Undercover Marketing

Explore the Strategy of Undercover Marketing

Undercover marketing

At a private party in 2009 for a large group of Philadelphia's most socially active 20-somethings, a man named Tommy Upgrove spent the night pouring shots of vodka for his guests.

Upgrove was the owner of 32 Degrees Luxe Lounge, a popular nightclub that catered to a demographic of young, professional people with large social networks and plenty of disposable income. The vodka Upgrove poured was called Turi Vodka -- more specifically, the only thing Upgrove poured that night was Turi Vodka. His guests were unaware that Tommy Upgrove wasn't just a nightclub owner, but also an undercover marketer for the evening.

Bacardi hired a marketing agency called SoulKool to generate buzz about Turi, a brand they had imported from Estonia. Hoping to make Turi stand out in the very crowded field of vodka brands, SoulKool hired Tommy Upgrove to act as an undercover marketing agent to introduce Bacardi's target demographic to the product in a way that would get them to talk about it and even recommend it to their friends.

Upgrove didn't promote Turi in any overt way. He didn't talk it up, he didn't offer a special deal with it, and he didn't call attention to the logo on the bottle. The only thing Upgrove did to bring Turi to market was make it available to the right people in the right place. Best of all, none of those people knew they were seeing an advertisement, so they never felt pressured to adopt an opinion about it.

What is Undercover Marketing?

Undercover marketing strategies involve introducing a product to consumers in a way that does not seem like advertising. It is a strategy within the broader technique of stealth marketing, where agents pose as regular people and show products to others who are unaware of the marketing push. (See also Stealth Marketing)

It is common for companies to employ people in positions of power or respect in their undercover campaigns. For example, the Turi vodka campaign hired a highly-regarded nightclub owner to feature Turi at his private party, drawing an association between the product and the host's popularity. Turi could have also been marketed by hiring an actor to visit bars, order Turi, and recommend it to other patrons.

The Internet has created a number of additional undercover marketing opportunities. It is common for companies to pay others to create positive reviews of products in blogs, forums, video-sharing websites, and in the comments section of online retailers.

The Virtual World, Naturally

Undercover marketers who use Internet platforms are taking advantage of a rich, growing field. If an undercover blogger, Twitter handle, Facebook page, or video-maker can catch an Internet audience's attention, it can mean big business.

Percentage of companies that get new customers from these online platforms

  • Twitter: 42%
  • Blogs: 57%
  • Facebook: 67%

Source: Chadwick Martin Bailey and iModerate Research Technologies

Companies hope to generate buzz for products in a way that is not overly obvious. While some people have become resistent to traditional advertising techniques over the years, they still greatly trust word-of-mouth and recommendations from friends.

Who Uses Undercover Marketing?

The two greatest advantages of undercover marketing are its low cost and its ability to generate word-of-mouth recommendations. This makes it ideal for small companies with limited advertising budgets, as well as large companies that want to generate buzz for a product ahead of a more traditional marketing campaign.

If, for example, a new, independently owned bike shop wanted to create a viral word-of-mouth effect in its city, the shop could employ a few bike enthusiasts to visit bike-related websites and go to biking community events to talk about the shop in a positive but organic way. Rather than blatantly advertising the shop, the bike enthusiasts will raise awareness about it through casual conversation with the shop's target demographic.

A larger company with greater advertising resources could enact a more sophisticated or complicated undercover marketing campaign. A major shoe company might hire a few professional basketball players to wear a newly designed pair of sneakers in public for several weeks before the company begins advertising the design. This would raise the new design's visibility ahead of the advertising campaign, and potentially increase the demand for the shoes because of the association with sports celebrities. (See also Celebrity Marketing)

Fair Play

Consumer protection watchdogs have been highly critical of many undercover marketing techniques and have called for legislation to regulate or even outright ban it. Most kinds of undercover marketing are technically illegal in the European union. Most U.S. states have laws requiring undercover marketing agents to admit to being promoters if asked. Failure to comply with these laws can result in charges of deceptive business practices and even fraud.

Creating an Undercover Marketing Plan

Undercover marketing works best when the companies that use it understand their products and their customers. It's not enough to simply have the right people talk about a product in public; a company should know what it wants its undercover marketing agents to say and where they can go to reach the target demographic.

Consider the bike shop example mentioned in the previous section. The shop's owners could begin their undercover marketing campaign by researching the local bike culture in their city. This could include everything from studying what kinds of people bike most frequently, to conducting public surveys asking people about their bike-related lifestyle and purchasing habits.

