice clients have seen real value across their organizations. You can read more on the “cross-functional impact” area of our site.

Directors of Marketing think daily about their brand’s positioning and messaging, how to best reach target audiences, and how to best promote – and measure – products and services. Collecting customer input on your site gives marketing directors insights into what is most important to them, and we’ve seen user-generated content improve advertising content and results throughout the channel – email, catalogs, online advertising, and more.

Providing authentic content for all marketing and advertising channels

Customer input creates great ad copy. QVC featured top-rated products on their broadcast, and business-to-business marketer Treatment Abroad, which matches surgeons around the world to UK prospects, created a compelling marketing piece. Samsung featured customer reviews in their pre-Super Bowl email campaign.

And UGC drives online advertising, as well. When they tested review content in their Google ads, Office Depot saw a 196% increase in their paid search revenue. Intuit prominently featured customer reviews in the largest online promotion of customer reviews – ever. And there are multiple case studies showing how reviews improve email results.

Improving partner and media campaigns

BrandVoice allows manufacturers to syndicate their customer reviews to retailer sites, increasing results for both parties. By syndicating reviews to OfficeDepot.com, Kingston doubled conversion, and review volumes exponentially increase for branded products on retailer sites.

Bazaarvoice’s new sponsored Stories campaigns enables brands to engage with consumers on targeted media sites, sharing content across the media site and the brand’s site – and retailers can get involved, too.

Impacting offline purchase decisions

Not all purchases are made place online, so Bazaarvoice products extend beyond the web. Recent analysis with Cars.com showed that product reviews help Cars.com drive "intent to buy". Our newest solution, MobileVoice, lets customers read online reviews on their mobile phones, allowing them to get customer reviews from anywhere – in the store, in the mall, or even in transit.

There are dozens of ways user-generated content impacts marketing – and the rest of your business. Customer oxygen can impact your entire organization – and we can prove it.

Click here to view the embedded video.

A few weeks ago, during a visit with my almost four year old niece, Zoey, I heard her scream, "I hate commercials!" during a commercial break as she watched one of her favorite TV shows.  Toyota, this is your nightmare.  Or at least, this will become your nightmare in about 12 years, when my sixteen year old niece starts begging her parents for a car.  It will probably be whatever make and model her friends are raving about at the time, not the car she saw advertised on TV or the Internet.  [For the record: I am the very satisfied owner and primary driver of a Toyota-made automobile.]

All of this brings to mind a short essay called "Brandalism" written by Banksy, the semi-anonymous British street artist that some authorities call a vandal.  He happens to be my favorite artist, as I find his work to be more thoughtful and politically and culturally relevant than most of the work I see in contemporary art exhibits.  Moreover, his work is truly public, whereas most "art" as we commonly know it sits in private collections, to be appreciated by only a privileged few.  In his book, Wall & Piece, Banksy writes:

"People abuse you every day. They butt into your life, take a cheap shot at you and then disappear. They leer at you from tall buildings and make you feel small. They make flippant comments from buses that imply you're not sexy enough and the fun is happening somewhere else. They are on TV making your girlfriend feel inadequate. They have access to the most sophisticated technology the world has ever seen and they bully you with it. They are The Advertisers and they are laughing at you.

"You, however, are forbidden to touch them. Trademarks, intellectual property rights and copyright law mean advertisers can say what they like wherever they like with total impunity.

"Screw that. Any advert in public space that gives you no choice whether you see it or not is yours. It's yours to take, re-arrange and re-use. You can do whatever you like with it. Asking for permission is like asking to keep a rock someone just threw at your head.

"You owe the companies nothing. You especially don't owe them any courtesy. They have rearranged the world to put themselves in front of you. They never asked for your permission, don't even start asking for theirs."

To some, the passages above probably sound a bit militant.  To me, they are a wake-up call and a vision of the future.  The day is coming.  My niece is already there.  Colin Anderson, the 'community organizer' behind the Facebook group mentioned above, is already there.  With those qualifications, he'll probably be President one day.  The question is when will The Advertisers get there?

It will take some time.  In the meantime, advertisers will attempt to delay the inevitable by paying their agencies to build websites that allow us to create clever commercial mash-ups that we can send to our friends and post on our Facebook profiles.  In my opinion, that's the equivalent of handing out free bags of rocks for us to throw at our friends' heads (see first rock reference above).

For the record, I don't have the perfect answer to this quandary.  At Bazaarvoice, we're developing alternative ways for consumers to learn about brands, products, and services and arm themselves with the information and confidence to make the best decision for their needs.  The consumer perspective is the most important one in our product development process, although we sell to . . . The Advertisers.  Products like Ratings & Reviews, Ask & Answer, and Stories are the result.  We're in the first phase of a massive change in the power structure, and we're doing what we can to make that transition a smooth one, one that CMOs and CFOs and CEOs are comfortable with.  We're enabling companies to engage and communicate with consumers in ways they would have never conceived of just a few years ago.  A great example is the Christmas campaign launched by Canadian Tire using our Stories product.  Rather than bombard consumers with a repetitive advertising message (and risk a backlash like the one Toyota has recently experienced), Canadian Tire has simply enabled their best customers to create and BE the advertising for them.

