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E Commerce Trends: Viral Marketing Essay

740 words - 3 pages

E-Commerce Trends: Viral Marketing

For years businesses have understood the power of word-of-mouth advertising; both positive and negative. Enough negative comments spread by unhappy customers can have a devastating impact, and it is obviously desirable to have people spreading the word about the positive attributes of a business's product or service. Yet until recently, although companies certainly have paid attention to popular buzz, marketing campaigns have not been planned based mostly, or entirely, on getting people to "spread the word." E-commerce has changed this. A form of word-of-mouth marketing known as viral marketing has proven to be an effective strategy in electronic commerce. The term "viral marketing" describes any tactic designed to encourage people to pass the word in ever-widening circles. This paper will explore this trend through the @ of an internet article entitled "The Six Simple Principles of Viral Marketing" (Wilson, 2000); and a look at how these principles were applied in a successful viral marketing plan by Hotmail.com.
The Six Principles
The six principles as outlined by Wilson (2001) are: "1) gives away products or services, 2) provides for effortless transfer, 3) scales easily from small to large, 4) exploits common motivations and behaviors, 5) utilizes existing communication networks and 6) takes advantage of others' resources." Hotmail.com utilized all of these and managed to establish itself as the largest independent e-mail provider on the Internet. One wondering what the point is may consider the large (seemingly unending) number of advertisements seen at the Hotmail.com website. The value of ad space grows with each new e-mail account Hotmail.com provides. As stated by Perreault and McCarthy (1999), "advertisers are primarily interested in placing ads on web sites that will give their ads a lot of exposure" (p.454).
Give Aways, Effortless Transfers and Common Motivations
The basic concept behind viral marketing as applied on the Internet is geometric progression; similar to old-fashioned chain mail letters. Hotmail.com accomplished this by applying Wilson's first principle: give something away. They offered free e-mail accounts and included a simple tag on the bottom of all e-mails informing recipients that they too could receive a free e-mail account. They also incorporated Wilson's second principle; provide for...

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