Chapter 11 - Viral Marketing

Viral Marketing is defined as "Any advertising that propagates itself the way viruses do"; E.g. When Hotmail users send e-mails, they "infect" the recipients with the tagline at the bottom of their messages. Viral marketing denotes any strategy that encourages individuals to pass on a marketing message to others, creating the potential for exponential growth in the message's exposure and influence. Thus, the name "Viral"! Viral Marketing is also called V-Marketing, organic marketing, word-of-mouth marketing or word-of-mouse marketing.

Viral Marketing works best when it induces web sites or users to pass on a marketing message to other sites or users, creating a potentially exponential growth in the message's visibility and effect. In simple words, you pass your message on to 10 other people - each of these 10 people pass on that same message to 10 other people and so on. Such collaborative communications, by nature, needs others in the chain. Everyone simply tells everyone else. ICQ, a service that prompts you when selected friends or colleagues are also online, is an example of a service that is viral by its nature. Its users want to tell their friends about it so that it will be more useful to them.

Viral communication is clearly an enormous opportunity for creating brand growth. Get it right and the rewards are enormous. Your consumers will spread your message for you, at astonishing speeds to a phenomenal number of people. Get it wrong and your carefully crafted proposition will get little further than the marketing director’s in-box.

11.1 Viral Marketing is not a pyramid scheme

MLM (Multi-level Marketing) has its own detractors as well as champions. It is important to point out here the main differences between MLM as is generally practiced and the viral marketing concept that is being discussed here. Just as MLM differs from the infamous pyramid money making schemes (that were grand con efforts), viral marketing is significantly different from MLM.

The major criticisms against MLM are two:

The first - MLM thrives on an unending infinite multiplication through down line proliferation. At the same time, what is being marketed is a physical entity. The participants in MLM are oblivious of the fact that there is a limited supply of the products and there seems to be no one controlling the chain and ensuring that supply can be matched with demand. If the market were to get over saturated, and there is no supply to meet it, the people at the lower rung of the chain are going to get burnt. Those who joined early have nothing to worry as they have made their bucks from their down lines. The criticism thus is that the persons who started this and the early perpetrators in the chain have not pointed out to their down line that there is a limit to how far the chain can actually see fulfillment. Moreover, the participant has first to pay a deposit to join the chain. As long as he/she can see their returns from the deposits coming from their down line, everything is fine. When this stops (due to supply constraint or failure of the primary seller), there would be large number of participants at the lower rungs who paid deposits expecting to recover it from their promoted down lines, but cannot do so.

The second criticism arises from the fact that what the participant is earning from is from the participants’ down line and not from the actual sale of goods or any tangible value. Thus what is being marketed is a dream and the economic theory tells us that this cannot go on.

Well, viral marketing, as we are discussing does not suffer from any of the two lacunae. What you are selling is primarily information, and the transactional cost of either supplying the information or of spreading the message is very low. Thus the risk factor is practically negligible. There is no supply constraint. You can sell as many copies of the e books as there would be persons that you can find in the chain. Moreover, there is no deposit being asked; the up front investment, if any, is minor. You will not be faced with a situation where you have signed up down lines, but have nothing to offer. Also remember that content that can be offered can be as varied as you get persons to join the chain.

Secondly, the earnings being made are from tangibles. They are from real people visiting sites and subscribing to the information that is provided or through buying of other goods and services that were advertised. This is not a get-rich-quick scheme. It is one of those wonders that are offered by the internet medium and technology.

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