In closing, if you are responsible for your company's advertising spend or if you report to the person that is, please read and share this post.  This post isn't a threat, it's just an opinion piece, and my opinion is that there are other "Saved by Zero"-style backlash movements out there just waiting to happen.  Don't be one of them!  There are more authentic, creative, and meaningful ways to accomplish the same goal and enlist the passion of your most loyal and satisfied customers at the same time.  If you give your customers the tools, they'll become the Sales & Marketing department you wish you had – millions strong, absolutely ecstatic about your products, and willing to work overtime to help you succeed.  (No offense intended to Bazaarvoice's Sales & Marketing teams, who are the best I've ever worked with!)

Let’s start this with what we’ve learned. It’s been nearly three years since the public launch of Bazaarvoice. We and our retail clients have discovered so much about the demand and effect of customer-generated content.

We know consumers want to hear from others like them. In fact, they demand it. Jupiter and Forrester report over 70% of customers seek reviews when shopping online. Forrester found that the number of online shoppers reading reviews has doubled year over year. And Jupiter reports that over 60% of people who buy offline had researched online, thus reviews impacts a large percentage of offline purchasing as well.

We also know customer content affects the top and bottom line for retailers, driving dramatic improvements in online conversion, average order value, search traffic, returns, advertising effectiveness, and customer satisfaction. Together we’ve learned that more customer content equals more impact. 25 reviews on a product can have up to 400% higher conversion than if it has five reviews. Products with more than 30 reviews see a 49% increase in time on that product page. Many of our clients are leveraging the customer voice to not only effect conversion on their ecommerce site, but also to impact search advertising, print advertising, catalog, product selection and much more. We expect this trend to accelerate. See the abundance of research, stats and case studies.

So, consumers want content from other customers because it helps them make a purchase decision. Retailers want customer content because they know it helps them sell products. However, looking across over 200 retail clients, we see that less than 20% of any manufacturer’s/brand’s products have reviews. Where can retailers and customers get more customer content?

BrandVoice is a new Bazaarvoice program which enables brands and manufacturers to collect customer-generated content (such as reviews, product answers, or stories) on their site and syndicate that content into retailers. As you will see later, we have proven this program has a truly dramatic impact on that brand’s sales, as well as brand equity.

Today Bazaarvoice serves over 50 manufacturer brands, some which sell direct and some which don’t. Shown are just some of the brands Bazaarvoice serves (see client list).

These brands were later to adopt customer content on their site than retailers, for obvious reasons. But in the last year brands have become a growing percentage of the Bazaarvoice client base. Manufacturers are realizing they need to embrace transparency in today’s customer-driven economy. They’ve also realized, as retailers have, that over 80% of reviews are generally positive. And the negative reviews are ‘gifts’ to help them improve products to be a stronger company.

Now, with the announcement of BrandVoice, we can enable our client network of over 200 retailers who can opt in (for FREE) to receive reviews, customer-generated Q&A, or stories directly from customers who contribute content on the manufacturer’s site. This is the first “user-generated channel marketing” program (as we’re calling in) in the market. And unlike typical co-op and MDF (market development funds) programs that push a brand’s logo or marketing message, retailers can now promote the authentic word of mouth into the shopping experience. And get measured results.

Let me give you an example:

In February 2008, Kingston launched Bazaarvoice Ratings and Reviews solution on their site. Thousands of customers who visit their site could write a review on memory sticks. Meanwhile, Office Depot (also a Bazaarvoice customer of Ratings & Reviews) was also collecting reviews on Kingston. By October 2008, only 66% of Kingston products on Office Depot had reviews, averaging only one review per product. Then, last month, Bazaarvoice matched the products and syndicated reviews from Kingston.com into OfficeDepot.com’s retail site.

The results were as follows:

• Reviews for Kingston products catapulted to 10 per product from one, compared to the category average (i.e. their competition) of 1.5 reviews per product
• Conversion on Kingston products that had syndicated reviews shot up 92% that month
• Even conversion of Kingston products that still didn’t have reviews went up 35%! (we’ll come back to this)

The online sales impact is impressive. And if findings from studies holds true, Office Depot should see higher customer satisfaction scores. Also, both Office Depot and Kingston should see better upsell on these products as well as lower returns.

Let’s expand on that last finding…conversion on Kingston products that didn’t have reviews went up 35%. It tells us there is a “halo” effect of shoppers seeing so many Kingston products with reviews. Visibility of so many products that are highly reviewed, in turn, lifts conversion on other Kingston products. Thus the increased review penetration dramatically lifted the brand equity for Kingston. Now, imagine that impact after Kingston reviews are syndicated across multiple online retailers that carry their products.

Over 70% of shoppers seek review reviews before shopping. These shoppers are closer to the point of purchase. The volume and quality of the customer voice on a brand becomes a brand’s competitive differentiator. It becomes the “uncommoditizer” effect for the brand, if I can make up a word. Compare this to search advertising: further from purchase, more intrusive, more ignored, and less scalable.

