Mass advertising is increasingly becoming a nuisance and evaporates often ineffectively. Who has a purchasing intention nowadays, believes more in what friends recommend. Pure subjective experience of an unknown third party enjoys more confidence than the expensive, glossy brochures of suppliers in the market. Companies better behave properly and treat their customers well, because in the Web 2.0 world, everything will be brought to light. Who messes something up will be mercilessly severely criticised online by disappointed consumers. Who, however, provides positive talk and encourages customers to be active participators is fit for the new marketing world.

The Internet is a formidable means of expression for consumer power. About 80 percent of all individuals fond of travelling for instance get informed before making a reservation on Internet assessment portals. Interested people get more and more often influenced by rankings and comments placed there. Where you get something for the cheapest price, what you absolutely must have, of what you should keep your fingers off, spreads on the net like a wildfire. Who has something to say, simply posts it on to the net. The community likes to listen and if it suits, passes on the information immediately. Today, we no longer depend solely on our customers to make a recommendation, but increasingly also look for a good assessment, word or review on the Internet.

Some vendors, however, still don’t have their opinions expressed online and so don’t even realize that often, potential customers are already lost before they make their first contact attempt. For example, only thirty percent of all hotel managers check on appropriate portals to find out more about the most recent reviews of their lodgings, on a regular basis. For many this is normally just too much work, according to an industry study by a market research institute.

Referrers are the best advertisers

Recommendations play an increasingly important role when it comes to purchasing decisions as personal advice from friends and colleagues exert a great influence on their product choice (37%). Others rely on test reports on the Internet. The impact of information and other forms of advertising is identifiable significantly lower. Brochure advertising affects only 17 percent of the consumers in their purchasing decision, TV and radio spots are even as low as eleven percent. This is a result of the online survey “opinion leaders” by the defacto research & consulting GmbH in cooperation with the Global Market Inside GmbH that has been carried out with online representatives. According to the study, consumers feel with traditional advertising increasingly overstrained. Three quarters of the respondents said that they would lose the overview by the growing flood of information. 25 percent even advocated the general reduction of advertising.

Brave New World Advertising

The revolution in advertising doesn’t take place in the media, but rather on the street and especially on the Internet. Social Networks, communities, RSS feeds, wikis, polls and postings in forums and blogs, online-based recommendation systems, link structures, and all the other applications that are often combined together under the term Web 2.0, have transformed the Web into a true playground for all possible kind of recommendation marketing.  Whether cars, doctors or financial advisers – today everything is subject to the sometimes merciless verdict of Internet users. Industry-specific rating portals spring up like mushrooms. So to no surprise, it is already possible to earn real money with recommendations via the Web. And there are lots of tools available on the Internet for monitoring opinions by word of mouth that systematically analyze consumer statements to brands and issues. Whoever operates active blog monitoring can find out for free and quite fast, a lot about new customer needs, emerging trends, the own market position, and the performance of the competitors. So, the good old word of mouth advertising has been quickly modernized. Words like advocating, viral marketing, buzz marketing, influencer marketing, street marketing, etc. make the topic suddenly trendy and modern communications technologies do it extremely fast. Mobile life blogging for instance allows reporting via cell phone in real time around the globe. New technologies enable any layman to send moving pictures live to the Internet. And the whole world is watching.

The end of the ‘Lords of Lies’

Trust in manufacturers and distributors decreases, instead the confidence in own networks is growing, whereby customers help the good companies and hurt the bad ones. And that spreads across the internet fast like a virus. Whose performances are unacceptable, who conceals, disguises, lies, cheats and hornswoggles his customers, has a real problem.
Unqualified product details, improper business practices and incompetent contact partners can’t be afforded by companies anymore, as these are often revealed online to the entire world in a highly subjective way. And the worst is that it is almost impossible to delete it as the Internet has the memory of an elephant. Even if not every entry is credible: digital vandalism and destructive negative comments, placed by competitors or cheap dummies, are estimated to be not higher than five percent.
Recognizable are those “trolls” usually in the low expression or absence of any constructive information and in case of self-praise due to the overly commercial presentation. Incidentally, good assessment portals filter unacceptable and abusive comments as well as contumeliousness attacks and marketing prose already in advance.

