AT&T quantifies role of WOM

Warc, 15 August 2014

DALLAS: Word of mouth is among the top two sales drivers for AT&T, explaining one out of every ten purchases that US shoppers make from the telecoms giant.

Greg Pharo, director/market research and analysis at AT&T Mobility – a unit of AT&T Inc. which provides wireless services to over 116m people – discussed this theme on a webinar held by The Keller Fay Group.

More specifically, he spoke about an in-depth study undertaken by the company into the sales impact of the brand-related conversations taking place between consumers, covering both the online and offline worlds.

"We saw that word of mouth explained over 10% of our sales volume through positive comments, and over 10% of the lost or unrealised sales volume due to negative comments," he said. (For more, including details of how the firm determined the role of WOM, read Warc's exclusive report: How AT&T quantified word of mouth.)

"In others words, we saw that it was one of the most compelling, one of the strongest, elements of our marketing mix."

Research firm Kantar Media has reported that AT&T was the third-biggest advertiser in the US in 2013, behind Procter & Gamble and General Motors, and spending just under $1.8bn on measured media during the year.

And the analysis conducted by Pharo's team suggested that such investments still wielded the greatest overall influence on sales.

"Now, paid media remains our number one sales driver: it contributes, for us, about 30% of our sales," he said.

"But, I'll tell you, word of mouth is a very close second: it is essentially paid media, and then earned media through word of mouth being our two big, impactful drivers of sales."

Increasingly, Pharo continued, these two areas are coming together as part of AT&T's ad strategy – as shown by the celebrated "It's Not Complicated" campaign, where a group of kids extol the virtues of the firm's network.

"One of the things that we have realised from this is that if we really want to maximise the impact of our advertising, we need to be able to make it buzz-worthy," he said.

"We need to be able to make it worthy of conversation."

Data sourced from Warc