MINISTERIO DE DESARROLLO ECONOMICO

The term viral marketing was originally mentioned in a PC User magazine article in 1989 (Kirby, 2006), but it did not become a powerful internet buzz word until nearly a decade later, in 1998 (Helm, 2000). Although the phenomenon has grown tremendously since then, different people still have various interpretations of the term. Kiss & Bichler (2008, 233) define viral marketing as “marketing techniques that use social networks to produce increases in brand awareness through self-replicating viral diffusion of messages, analogous to the spread of pathological and computer viruses”. In other words, a company uses consumer communication as means of multiplying a brand's popularity through customers spreading the message to their contacts (Hennig-Thurau et al. 2004).

Viral marketing takes advantage of the fact that people like to talk by giving them something to talk about. Kirby (2006) highlights the story telling aspect of viral marketing and suggests that viral marketing campaigns needs to generate conversation, not just spread the viral marketing agent. Ferguson (2008) agrees with Kirby by arguing that if viral content does not encourage customer identification or dialogue, it is simply a digital form of mass-marketing.

The dissemination of viral marketing messages can be either active or passive (Thomas, 2004). Although intentional, active promotion is a more common method, passive, unintentional promotion can work just as well, if not even better (De Bruyn & Lilien, 2008). The email service Hotmail, which was passively spread by its users, appears to be the most cited example of a successful viral marketing campaign in the literature (Jurvetson & Draper, 1997; Helm, 2000; Thomas, 2004; De Bruyn & Lilien, 2008). De Bruyn and Lilien (2008) explain that Hotmail users promoted the service every time they sent out an email because each email included a short promotional message that encouraged people to sign up for the free service. After its launch in July 1996, 12 million users signed up for Hotmail in the first two years (De Bruyn & Lilien).

Kirby (2006) suggests that consumers find viral marketing appealing due to its non- interruptive nature. After years of daily marketing bombardment, consumers have learned to tune out marketing messages, and in some cases, they are even utilizing ad- skipping technologies, such as pop-up blockers and personal video recorders. With consumers doing their best to avoid commercial messages, and with audiences drifting away from the mass media, marketers are finding it increasingly difficult to reach their target audience. Viral marketing can be a solution to this problem because it accepts the fact that consumers are in control and allows them to decide for themselves whether to promote, ignore or sabotage a campaign. (Kirby, 2006)

Videos have been an extremely popular tool in viral marketing campaigns (Ferguson, 2008), even to the extent that the term viral marketing is sometimes incorrectly used as a synonym for viral videos. Viral videos can spread very effectively, which is why they are one of the more popular tools used in viral marketing. A study conducted by Lightspeed Research (eMarketer, 2009a) found that 46 percent of users share videos with other users, with 50 percent informing their contacts about the video via email. All in all, viral marketing campaigns can include a broad range of activities and elements, such as images, quiz promotions, advergames, e-cards, interactive microsites, and Alternate Reality Games (Kirby, 2006). Ferguson (2008) also mentions influencer marketing and brand evangelism programs, community-building portals and street-level guerrilla campaigns in the context of viral marketing. Although it is also possible to conduct viral marketing in the mobile device environment, web-based viral marketing is the primary focus of this thesis.

In one of the earliest articles on viral marketing, Jurvetson and Draper (1997), the venture capitalists behind the viral success Hotmail, suggest that viral marketing does not require any marketing dollars. Today however, it is generally understood that although viral marketing can be done without expensive media buys, there are still costs related to the process. Armano (2009), an accomplished industry practitioner, points out that even though a company is not paying directly for a placement or making arrangements with a partner, it is paying for the time and the resources of the people

who are engaging with consumers and bloggers on the company's behalf. Although viral marketing has a reputation of being a low-cost tool, Kirby suggests that the amount of investment made in viral marketing generally reflects on the results.

There is some disagreement in the literature on whether viral marketing can include paid referrals. Helm (2000) suggests that affiliate marketing programs can also be considered as viral marketing, even though affiliate programs help companies acquire referrals by paying website owners for online advertising space. Helm's view could be explained by Thomas's (2004) explanation, that although affiliate programs offer financial rewards, some participants are more motivated by the opportunity to associate themselves with the brand. Porter and Golan (2006), on the other hand, explicitly describe viral marketing as 'unpaid peer-to-peer communication', which would then exclude such programs. Hogan et al. (2004) see referral reward programs and affiliate marketing as separate from viral marketing, probably for the same reason. Although affiliate marketing and search engine marketing are not viral marketing, companies often use them as additional ways of promoting, for example, a campaign microsite, in order to bring in more people who can then 'discover' the campaign and share it with their friends (Cruz & Fill, 2008).