1. Return on Influence
From Buzz to Buy
Ed Keller Rachel Swanson
CEO Associate Director
Keller Fay Group Consumer Insights
Condé Nast

2. Background
• Marketers are increasingly turning to “word of
mouth marketing” as a strategy to grow brands
– The meteoric rise of social media has propelled an interest
that was already strong
• With rising interest in word of mouth comes new
questions
– WOM matters, but is there a proven link to sales?
– What is the role of media in stimulating word of mouth?
• Traditional media as well as social media
– What is the role of, and the true value of, influencers?

3. Two Starting Points for Our Investigation
1. The Role of Advertising in Word of Mouth
• About 20% of word of mouth is stimulated by
advertising
– About 700 million ad-influenced word of mouth
impressions for brands each day in America
• The effectiveness of word of mouth is
substantially increased when stimulated,
encouraged, and/or supported by advertising
– The presence of advertising in word of mouth
conversation increases the probability by ~ 20% that a
consumer will make a strong recommendation to buy or
try a product
Source: Keller Fay article in Journal of Advertising Research (June ’09):

4. Two Starting Points for Our Investigation
2. The Value of Influencers
• The “reach effect”
– Their word of mouth is 2x – 8x vs. the average
– Makes marketing more efficient, effective
• The “acceleration effect”
– They accelerate product adoption, thereby improving
profitability
• The “amplification effect”
– Advertising messages go further via word of mouth
– Certain media have advantages in reaching influencers
Source: Keller Fay’s TalkTrack®

5. Condé Nast Wanted Answers
to the Following Questions
• How – and how much – does WOM inform
consumer choice?
• What role does media play in stimulating WOM?
• What is the true value of WOM? Can it be
calculated?

6. Investment
Return On Influence

7. Methodology: Multiple Data Sources
• Online survey of women magazine readers
– N=1,026 women 25-49, HHI $50,000+
– Screened for readership of at least one of 19 magazines (see next page)
• Unique methodology to interview 230 “peers” of magazine readers
– Friends/family/colleagues with whom members of primary sample had recent word of
mouth conversations
– Email addresses provided by respondents and automatically contacted via email by
Keller Fay for online interview
– “Closes the word of mouth circle” re WOM impact (including sales)
• Nationally representative sample of women ages 25-49, HHI $50k+
– N=4,640
– Drawn from Keller Fay’s TalkTrack®, serves as benchmark group
• Academic consultant: Dr. Barak Libai
– Specializes in economic valuation of consumer social interactions
– Associate Professor of Marketing, Tel Aviv University

8. Methodology
National Primary Sample (Magazine Readers)

9. Female Magazine Readers More
Up-to-Date on New Trends
% of Magazine Readers vs. Total Women Who Closely Follow
Each Category for “What’s New”*
Total Women Magazine Readers Pts. Difference
60%
Household Products
39%
21
60%
Personal Care & Beauty
43% 17
49%
The Home
34% 15
49%
Shopping, Retail & Apparel
42% 7
56%
Food & Dining
51% 5
43%
Children's Products
38% 5
Base: Respondents from TalkTrack®, July 2008 – June 2009, Total Public Females ages 25-49 with
HHI $50K +, n=4,640; Total Panel Sample (Women’s Magazine Readers), n=1,026
*Magazine readers and total public all female aged 25-49 with household income of $50K+

10. Female Magazine Readers:
Give More WOM Advice
% of Magazine Readers vs. Total Women Who Give Advice
in Each Category*
Total Women Magazine Readers Pts. Difference
49%
Household Products
30%
19
49%
Personal Care & Beauty
32% 17
34%
The Home
23% 11
41%
Shopping, Retail & Apparel
32% 9
53%
Food & Dining
47% 6
38%
Children's Products
32% 6
Base: Respondents from TalkTrack®, July 2008 – June 2009, Total Public Females ages 25-49 with
HHI $50K +, n=4,640; Total Panel Sample (Women’s Magazine Readers), n=1,026
*Magazine readers and total public all female aged 25-49 with household income of $50K+

11. Magazines Inform WOM and Are
Important Part of Brand Conversation
Information Mentioned in
Sources Conversations
TV ads 25% 9%
Magazine ads 22% 6%
Online ads 16% 6%
Newspaper ads 12% 5%
Social Media 9% 3%
Direct mail 7% 3%
Direct email/text 6% 2%
Radio ads 4% 1%
Base: Total Panel Sample (Women’s Magazine Readers), n=1,026
*Magazine readers and total public all female aged 25-49 with household income of $50K+

