Posted by Amanda Chapel
CHICAGO – Ketchum, an Omnicom Group company and one of the world's largest PR agencies, announced this week that they’ve launched the Zócalo Group. Derriving its name from the central town square typicaly found in Mexican cities, this is the Omnicom Group’s first agency dedicated solely to word-of-mouth marketplace manipulation.
According to their website, Zócalo Group "is powered by the proprietary ZócaloNet system, a fully integrated technology suite that provides a 360º view of a company’s or brand’s influencers, evangelists and detractors." Ketchum claims that their system is: "the industry’s most advanced influencer profiling, data mining, predictive modeling and campaign management system. ZócaloNet screens, targets and manages category-specific peer influencers on a local, regional and national level."
The new company is led by Paul Rand, formerly Ketchum’s chief development and innovation officer. Rand is a member of the Word of Mouth Marketing Association’s (WOMMA) executive board and has been actively involved in legitimizing word of mouth marketing as a strategic communications medium.
Rand said, “Where traditional word of mouth has been focused on buzz, we’ve created proprietary methodologies that help companies and organizations identify and build connections and drive word of mouth.”
Ray Kotcher, Ketchum's CEO added: “The Zócalo Group offers yet another targeted approach to help our clients reach and motivate audiences.”
1. Word-of-Mouth Marketing (WOMM) is a term used to describe activities that marketing companies undertake to generate personal recommendations, as well as referrals for brand names, products and services. Research indicates that individuals are more prone to be fooled by WOMM than more transparent forms of promotion.
2. To "manipulate" is "to influence or manage shrewdly or deviously": He manipulated public opinion in his favor.
3. Last December, The Federal Trade Commission said that companies engaging in word-of-mouth marketing, in which people are compensated to promote products to their peers, must disclose those relationships. This was the first time the agency gave an opinion on the practice. Though no accurate figures exist on how much money advertisers spend on this type of marketing, it is quickly becoming an accepted method for reaching consumers who are skeptical of other forms of advertising. As the practice has taken hold over the past several years, however, some advocacy groups have questioned whether marketers are using such tactics to dupe consumers into believing they are getting unbiased information. The FTC said it would investigate cases where there is a relationship between the endorser of a product and the seller that is not disclosed and could affect the endorsement. The FTC staff said it would go after violators on a case-by-case basis. Consequences could include a cease-and-desist order, as well as fines and civil penalties ranging from thousands of dollars to millions of dollars. Though the staff's opinion fell short of taking specific action against WOMMarketers, the group's executive director, Gary Ruskin, said he was pleased the staff agreed that word-of-mouth marketing could be very deceptive.
So why do you think Kotcher launched a separate company rather than just a practice within Ketchum? Hmmmmm.
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You ask a great question and I have an answer (not THE answer but my pov). PR agencies are all about campaign work. It comes and it goes. It is less about building ongoing relationships with enthusiasts. You will see this distinction well articulated in Jackie Huba's work on Citizen Marketing.
Paul's venture allows him to step outside that approach and build a practice around creating sustainable word of mouth for clients.
Plain and simple - it might be harder to do it inside a PR agency and have to re-program staff away from the pure camapign approach.
(Disclosure: I also serve on the WOMMA board with Paul although that is pretty new for me)
No matter how you position it, surreptitious selling is NOT good. I am even more uncomfortable when you use loosely connected freelance marketing insurgents to do it.
Also, on a fundamental level, a "proprietary system" that skews the marketplace is BAD! We as a society are VERY leery of data mining used to manipulate.
Bottom line: Kotcher launched it as a separate company just in case this stuff continues to get a lot of bad press and/or the FTC makes it illegal altogether.
It's probably a separate company because Rand fed management a line of bullshit so he can run his own operation. If it fails, they can blame it on him and make it all go away.
I am waging fierce blogocombat against WOMMA and PayPerPost and all other blog whoring with incentivized opinion spouting for commercial motive oysterings.