The customer as advertiser

Brands and new trends are nowadays not created with traditional advertising campaigns, but through the hive of self-organizing users. What they need? Good topics of conversation! Instead of customers that live and carry on the brand message, fans have to be won over.  In the future opinionated and well networked expert clients, the so-called "market mavens', will secure as signifier the reputation of a company. Their opinion influences the buying behavior of entire groups. They are the true “market leaders” - navigators in an increasingly complex business world.

The search for suitable “product champions” will play in the marketing of the future a much bigger role. Especially in terms of strategic considerations it is still too often overlooked that the most efficient drivers of growth are all those customers that are recommending company offers on a regular basis.

The customer as a cost-free sales person

Recommendation marketing is the second best way for gaining new customers. The first way, the traditional new customer acquisition, is becoming increasingly troublesome and winning customers over from the competition works almost exclusively on the price . Recommended business, however, is practically pre-sold already. As those who receive a recommendation tend to have a more positive perception, usually make faster decisions, and have a higher degree of loyal business behaviour - it leads quickly to new business recommendation. It is amazing how much energy some market participants are willing to invest in order to talk about and praise their favourite vendor. Therefore it is essential: if there is no recommendation anymore, there is soon no longer worth buying. Solely what the customers comment on the Internet or in the media about their products and offerings, services and brands, or have to say about their performance will decide on the weal and woe on the market. Better the company listens carefully what the customers have to say and encourages them to receive praise to make their new customer acquisition. Customers’ recommendations give market orientation and reduce in this way complexity, uncertainty and wrong decisions. These processes affect the entire marketing. Companies have to get used to the fact - whether they like it or not - that their customers take more and more matters like public relations, marketing and innovation processes into their own hands. That’s then called Consumer-to-Consumer Marketing (C to C) - and it is currently booming.

The Customer as Designer

Modern marketing is more and more evolving to interactive marketing. This is not primarily geared towards potential savings for companies, but much more useful and enjoyable for the customer. Progressive companies involve the consumer increasingly in all stages of the value chain and make him in this way an active and creative brand co-designer. Instead of lulling the customer unilaterally, companies start a relationship in which the customer has the say. They provide not only a 'kick in the head', but mainly a 'kick in the heart'. The chances are good that such emotionally attached customers become excited, active, and free-of- charge referrers that are willingly doing it on their own initiative.

The outsourcing of traditional company services to customers is possible in numerous variants: polls, ratings, prediction, discussion forums, and feedback systems on the Internet, ideas camps and innovation workshops, user groups and community platforms, corporate blogs, corporate wikis and so on and so forth. Each company can find through starting points, their own way to let customers decide where the company’s products for example are heading to in the future. Customers still have dormant creative potential which is so far least utilized. So if customers get actively involved in the innovation process, the company profits by getting better solutions. According to an internal IBM study from 2006, for instance, already 39 percent of all their ideas have been contributed by customers.

The useful co-design effect

Customers love and praise products more the more intense they are part of the development process. Market researchers know that effect for quite some time: if you show people that you are interested in their opinion, they usually change their stance on the company positively. The co-operative integration of the customer is in any case more promising than tediously removing barriers. Switching barriers are directed against the customer, they are aggressive and ultimately counter-productive. The resounding success of the participatory and dialogue-oriented Web 2.0 world, however, shows that cooperation works better than confrontation. Who, as a customer, is actively involved in the product and service development and in shaping marketing processes, is attached to his supplier and will follow him. A customer will be loyal to his' company and “his” contacts person and highly recommend both of them. And isn’t it the best prevention against customer losses, too?

By Daniela La Marca