Brand Autopsy (my newest semi-regular stop in the morning) posted an interesting entry yesterday evening on word-of-mouth marketing. This might be a good time to address why I follow this topic – and branding in general – on a blog that covers industrial design, rapid-prototyping technology, and virtual reality/gaming. The answer to that is actually pretty simple: to me, word-of-mouth is virtual product. I don’t think I can explain that satisfactorily in this format but in the near future I think there will be examples (I’m hoping to provide some myself).

Anyway, because that’s how I see things, I give considerable thought to this topic. After all, in order for all three of my covered topics to “fuse” – a part of what I consider a rebang – something needs to fuel the fire (i.e. pay for the effort). Advertising revenue is the natural choice (hey, it’s working for Google). Furthermore, when I talk about virtual world advertising, I’m talking about efforts that go well beyond the limited “put a graphic on a videogame billboard” solution. That’s so… Newtonian. At this point it’s probably worth cuing some comments from ad guru Rishad Tobaccowal given in a recent interview over on BusinessWeek:

He’s less than impressed with some of the supposed solutions offered by others on Madison Avenue. One example: product placements in movies and TV, a common tactic advertisers are using to combat the popularity of DVRs. Tobaccowala dismisses most of them as “lazy” and then adds an expletive that can’t be printed in a family magazine. “The spine of our business has collapsed, and what we are looking at are the organs, blood, and connective tissue on the floor in a pile of goo,” he says. “We have to imagine what the new structure is going to look like.“

No wonder reports I’ve read lately covering recent advertising conferences sound so horrific: the overall industry is apparently having major trouble dealing with new technology and the changing mediascape. And from his comments it sounds like Madison Avenue has relegated imaginative thinking to the advertising content itself and has no idea how to be innovative with their own business model.

So anyway, while spending more time trying to crack the revenue nut this morning something hit me: a whole lot of manufacturers don’t really advertise (in the sense of having , for example, television ad campaigns)… or even consider it an option. Any more obvious and that revelation could have been the background on my computer screen. How did I miss that? No wonder I’ve gotten nowhere talking with some of them. The big one’s seem to think they have it all figured out (and are the one’s probably going with product placement solutions of the kind Tobaccowal derides) and the small ones likely figure they don’t have any opportunities to break into the game (pun intended) and so don’t give it the time of day. Besides, if the smaller ones – who might be more open to trying new, low-cost methods – can squeeze their way into Wal*Mart or some other major distribution channel, then why should they concern themselves with advertising? They’ll probably move more product then they can keep up with. Why indeed?

Well, seems like the potential for increasing sales and profits might be reason enough for some of them (others may be just “Old and Stubborn” perhaps). But more compelling might be that this provides a cost-effective fallback in the event the retail buyer decides they just don’t “get” their latest product offering and doesn’t deem it worthy of reserving shelf space for the next “mod set”*. Not everyone gets into Wal*Mart or Target. And you have to move inventory somehow.

This leads me back to Brand Autopsy’s entry and this portion in particular:

Also marketers need to realize word-of-mouth is more than a marketing issue — it’s a business issue. Marketers cannot simply sprinkle magical word-of-mouth marketing dust to create long-lasting word of mouth. For endearing and enduring word-of-mouth to happen, the activity must become part of the company’s culture. Sustainable word-of-mouth is much more a way of doing business every day than a component to a two-week heavy-up marketing blitz.

If there was one thing that raised an eyebrow at the small, advertising-bereft companies I know, it was the whole idea of viral marketing that received so much media attention a few years back. I’m unsure if they’re using viral marketing techniques to promote their products, but I don’t think they are. Which leads me to now ask: Why not? Well, the above comment makes an interesting point. Followed logically, it raises the possibility that viral marketing – and my ideas related it – may be too close to core business and marketing issues (like corporate culture, brand identity, aso) for comfort. This is something I’d not really, seriously considered. It’s easy to try a marketing technique; not so easy to create brand loyalty of the kind enjoyed by companies like Apple or Nike. Given that so many people in industry are still unaware of the term “experience design” and others believe they can sell brand instead of innovative product (see my previous post on this topic, or Brand Autopsy’s blog entry, or more recently Bruce Nussbaum’s blog post on this subject.), the reasons behind the confusion over what I’m proposing now seem more clear. The issues with my ideas may run much deeper than I’d realized.

Tobaccowal is right. What a bloody mess.

*A “mod set” is typically a yearly event in which a retailer rearranges their stores; most mod sets for large U.S. retailers occur in late Spring.