Measured reach and impact of word-of-mouth marketing
gives marketers the metrics to define success.
People talk. Word spreads.
House Party research confirms the power of word-of-mouth marketing and the unique effectiveness of House Party programs. When a person hosts or attends a memorable party, they talk about it afterward with family, friends, neighbors and colleagues. And they communicate via a wide range of media from direct conversation to online communications.
House Party research also demonstrates that people who learn of a House Party through an initial (primary) passalong spread the word further through secondary and tertiary passalongs to their own social networks. Meanwhile, online messaging — through postings on blogs and sites like Facebook and MySpace — increase the spread of word-of-mouth still further.
While these extended passalongs often occur at lower rates than the initial (primary) passalong, their impact is exponential, so collectively they generally account for a major piece of each event’s total reach.
We’re counting.
To track the primary passalong rate for each promotion, House Party conducts extensive surveys with both hosts and guests, to determine how many people they directly told of the event, and how. These primary passalong rates are entered into a complex formula, including standard assumptions (based on industry research and conservative analysis of House Party data) to determine secondary and
tertiary passalongs.
Since House Party data shows that hosts tend to be more “viral” than their guests, we calculate extended passalongs using differing assumptions:
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Each primary host will tell 17 “new” people
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Each secondary host (person told by direct host passalong) will tell 5 “new” people
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Each primary guest will tell 10 “new” people
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Each secondary guest (person told by direct guest passalong) will tell 4 “new” people
Online messaging, for example.
To calculate the reach of online messaging, House Party uses conservative assumptions based on industry research. For instance, to calculate exposures based on mentions on Facebook pages, House Party uses host and guest surveys to determine the rate of mentions, then applies the following assumptions:
-
1 mention on Facebook = 5.25 exposures
Facebook users have an average of 105 online friends.
House Party assumes that of those 105 friends, only 20% will check the
poster’s page while the House Party-related content is there.
Of those (21), only 25% will actually read the House Party-related post,
resulting in 5.25 total exposures.
Similar calculations are used for MySpace and other popular sites to determine online exposure.
Typical party results.
The following calculations (drawn from a typical event) illustrate the word-of-mouth reach of a typical House Party:
number of parties = 2,000
attendance = 30,000 partygoers
(2,000 party hosts + 28,000 guests)
- Each host told 17 people, excluding guests about the party
(per survey results)
2,000 hosts x 17 = 34,000 direct host passalongs - Each direct host passalong tells 5 people about the party
(per standard assumption)
34,000 direct host passalongs x 5 = 170,000 secondary host passalongs - Each secondary host passalong tells 1.5 people about the party
(per standard assumption)
170,000 secondary host passalongs x 1.5 = 255,000 tertiary host passalongs
- Each guest told 10 people about the party
(per survey results)
28,000 guests x 10 = 280,000 direct guest passalongs - Each direct guest passalong tells 4 people about the party
280,000 direct guest passalongs x 4 = 1,120,000 secondary guest passalongs - Each secondary guest passalong tells 1 person about the party
1,120,000 secondary guest passalongs x 1 = 1,120,000 tertiary guest passalongs
total WOM passalongs (not including online) = 2,979,000
For more information on how House Party can help you business today, click here or email us at sponsorships@houseparty.com.