12. Magazine Readers Have Larger Social
Networks
Number of People Communicate with Fairly Often
25
1/3 23.8
more people
18.3
9.6
20
15
6.7
6.0
4.8
10
Aquaintances
Close Friends
8.2
5
6.8 Family
0
Total Women Magazine Readers
Base: Respondents from TalkTrack®, July 2008 – June 2009, Total Public Females ages 25-49 with
HHI $50K +, n=4,640; Total Panel Sample (Women’s Magazine Readers), n=1,026
*Magazine readers and total public all female aged 25-49 with household income of $50K+

13. Magazines Are an Influencer-Rich
Influencers Are Key to WOM
Audience
ENGAGED •Diverse interests
“Influencers”
TRENDSETTING •Early adopters Yet they account
comprise only
for 25% of all
10% of the U.S.
CONNECTED •Large social networks WOM
population
IMPACTFUL •Trusted source of information
Source: TalkTrack®, July 2008 – June 2009, Total US Population 13-69

14. Influencers: Frequent Magazine Readers
Influencers are more frequent readers of magazines of all types.
Total Public Influencers
60%
53%
50%
40%
40% 25% 38%
31% 31%
30%
27% 18% 19%
26% 25% 25%
2-4 Days 12%
13%
a Week 19%
20% 14% 12% 10%
14%
28% 9%
5- 7 Days 10%
18% 20% 21% 19%
a Week 13% 14% 15%
10% 11%
0%
News/Business/ Women’s Lifestyles Sports Men’s
Politics Interests & Celebrity Interests
Base: Respondents (Total, n=1,920; Influencers, n=323)
Source: TalkTrack®, October 30th to November 19th

15. Women’s Magazines Deliver 50% More
“Influential Consumers” than the Norm
% Qualifying as Influencers
20%
15%
18%
10%
5% 12%
0%
Total Women Women's Magazine Readers
(Females 25-49 HHI $50K+) (Females 25-49 HHI $50K+)
Base: TalkTrack®, July 2008 – June 2009, Total Public Females ages 25-49 with HHI $50K+, n=4,640;
Custom Study, Total Panel Sample (Women’s Magazine Readers), n=1,026

16. Influential Readers Talk More
50% more conversations
about products every week than
the average magazine reader

17. …With Far More People
Discussed products Discussed products
with 22 People with 33 People
All Magazine Readers Influential Magazine Readers

18. Influencers Are First to Buy
62% more likely
than the average magazine
reader to be the first to buy
new products and services

19. How Much Does this
Influential Magazine
Reader Impact the
Bottom Line?
© 2009 Keller Fay Group

20. Calculating the Economic Value of WOM
Economic value of influencers stems from the following
A. Probability of person to be affected by magazines
(Reliance on Magazines)
B. Number of conversations they have about products
(Volume of Conversation)
C. Persuasiveness of readers word of mouth (Credibility & Persuasiveness)
D. Expected profitability of their friends (Profitability)
Reliance on Volume of Credibility & Profitability
Magazines Conversation Persuasiveness

21. Influential Magazine Readers Deliver
More $$’s to the Bottom Line
Reliance on Volume of Credibility & Profitability
Magazines Conversation Persuasiveness
3.8X
more value to marketers
vs. all magazine readers

22. How Does That Translate
to the Bottom Line?
Average
Magazine
Reader
Influential
Magazine
Reader

23. What Drives the Increased WOM Value?
Interviews of “peers” was key to providing first-ever measures of persuasiveness and peer profits.
3.9
Conversations about …
1.8
1.3 1.4 1.2
Consumer Technology
WOM Value
4.1
2.4
1.6
1.1 0.9
Personal Care & Beauty
WOM Value
3.2
1.8
1.3 1.3 1.1
Apparel & Accessories
WOM Value

24. Conclusions
• Word of mouth matters
– Peers report making purchases that are largely tied to the
persuasiveness and credibility of WOM information
• Magazines reach the influencers who drive WOM
– Magazines that have the most influencers deliver the most social
value to advertisers
– Magazines are a key source of the information shared in WOM
• The value of WOM is measureable, and substantial
– A marketing strategy that targets influencers will yield ROI

25. Thank You!
Ed Keller
ekeller@kellerfay.com
Rachel Swanson
Rachel_Swanson@condenast.com