Consumers and marketers alike are learning how to navigate the blogosphere. As a relatively new medium, blogs are enabling corporations to devise new ways of marketing products. The newness of blogs is also enabling companies to circumvent conventional marketing ethics to promote products. Blogola is a primary example of this, as influential bloggers are being compensated to review new products.

Nikon is using blogola to promote its D80 camera. The company’s blogger outreach strategy is to loan D80 camera (valued at $1000 and up) to leading bloggers in hopes of getting strong reviews that will help the camera sell to amateur photographers. As with payola in the recording industry, blogola smells like bribery. While Nikon is loaning their cameras to bloggers who participate in the program, the bloggers are given an opportunity to later purchase the camera at a reduced price (a major perk by any photographer’s standards).

Naked Conversations discusses the FUD Barrier. According to Scoble and Israel, FUD stands for fear, uncertainty, and doubt. The authors explain that companies have historically used FUD tactics to demote competing products and persuade consumers to purchase their product. Today, the authors write, FUD is used to sway corporations against blogging.

The first FUD barrier for blogging that Scoble and Israel discuss is negative comments. Having unflattering reviews posted on a message board for current and potential customers to see is deemed unhealthy for business. Conversely, blogs are said to give companies a false sense of the conversation surrounding a product. The authors quote Mike Torres of Microsoft with saying; “People are a lot more polite when they know you are listening.”

Torres’s sentiment explains why blogola doesn’t work. When companies agree to compensate bloggers for writing about their product, the blogger’s perspective is softened. Jack Jaffe’s April 29th blog post entitled D80 Blogger Outreach Rocks is laced with praises for Nikon:

“I have to tell you that in my humble opinion, this has been the best example of blogger outreach I have either experienced (first hand) or read about.”

Jaffe’s May 25th blog post Thank you Nikon! is laudatory as well:

“I just wanted to thank Nikon for selecting me to participate in their blogger outreach program. With photographs like this (which I would never have had before), I now have loyalty to a brand which quite frankly I had never considered before.”

Now, I admit that the picture Jaffe is referring to is clear, but it’s hard to not wonder whether Jaffe or any other bloggers selected for this campaign have overlooked problem areas of the camera because they are getting clear pictures. Moreover, I wonder whether these influential bloggers are experienced enough to give a complete review of a high-grade digital camera. While the D80 is built for amateurs, digital photography is a very detailed medium and the most involved enthusiasts will want to do more with their cameras than take pictures that can be uploaded to flickr.

While the ethics are questionable, I’ll also admit that Nikon’s D80 blogger outreach is a smart strategy for controlling the blogosphere. Nikon has opened the door to both positive and negative reviews, but by giving noteworthy bloggers a noteworthy product, Nikon is minimizing its chances of being criticized in consumer-generated media.

The effect of marketing plans and new product incentives pale in comparison to the opinion of a trusted friend, relative, or colleague. According to Fred Reichheld’s Ultimate Question, positive word of mouth is key for driving good profits, while negative referrals cast doubt on a company’s integrity. Reichheld’s Net Promoter Score (NPS) helps companies ask customers whether or not services rendered are worthy of word of mouth promotion.

The NPS framework characterizes customers as a promoter, passive, or detractor. Promoters have the highest repurchase and customer loyalty rates of the three groups. Passives follow promoters with lower repurchase rates and excitement about the product. Detractors create negative publicity for a company because they’ve experienced poor customer service and want to warn others about the company’s practices.

On the NPS referral scale, promoters are “extremely likely” (9-10) to recommend service to someone else. Detractors dominate the scale (0-6) as “not at all likely” to recommend a company’s service to another person. However, both groups are able to generate equal amounts of word of mouth about the service received. Reichheld fails to give a good description about purchasing behaviors of passive customers. From the explanation given, I get the impression that passive customers have experienced good and bad service, but they still support the company. Passive customers aren’t exactly in the middle of the NPS scale (7-8), but they’re in a position where they can become either strong promoters or detractors.

The NPS framework can extend to social services as well. In health education, positive word of mouth is your profit. Health educators want to deliver a quality program to community members, so that people not only return, but also bring other community members along.

I held an emergency preparedness training this morning and spoke with three participants who’ve been enjoying the program, but recently had a bad experience with an instructor. One student began the conversation positively by saying “Candice, thank ‘Bob’ for teaching Monday’s course for us.” Another student chimed in with negative comments about Bob’s teaching style. This sparked negative comments from a third person. By the end of the conversation, all three participants were complaining.

This experience made me think about the power detractors have in influencing peers to defect. I consider the participant who wanted me to thank Bob as a passive participant – he had some reservations, but was willing to overlook them due to his overall good experience in the program. Had detractors not been present, I wonder if he would have continued to give Bob accolades.

Consumers are greatly influenced by word-of-mouth referrals. It’s harder to convert a detractor into a promoter. After determining NPS, business leaders should take steps to identify passive customers before they fall into the clutches of detractors. Leaders should work to understand needs and preferences of passive customers to create a better product that turns them into loyal promoters.