Red Bull campaign showed power of buzz marketing, writes Nirmalya Kumar and Sophie Linguri

For the past 10 years, the effectiveness of television advertising and other traditional techniques in reaching younger consumers in the developed world has been in decline. Companies are turning to new approaches, such as buzz marketing.

The traditional media have become less effective for several reasons.

First is their increasing fragmentation: as the number of television channels, radio stations and consumer publications proliferates, audiences split into smaller groups, making it more difficult and expensive to reach an audience of a given size.

Second, competition from other media has grown. Computer games and the internet have drawn viewers away from TV screens. Research in the US shows that households with internet connections on average watched almost five hours less television a week than non-internet households in 2002.

Third, people have grown cynical towards brands and multinational companies. Naomi Klein's anti-brand treatise, No Logo, continues to sell in large numbers two years after its publication. Protesters trail the meetings of global economic institutions such as the World Trade Organisation and the International Monetary Fund, attracting growing support for their attacks on the perceived collaboration between governments and big business.

Other threats are emerging. Digital recording technologies such as TiVo now enable a growing number of viewers to ignore advertisements when watching television. Within five years up to half of all US households could be using similar products to bypass advertising breaks.

Yet while the younger generation is turned off by slick advertising and suspicious of corporate manipulation, it remains conscious of brands and image. Buzz marketing - also known as "word-of-mouth", "guerrilla" or "stealth" marketing - has emerged as a way for companies to get on the right side of consumers in the battle for sales.

Buzz marketing involves getting the trendsetters in any community to carry the brand's message, creating interest with no overt advertising or promotion. The message can be transmitted physically (people may be seen with the brand), verbally (it can crop up in conversation) or virtually (via the internet).

Red Bull has seen the benefits of buzz marketing. It has created an edgy, slightly dangerous image for its drink. When Dietrich Mateschitz formulated the drink in 1987 for the Austrian market, bars initially refused to stock it, seeing it as a medicinal or health-related product rather than a mixer. But snowboarders and clubbers soon recognised the boost it gave them and began taking it to alcohol-free discos. Before long bars began stocking Red Bull and, once it was cranked up with vodka, it became the drink of choice in Austrian ski resorts and among "party animals" in other European hot spots.

Consumer education teams also help generate buzz. One of the first marketing techniques Red Bull employed was to hire student brand managers at university campuses, giving each one a case of Red Bull and encouraging them to throw a party. It hired hip locals to drive around in cars emblazoned with the logo and equipped with a four-foot model of the trademark blue-and-silver can. The cars carried fridges stocked with more than 250 cans of Red Bull, to be distributed to "those in need of energy": shift workers, truck drivers, university students, executives, clubbers and athletes.

Red Bull now sponsors a number of "extreme" sports events, backed by TV and press advertising, including a flying-machine Flugtag (in London last week), cliff-diving, kite-boarding, snowboarding, mountain biking, paragliding, street luge, ice cross downhill, skate-boarding and surfing. It sponsored Felix Baumgartner, the sky-diver who crossed the Channel last month. By allying itself with those who push the boundaries, Red Bull has taken on the same associations.

Many argue that Red Bull created the energy drink category by itself. While Coca-Cola and Pepsi were quick to follow, with KMX and SoBe respectively, Red Bull continues to dominate, with a 65 per cent share of the US energy drink market. And it achieved this with minimal advertising. It has since begun to advertise on television - but only late at night - and it insists commercials merely reinforce the existing brand.

The company keeps tight control on how it markets itself to clubs and bars.

Red Bull's success with buzz marketing has caught the eye of mainstream companies. Traditional marketers, however, tend to be uncomfortable with the relative lack of control over the message and target audience that buzz marketing offers.

Among conventional concerns, pharmaceuticals companies have been most successful in marketing their products to doctors and consumers by word of mouth. Companies launching a drug typically select reputable scientists and physicians to conduct clinical trials and promote treatment. Healthcare is particularly susceptible to word-of-mouth marketing - people rely on doctors and friends for treatment referrals and increasingly educate themselves on the internet.

Buzz is useful in many contexts but is particularly effective for products that generate conversation; in other words, products with which consumers are emotionally involved.

This depends on the type of product or service offered, its target market and the network of people in that market. It can be the perfect tool to create an underground campaign, yet backfires badly if it appears contrived, turning off precisely those consumers it wishes to attract. Knowing how buzz-prone your target customers are can help determine how effective a buzz marketing campaign might be for a specific product or service. Then it is just a case of giving your customers something to talk about.