Undercover marketing is also know as buzz marketing, stealth marketing, or (by its detractors) roach baiting.
The goal of any undercover campaign is to generate buzz. Spontaneous word of mouth, or buzz, is free, can reach consumers isolated from all other media, and unlike conventional media, consumers tend to trust it. Marketers find it very hard to predict buzz let alone generate it on demand. However when it works, undercover marketing does exactly that: an ideal consumer from the example above will not only begin using that product themselves, but will also tell their friends about it, inciting a planned viral marketing campaign that looks spontaneous.
It is the consumer's sense that this recommendation was spontaneous and unsolicited, and the resulting feeling that "one good turn deserves another", that drives the buzz. So, the "bought and paid for" aspect of the transaction must remain hidden. Overall, the person doing the marketing must look and sound like a peer of their target audience without any ulterior motive for endorsing the product—employees of the company cannot do undercover marketing, nor can celebrities (except possibly to other celebrities).
If marketers fail to hide their vested interest in selling a product, they run condsiderable risk of backlash. Cases where consumers have found out they have been manipulated into liking the product, they generally become angry at the marketer (and by association that product) over being mislead. This indignation has lead some to apply more derogatory names to undercover marketing, such as roach baiting, likening the products marketed this way to poison. In some cases, the amount of buzz generated by a failed campaign can exceed that of a successful one, only with the opposite of the desired result.
When targeting consumers known to be consistent Internet users, undercover marketers have taken a significant interest in leveraging Internet chat rooms and forums. In these settings, people tend to perceive everyone as peers, the semi-anonymity reduces the risk of being found out, and one marketer can personally influence a large number of people. During the dot com boom at the turn of the century, stock promoters frequently used chat rooms to create a buzz and drive up the price of a stock.
Whatever the risks, undercover marketing only requires a small investment for a large potential pay off. It remains a cheap and effective way of generating buzz, especially in markets such as Tobacco and alcohol where media-savvy target consumers have become increasingly resistant or inaccessible to other forms of advertising.