The Holy Grail – Predicting Word of Mouth’s Impact

As noted by Matt Galloway and Steve Rubel, Cymfony recently launched a marketing resource center. Matt provides his insight regarding this new resource, I agree with many of his points.

What I found fascinating was one paper in particular that dealt with the predictive power of online opinions. Granted, the paper is “dated” (data on the blogosphere in my opinion ages like dog years) but the findings are encouraging: the study found that about 20% of the time, there was a correlation between the efficacy of WOM and book sales ranking on Amazon. Clearly this is a microcosm: The blogosphere; one type of product; and a controlled environment. I would however venture to guess that if repeated, this number would be higher today.

(Complete non-sequitur: Amazon will start to offer author’s blogs on its site, could it be a coincidence?)

Marketers and CFOs frequently ask about ROI, especially regarding newer technologies, and applications. Who can blame them? ROI is a way to seemingly mitigate the risk associated with the investment of newer products and services. Clearly the entire WOM industry (yes I know, some will argue that it has been around forever) suffers this today desired concrete proof. Direct, irrefutable, and consistent correlations between WOM and its impact are not always available today. But clearly that will change in the not so distant future.