“Challenges and Opportunities in Viral Marketing”

Bachelor-Thesis

Freie wissenschaftliche Arbeit zur Erlangung des Grades B.A.

Bachelor of Arts
an der Europäischen Fernhochschule Hamburg

vorgelegt von:

Rudolf   S c h e i p e r s

Datum der Abgabe: 02.02.2007

I. Contents

I. Content ... 1
II. Acknowledgement  ... 3
III. Abstract  ... 4
IV. Preface  ... 6

1. Definition of Viral Marketing  ... 7
1.1. Instruments of Viral Marketing  ... 8

2. Formation of Viral Marketing  ... 10
2.1. Classical Definition of Marketing ...  10
2.2. The Formation of Online Marketing  ... 10
2.3. Separation process of Viral Marketing  ... 11
2.3.1. Types of Viral Marketing ...  12
2.3.1.1. Frictionless versus Active  ... 12
2.3.1.2. Service-been based versus Incentive-been based  ... 12
2.3.1.3. Private versus Public  ... 13
2.3.2. Advantages of Viral Marketing methods  ... 13
2.3.3. Disadvantages of Viral Marketing methods ...  13
2.4. Examples of conducted Viral Marketing campaigns  ... 13
2.4.1. Successful Example  ... 14
2.4.1.1. Success Analysis  ... 15
2.4.2. Ineffective Example  ... 16
2.4.2.1. Fault analysis  ... 16
2.4.2.2. Suggestions  ... 17

3. Challenges of Viral Marketing  ... 18
3.1. Value of a Viral Marketing campaign  ... 19
3.2. Success Factors in detail ... 20
3.3. Defining target group(s)  ... 20
3.4. Matching of product and viral marketing tool(s) ...  21
3.5. The problem of SPAM  ... 24
3.6. Acceptance in public / Reliability of Viral Marketing methods  ... 26

4. Opportunities of Viral Marketing  ... 28
4.1. The success story of Email and the use in Viral Marketing  ... 28
4.2. The advantage of the Internet as a global marketplace  ... 30
4.3. Monitoring of the campaigns / collecting customer information  ... 32

5. Conclusions ...  34
5.1. Challenges of Viral Marketing  ... 35
5.2. Opportunities of Viral Marketing ...  35

6. Outlook  ... 36

7. Appendix ...  37
7.1. Literature List  ... 37
7.2. Table of Figures ...  39
7.3. Table of Abbreviations and Acronyms  ... 40
7.4. Bibliography  ... 41

1. Definition of Viral Marketing

Viral marketing consists of the two words viral and marketing which might appear to be deceptive at first sight because the word viral originally describes anything related to viruses in the medical world. So how can this word be used in the context of marketing instruments?

Viral marketing, which often also can be described as viral advertising, is defined as a kind of follower of word-of-mouth marketing which means that people are passing information verbally. This principle is as old as the human race because people always handed over information in telling it within their environment. Today, in the era of the internet, it is much easier to distribute information online via a broad range of options, so the word-of-mouth marketing is passing into viral marketing. Some existing definitions of viral marketing are as follows:

“Viral marketing describes 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. Like viruses, such strategies take advantage of rapid multiplication to explode the message to thousands, to millions.”¹

“A self-propagating practice or pattern of Internet use that moves from person to person. Works best in consumer e-commerce because of easy adoption. Longer sales cycle for b2b e-commerce makes viral practices less important.”²

“The term "viral advertising" refers to the idea that people will pass on and share interesting and entertaining content; this is often sponsored by a brand, which is looking to build awareness of a product or service. These viral commercials often take the form of funny video clips, or interactive Flash games, an advergame, images, and even text.”³

1.1 Instruments of Viral Marketing

There are many options to distribute information or messages among an enormous number of people via the internet. Consecutively, the most popular and also most effective are described:

• Email & Websites
Distributing messages via Email is one of the most popular and cheapest methods in conjunction with viral marketing. If some points like format (Rich Text, HTML), size and layout are regarded, Email is one of the most effective ways for viral marketing campaigns. The same applies for websites because here it is also possible to reach millions of recipients in an effective way without having high costs.

• Forums & Social Networks
For years, forums have been constant in the internet, but in the last few years also social networks become more and more important in information sharing via the web. An advantage compared to email or websites is that there is an interactive exchange of the participants.

• Online Games & Competitions
One of the most popular and famous online games cohesive to viral marketing was the grouse-hunting game “Moorhuhnjagd” of the company Johnny Walker. Such games can be a very effective way of getting people’s interest for a product.

Figure 1: Online Game “Moorhuhnjagd” from Johnnie Walker

[...]

• Internet Broadcasts and Podcasts
One of the latest trends for a lot of people at the moment is to broadcast themselves via websites like YouTube4 which was bought by Google in 2006. Apple with the iPod5 is the eponym for podcasts, which are short audio files with selected information. One of the biggest advantages of podcasts is that people can listen to them whenever and wherever they like.

• IM (Instant Messenger)
Existing Instant Messengers like ICQ6 or the Windows Messenger7 are small tools users can chat and send attachments with. A new generation is ComBOTS8 where you can also adjust people’s profiles as you need them and you can also deal with emotions and not only with words.

[....]

1 Source: http://www.wilsonweb.com/wmt5/viral-principles.htm

2 Source: http://www.eyefortransport.com/glossary/uv.shtml

3 Source: http://en.wikipedia.org/wiki/Viral_marketing