While I have no evidence to argue against this other than the myriad personal anecdotes from teens in the comments of the media coverage (I tweet therefore we tweet!) and the content in the stream of the popular trending  “Teens Don’t Tweet” topic on Twitter, I do have a question about the stats Nielsen provided.

As Nielsen puts it, “…only 16 percent of Twitter.com website users were under the age of 25. Bear in mind persons under 25 make up nearly one quarter of the active US Internet universe, which means that Twitter.com effectively under-indexes on the youth market by 36 percent.”

Fine, but check out the age breakdown in the graph.  You’ve got 55+ (avg US life expectancy is about 75, so we’ll go with that), 25-54, and 2-25.  That gives us ranges of 21 years, 29 years, and 23 years, respectively.

However, you have to be 13 to join Twitter, so that cuts the youngest demographic in half, making those ranges 21 years, 29 years, and 13 years.

This seems heavily skewed in favor of the older demographics and of course a demo segment would under index when half the audience are literally not legally allowed to use the service, right?  But I welcome more savvy statistics people to show me the light.

Regardless, it wasn’t the teens under indexing bit that caught me off guard the most.  No, what gets me is that 20% of the Twitter audience is 55+.  Tweetup at The Villages, tonight!

Total spending on WoM marketing is expected to increase 10.2% to $1.70 billion in 2009 and grow at a CAGR of 14.5% during the 2008-2013 period, reaching $3.04 billion as more brands include WoM in their media mix and ROI metrics improve.

Other Key Highlights:

• “Spending on U.S. word-of-mouth (WoM) marketing increased 14.2% to $1.54 billion in 2008, as brands recognized the need to get involved in consumer and business conversations and allocate resources to WoM. Spending increased at a compound annual growth rate (CAGR) of 37.6% from 2003 to 2008. “

• “Spending on WoM content and services increased 13.0% to $1.26 billion in 2008, as major marketers integrated WoM into the media mix and shifted to specialized WoM firms that help drive long-term campaigns. Spending rose at a 37.3% CAGR of 37.3% from 2003 to 2008. “

• “Spending on WoM ancillary products increased 19.7% to $286 million in 2008, due to growing demand for return-on-investment (ROI) data and the impact of WoM campaigns on consumer purchasing behavior. Growth can also be attributed to the increasing sophistication of WoM tools that are being used to monitor online and offline conversations. Spending grew at a CAGR of 39.1% from 2003 to 2008. “

Who’s Investing in WOM?

According to the study, consumer product goods (CPGs) companies are the major adopters of WoM, accounting for 17.4% of spending in 2008. Other top categories include food & drink, finance & business-to-business services, electronics & telecommunications, and retail (they note that auto & transportation would have been in the top five if not for their industry’s recent financial woes and cuts in spending).

Shift in Consumer Behavior

Not really a surprise here, but the study notes/validates that consumers are abandoning traditional and ad-supported media, migrating to digital and consumer-supported media.

For more information (or to purchase the report), click here.

The ANA (Association of National Advertisers) recently released a study showing the future shifts in different marketing initiatives with reduction in:

• Media budgets (56 percent)
• Production budgets (50 percent)
• Sponsorship/events activities (41 percent)

The activities most likely to be maintained throughout the recession include:

• Research and development (47 percent)
• Public relations (42 percent)
• Innovation/test/learn budgets (33 percent)
• Promotion activities (33 percent)

The activities most likely to be increased in the current economic environment are:

• Pricing deals (47 percent)
• Social networking and word of mouth activities (26 percent)
• Public relations efforts (23 percent)

These increased activities reflect the real need and understanding from marketers that brand equity comes from emphasis on consumer relationship building. Of course the actual product is the main item for brand equity (89 percent) but customer service (86 percent) and employee advocacy (81 percent) are just as critical. Customer service is where consumers turn to get straight away answers and know that there is always a tangible representative available on hand when questions and problems arise. Give them the assurance that they will get a response, coupled with strong employee advocacy, and will have a brand that will last even through the rough times.

With this realization, customer-related metrics is also being deemed more important with increased attention on:

• Customer conversion/repeat rates (78 percent, as compared to 70 percent in February 2007)
• The percentage of customers who rate a brand as “excellent” (77 percent, as compared to 68 percent in February 2007)
• Net Promoter Scores (73 percent as compared to 67 percent in February 2007)

Sure, this recession has got us thinking of happier times but there’s a light at the end of the tunnel and it’s looking good for us word of mouth marketers. Feel free to share your thoughts in the comments or tweet me about happy thoughts @Su_Lee.