With market research data, a company can craft an effective message for the public part of the undercover campaign. With research complete, the company now knows what its target demographic values and where people who fit in that demographic can be found, allowing them to create scripts or talking points that appeal to those individuals.

Undercover marketing campaigns should be very short-term projects. The longer a campaign runs, the more likely it is to be discovered. When the campaign ends, the company should pay attention to any changes in sales, customer traffic, or website traffic to determine if the campaign was effective.

Stressful Times for Freedom Tobacco

In the mid-2000s, a small American cigarette company called Freedom Tobacco wanted to market its brand, called Legal. There are many restrictions on how and where tobacco can be advertised in the United States. There are no tobacco TV commercials, few magazine ads, and some product placement in R-rated movies. Unable to compete with the advertising budgets of large tobacco companies, Freedom decided to use undercover marketing. The company hired actors to sit in bars with a pack of Legal cigarettes visible in front of them, hoping to share some with other patrons who asked. Unfortunately for Freedom Tobacco, 38 states now have some form of indoor smoking ban. The campaign was good while it lasted. The risky undercover attempt preceded 100 new distribution orders for the company.

Careers in Undercover Marketing

Undercover marketing is unusual because it doesn't need to use a number of skilled positions that are typically involved in modern marketing like web designers, copywriters, and salespeople. Furthermore, it often involves team members who come from non-marketing backgrounds, specifically for the role of undercover marketing agent. The following are a few positions likely to be involved in undercover marketing.

Market Researcher

In the early stages of an underground marketing campaign, it is vital for a company to gather information about consumer behavior. A market researcher is responsible for interpreting existing market data from various sources like case studies and industry publications. Researchers also gather new information through surveys and by interviewing people from a product's target demographic. This role requires competency with computers, great communication skills, and excellent attention to detail.

Education/Experience

Stealth Marketing Salaries

  • Market Researcher
    Starting: $39,000
    Median: $51,000
    Top Earners: $65,000
  • Actor
    Starting: $8.58 per hour
    Median: $17.44 per hour
    Top Earners: $64.04 per hour
  • Marketing Manager
    Starting: $41,480
    Median: $83,890
    Top Earners: $166, 400

Source: Bureau of Labor Statistics

A market researcher should have a bachelor's degree in marketing, business, psychology, sociology, or communications. Researchers can benefit from a background in data analysis or science.

Actor

Many undercover marketing campaigns employ actors to interact with the public. Though it may be a strange way to approach a career in marketing, actors use a number of skills that translate very well to marketing-focused jobs in public relations and brand promotions. Actors for undercover marketing campaigns need to be very comfortable interacting with strangers and talking about a product in a natural, convincing way. These are strong, versatile skills in communication and brand development that would fit well in many marketing career paths.

Education/Experience

There are no formal prerequisites for a career in acting, but actors who wish to pursue more work in marketing should have a bachelor's degree in marketing, business, psychology, or communications.

Marketing Manager

Undercover marketing campaigns are fast and require a lot of careful planning. A marketing manager is responsible for coordinating marketing campaigns. This involves everything from budget oversight to facilitating communication within the marketing team. Managers need to be experienced experts who can understand every aspect of the campaign, including what to do with market research data, who the undercover marketing agents will be, and many other details.

Education/Experience

A marketing manager is a team leader, so he or she should already have experience in marketing in a non-management position. It is assumed that the manager already has a bachelor's degree in marketing, business, or any other marketing-related subject. It can also be useful for a manager to have a Master of Business Administration degree.

Learning Undercover Marketing

Though undercover marketing may be a “guerrilla” strategy, it still has a firm foundation in the principles of conventional marketing tactics (See also Guerrilla Marketing). Those who are interested in pursuing traditional marketing as well as advanced methods like undercover techniques can acquire a solid background in the field through a marketing education program.

Marketing programs begin with survey courses that establish the groundwork of budget management, team building, branding, and other core concepts in the marketing business. The skills developed in these classes are valuable in small team situations like an undercover campaign as well as positions within larger organizations.

Common business tools like office suite software and new media platforms will be explored in marketing program technology classes. The Internet is a major part of not just undercover marketing, but in essentially every kind of marketing employed today, and every job on a marketing team will require some degree of computer literacy.

The last courses students will take serve as the bridge between the traditional class work in the early part of a marketing program and the fast-paced world marketing. These are hands-on courses that ask students to use what they have learned from important texts and case studies to engage in business simulations that allow them to create their own marketing plans.

A marketing education program can be the equivalent of months or even years of observing a real marketing team at work. It gives tomorrow's professionals an opportunity to grow their skills and enter the job market with an uncommon degree of expertise.

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