Friday, July 20, 2007

The correlation between Consumer Generated Media and Sales

As the democratisation of consumer expression leads to a viral proliferation of information online, the newage communication ecosystem has prompted the need for a careful evaluation of the potential of CGM or buzz as it is called. With each passing day, consumers find innovative ways to express their satisfaction/dissatisfaction about a product or brand.

An investigation of the relationship between blog buzz, market promotion and sales in the Consumer Packaged Goods(CPG) industry, by Nielsen Buzzmatrix revealed the following-

1.CGM has the potential to influence and generate incremental publicity for products, enough to effect their commercial prospects, specially in the CPG category.

2.CPG Marketers should consider the role of Buzz in their Marketing Mix, with respect to New product communication plans.

3.Ad spend is a large factor involved in generating CPG buzz.

4.There is a strong correlation between buzz and sales.

5.Buzz helps in generating accurate forecasts.

6.Buzz Magnitude: Top 10 % of products were responsible for over 85% of total buzz generated. Buzz is higher

7.Buzz Timing: Buzz usually precedes product launch and sales and is usually highest in the initial stages

As the above reiterates the prime motivational factor for consumers to create and post CGM-To be on the forefront of something new, it is profoundly clear that CGM will need to be an intrinsic component of the new product communication plans for marketers.

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