Marketing channels, such as Word of Mouth Marketing and Online Marketing, are expected to grow to an astounding 27% of overall marketing expenditures by 2012, up from 7% in 2002, according to a new research study recently released by IBM Institute for Business Value titled “Beyond Advertising: Choosing a Strategic Path to the Digital Consumer”.

The findings prove the changed landscape of the advertising marketplace and the necessity for companies to adapt in order to compete. The report reveals that companies are shifting spending away from traditional advertising in favor of more interactive and measurable ways of reaching consumers.

The study cites the four major trends that are emerging:

• Influence of the Digital Savvy Consumer – Today’s consumer is more more digitally savvy and wants to be engaged online. This year, 76 percent indicated they had already watched video on their computers (up 27 percent). Thirty-two percent indicated they had viewed video on a portable device or mobile phone (up 45 percent). And interest in mobile video content has more than doubled in a year, to 55 percent.
• A shift in advertiser spending – Advertisers are responding to this new breed of digital savvy consumer. Results show that Sixty-three percent of global CMO’s expect to increase online/interactive marketing spends while 65 percent expect to decrease traditional advertising.
• Digital migration of platforms – The emergence of digital forums such as social media and online video are blurring the lines between advertising and marketing in a move to what the study calls “brands-actional” advertising.
• Emergence of new capabilities –“Moves, by both new entrants and existing players, are driving new types of industry innovation, and accelerating the pace of change.”

“To succeed – especially in the current economic environment – media companies will need to develop a new set of capabilities to support the industry’s evolving demands, which include micro targeting, real-time ROI measurement and cross-platform integration,” says Saul Berman, IBM Global Leader for Strategy and Change Consulting Services and co-author of the study.

The main issue I hold with this discussion is the misconception of what a conversation is.  A conversation by definition is an exchange of information.  If there’s no exchange, it isn’t a conversation.  If a TV ad tells me to buy a car, I didn’t have a conversation with that ad.  The ad spoke at me and i probably didn’t listen because I’m not in the market to buy a car.  Referring to a brand whose strategy includes broadcasting marketing messages through social media channels as a brand attempting to ‘join the conversation’ seems inaccurate.  It isn’t a conversation at all.  I might follow @reuters on Twitter.  The account “tweets” Reuters stories.  It doesn’t follow, it doesn’t respond.  This isn’t a conversation between me and Reuters, and I don’t think that just because it’s on Twitter, a social networking service,  makes it any more of an attempt at a conversation.

I don’t necessarily believe you can equate an offline conversation to an online conversation, either.  An offline conversation is generally one to one or one to a few.  Online conversations are often defined as one-to-many but that isn’t exactly accurate either, it implies broadcasting from one person to many people.  The unique aspect of an online conversation is that it is possible to have a one-on-one conversation that is then seen and read by many.

This doesn’t dilute the value of a one-on-one conversation, it just make it public.  This is a huge opportunity for a brand as it allows the success of a meaningful one-on-one conversation to potentially influence the majority who are just listening.

Take, for example, a presidential candidate who travels to small town Iowa to have dinner with a family of four.  It seems like that candidate’s time could be better spent holding a rally with far more people, but then the media picks it up and now millions of people hear about how a candidate took time out of their busy campaign to sit down and have dinner with 4 people in rural Iowa.  They must care!  It’s a similar strategy.

Which brings me to my next point, social media is a stage.  People create and critique as a form of expression and to be seen and heard.  A recent eMarketer study shows that 85% of social media users think companies should interact with their consumers through social media.  Users want to know that brands are hearing what they have to say.  They don’t necessarily need a brand to interact with them specifically, but they want to know they are there and interacting with others.  Conversing with just one customer can show countless others that a brand is listening.

And it is listening that seems to be lost in this mix.   One of the most important traits of a good conversationalist is the ability to listen.  How can you exchange information if one or both of the participants are not listening?  It doesn’t work and that’s not a conversation.  What’s great about social media is a brand has the ability to listen in on all kinds of conversations.  Listen for questions, calls for help, complaints on forums, social networks and blogs.  Customers aren’t afraid to voice their opinions.  Identify who’s talking about you, where they’re at, and what they’re talking about.  Then get in there and exchange some information.  Continue your approach in an organized way, be responsive, be transparent, and most importantly LISTEN.  Remember that a conversation is an exchange.