You may be surprised at how many reviews these brands could solicit from customers coming to their site. We did some analysis for a brand to look at review volume for their brand (all their products) across three major retailers. After the brand launched Bazaarvoice Ratings & Reviews on their own site, within six month they collected 4X the number of reviews compared to the three retailers.

We performed the same syndication for Dell into a major retailer, and they saw reviews per product go from 32 to over 1,100, compared to a category average for laptops of 21. For Epson, their BrandVoice syndication grew reviews per product to 33 from one, compared to their competitors who averaged one review per product.

The impact of this program doesn’t stop at the web site. As mentioned earlier, through working with Bazaarvoice Community Managers and sharing best practices, retailers are getting more sophisticated at putting customer content in the center of their entire marketing strategy. Top Rated products are being merchandised in navigation, search, sorting, email campaigns, catalogs, search ads, catalogs, and in store signage. Retailer marketers are changing their strategy, and the brands with more customer content are more likely to be included and visible through these strategies. So the syndicated content has a growing, amplified effect as Retailers continue to evolve towards these best practices.

The impact of BrandVoice is conceptually captured in this formula:

Salience and credibility of customer content
X number of syndication nodes (retailers accepting content)
X amplification through Retailer marketing tactics (search, filter, sort, email, advertising, etc.)

Plus, the content also lives on the brand’s site, improving brand equity for those visitors, giving valuable product feedback, and attracting natural search traffic.

These are tough economic times. Retailers are challenged to sell products amidst discerning customers. We believe customers will seek customer created content now more than ever to make wise purchase decisions. Therefore, your customer’s word of mouth becomes the most critical marketing asset you can have, in good or bad times.

From a financial perspective, the elegance of user-generated content is that it’s a growing annuity.

It is a marketing asset that blossoms and becomes working capital for your company. The net present value of a user-generated channel marketing strategy is far greater than traditional advertising, because the customers contribute content every day and the impact is multiplied through the channel. Unlike traditional advertising, there are not heavy design or agency costs or creative depreciation. Over time, costs scale compared to the return word of mouth brings. It’s possible your CFO has fantasies that marketing investments like this actually exist!

I recently saw a Subway ad congratulating Jared “Jared from Subway” Fogle.  It’s been 10 years since Jared now-famously lost almost 250 pounds by eating his self-crafted “Subway diet". That got me wondering how this story came to light in the first place.

According to Jared’s page on Wikipedia, an old dorm-mate that hadn’t seen him in a long time ran into the new, skinny Jared and wrote an article about his amazing weight loss in the local university paper.  After a reporter for Men’s Health saw the story, the magazine wrote their own article, which was in turn noticed by a Chicago-area franchisee.  The franchisee took the story to Subway’s Chicago area advertising agency, who finally contacted Subway’s overall marketing director.

Whew!  By my count, the Jared story had to be told five times until it reached Subway corporate’s ears.  At each point, the story could have easily died, never to be heard from again.  Only through the persistence of the regional ad agency did the commercials we’ve all seen, which have dominated Subway’s marketing message for the last 8 years, even make it to TV. In the end, they found Jared and used Jared to become one of the most successful marketing stories told.

A decade later, many companies are starting to let customers tell their stories directly on their site, next to their brand, and to the rest of the customer community – at the same time.  More and more websites are providing an easy outlet for customers to stand up and declare their own success stories. 

At Bazaarvoice, we’re excited about a new product of ours that, among other things, helps you "find your Jared". It's called Bazaarvoice Stories which allows customers from companies like David’s Bridal share their stories.  Not only can prospective customers read these stories, but David’s Bridal found their own "Jared's" and promotes them here. I'm sure they can do a lot more with these incredible customers.

How would you find your Jared?  Maybe more importantly, how would he or she find you? 

So why not take it a step further and utilize customer generated content in the form of product reviews in advertising?

Advertising has become so ubiquitous that it is mostly ignored and consumers don’t trust the messages that companies send them. But the customer’s voice is as powerful offline as it is online, so why not take advantage of it?

Best Buy recently featured their customers’ voices – actual snippets from online product reviews along with product ratings – in their nationwide Sunday newspaper circular. They utilized a clear call to action to drive consumers directly to their “Top Rated Cameras” page, giving shoppers quick and easy access to top rated cameras. This not only provides a great way for Best Buy to advertise their top cameras, but it allows them to easily measure the success of this advertisement by measuring traffic to this page and sales conversion of these products.

This is another example of a Bazaarvoice best practice developed by our team of Community Managers – use your customers’ words to fuel your entire marketing mix. We strongly encourage our clients to use their customer reviews (along with other valuable user generated content such as from our Ask & Answer, BrandVoice and Stories products) in all forms of advertising: email marketing, online ads, store signage, print ads, Facebook groups, etc.

There is no more effective way to get customers to listen than to let them hear from other customers just like them. This is the future of advertising or should I say “effective" advertising!