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Viral marketing gets contagious

Chicago Sun-Times
Spreading the word electronically
by Kate Fitzgerald
February 12, 2001

When Ted Widen decided two years ago to start an Internet-based entertainment guide, www.Chicago-Scene.com, he knew his idea was sound. But he didn't have enough money to promote it, so he decided to try "viral marketing," spreading product- and service-related news spontaneously and rapidly from person to person to increase sales without spending a cent.

Mr. Widen had spotted a niche for his newsletter: He believed that young adults wanted news of restaurant and nightclub openings, parties and charity events beyond those listed in existing magazines.

"I saw people looking for something more immediate, and the Internet was a great way to publish this information. So I pulled together a simple, straightforward list of excellent events and sent it to 200 random e-mail addresses," Mr. Widen says.

Thanks to viral marketing, interest in Chicago-Scene.com became contagious. People sent copies of the newsletter to friends and asked Mr. Widen to add friends to his distribution list.

Today, he e-mails his newsletter to 18,000 addresses, and his list is growing by 150 names per day, all without benefit of any advertising.

Chicago-Scene.com's primary source of revenue is rental of its e-mail list to marketers and fund-raisers seeking affluent, entertainment-minded adults. The list can be sorted by age, income or neighborhood, and the cost is 25 cents per name. He also occasionally runs brief ads in the newsletter.

To tap into another revenue channel, Chicago-Scene.com hosts parties sponsored by liquor and apparel marketers. Its New Year's Eve 2000 party at the Drake Hotel was a sellout with 1,500 attendees, who paid $125 each.

Mr. Widen began the electronic newsletter as a sideline, keeping his full-time job as a Web site designer until last year. His operation now has three full-time employees and several part-time workers. Although he will not disclose revenues, he says "business is very good."

Several other local small businesses with tiny marketing budgets have caught the viral marketing bug, recording major successes using creativity instead of capital. The idea isn't new, but the Internet has given it new appeal by accelerating the spread of information beyond what traditional media can do. On the Web, messages can zip instantly nationwide, and recipients multiply at the click of a mouse.

Proponents acknowledge that success may be part luck, part art and part science, but they agree that small businesses can do some things to spread information about a potentially profitable product or service.

"The key to viral marketing is having a truly compelling product or service so that people can't resist passing (the news) onto their friends and colleagues," says Minerva Hobbs, director of mobile and wireless solutions for Answerthink, a consulting firm with offices in New York and Chicago. "Person-to-person marketing is far more powerful than traditional advertising or direct mail."

Another key is to create the right conditions for spreading the virus. Ms. Hobbs says small businesses can do that by giving free samples of products, providing free training and support materials and ensuring outstanding customer service.

"The goal is to get a small group of people talking about your product, then to send them out into the world to spread the word for you," Ms. Hobbs says. "But you have to enable them by supporting your idea with excellent information and making it easy for the idea to spread."