Word-of-mouth marketing
Encyclopedia
Word-of-mouth marketing (WOMM), also called word of mouth advertising, is an unpaid form of promotion—oral or written—in which satisfied customers tell other people how much they like a business, product, service, or event. Word-of-mouth is one of the most credible forms of advertising because people who don't stand to gain personally by promoting something put their reputations on the line every time they make a recommendation.
With the emergence of Web 2.0
, many web start-ups like Facebook
, YouTube
, MySpace
, and Digg
have used buzz marketing by merging it with the social networks that they have developed. With the increasing use of the Internet as a research and communications platform, word of mouth has become an even more powerful and useful resource for consumers and marketers.
In October 2005, the advertising watchdog group Commercial Alert petitioned the United States FTC to issue guidelines requiring paid word-of-mouth marketers to disclose their relationship and related compensation with the company whose product they are marketing. The United States FTC stated that it would investigate situations in which the relationship between the word-of-mouth marketer of a product and the seller is not revealed and could influence the endorsement. The FTC stated that it would pursue violators on a case-by-case basis. Consequences for violators may include cease-and-desist orders, fines or civil penalties.
Research firm PQ Media estimated that in 2008, companies spent $1.54 billion on word-of-mouth marketing. While spending on traditional advertising channels was slowing, spending on word-of-mouth marketing grew 14.2 percent in 2008, 30 percent of that for food and drink brands.
or simply "buzz" is a term used in word-of-mouth marketing—the interaction of consumers and users of a product or service serve to amplify the original marketing message. Some describe buzz as a form of hype
among consumers, a vague but positive association, excitement, or anticipation about a product or service. Positive "buzz" is often a goal of viral marketing
, public relations
, and of advertising on Web 2.0
media. The term refers both to the execution of the marketing technique, and the resulting goodwill that is created. Examples of products with strong marketing buzz upon introduction were Harry Potter
, the Volkswagen New Beetle
, Pokémon
, Beanie Babies, and the Blair Witch Project.
and viral advertising are buzzword
s referring to marketing
techniques that use pre-existing social network
s to produce increases in brand awareness
or to achieve other marketing objectives (such as product sales) through self-replicating viral
processes, analogous to the spread of virus
or computer viruses. It can be word-of-mouth delivered or enhanced by the network effects of the Internet. Viral promotions may take the form of video clip
s, interactive Flash games, advergames, ebooks, brandable software
, image
s, or even text messages. The goal of marketers interested in creating successful viral marketing programs is to identify individuals with high Social Networking Potential
(SNP) — and have a high probability of being taken by another competitor — and create viral messages
that appeal to this segment of the population. The term "viral marketing" has also been used pejorative
ly to refer to stealth marketing campaigns—the unscrupulous use of astroturfing
on-line combined with undermarket advertising in shopping centers to create the impression of spontaneous word-of-mouth enthusiasm.
, which is limited to paid and non-personal communication.
History
George Silverman, a mathematician and statistician, pioneered word-of-mouth marketing when he created what he called "teleconferenced peer influence groups" in order to engage physicians in dialogue about new pharmaceutical products. Silverman noticed an interesting phenomenon while conducting focus groups with physicians in the early 1970s. "One or two physicians who were having good experiences with a drug would sway an entire group of skeptics. They would even sway a dissatisfied group of ex-prescribers who had had negative experiences!"With the emergence of Web 2.0
Web 2.0
The term Web 2.0 is associated with web applications that facilitate participatory information sharing, interoperability, user-centered design, and collaboration on the World Wide Web...
, many web start-ups like Facebook
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...
, YouTube
YouTube
YouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos....
, MySpace
MySpace
Myspace is a social networking service owned by Specific Media LLC and pop star Justin Timberlake. Myspace launched in August 2003 and is headquartered in Beverly Hills, California. In August 2011, Myspace had 33.1 million unique U.S. visitors....
, and Digg
Digg
Digg is a social news website. Prior to Digg v4, its cornerstone function consisted of letting people vote stories up or down, called digging and burying, respectively. Digg's popularity prompted the creation of copycat social networking sites with story submission and voting systems...
have used buzz marketing by merging it with the social networks that they have developed. With the increasing use of the Internet as a research and communications platform, word of mouth has become an even more powerful and useful resource for consumers and marketers.
In October 2005, the advertising watchdog group Commercial Alert petitioned the United States FTC to issue guidelines requiring paid word-of-mouth marketers to disclose their relationship and related compensation with the company whose product they are marketing. The United States FTC stated that it would investigate situations in which the relationship between the word-of-mouth marketer of a product and the seller is not revealed and could influence the endorsement. The FTC stated that it would pursue violators on a case-by-case basis. Consequences for violators may include cease-and-desist orders, fines or civil penalties.
Research firm PQ Media estimated that in 2008, companies spent $1.54 billion on word-of-mouth marketing. While spending on traditional advertising channels was slowing, spending on word-of-mouth marketing grew 14.2 percent in 2008, 30 percent of that for food and drink brands.
Buzz
Marketing buzzMarketing buzz
Marketing buzz or simply buzz — a term used in word-of-mouth marketing — is the interaction of consumers and users of a product or service which serves to amplify the original marketing message. a vague but positive association, excitement, or anticipation about a product or service...
or simply "buzz" is a term used in word-of-mouth marketing—the interaction of consumers and users of a product or service serve to amplify the original marketing message. Some describe buzz as a form of hype
Hype
Hype may refer to:*A media circus*Hype , 1981 album by Robert Calvert*Hype , American comedy television series*Hype!, documentary about the popularity of grunge rock in the early to mid 1990...
among consumers, a vague but positive association, excitement, or anticipation about a product or service. Positive "buzz" is often a goal of viral marketing
Viral marketing
Viral marketing, viral advertising, or marketing buzz are buzzwords referring to marketing techniques that use pre-existing social networks to produce increases in brand awareness or to achieve other marketing objectives through self-replicating viral processes, analogous to the spread of viruses...
, public relations
Public relations
Public relations is the actions of a corporation, store, government, individual, etc., in promoting goodwill between itself and the public, the community, employees, customers, etc....
, and of advertising on Web 2.0
Web 2.0
The term Web 2.0 is associated with web applications that facilitate participatory information sharing, interoperability, user-centered design, and collaboration on the World Wide Web...
media. The term refers both to the execution of the marketing technique, and the resulting goodwill that is created. Examples of products with strong marketing buzz upon introduction were Harry Potter
Harry Potter
Harry Potter is a series of seven fantasy novels written by the British author J. K. Rowling. The books chronicle the adventures of the adolescent wizard Harry Potter and his best friends Ron Weasley and Hermione Granger, all of whom are students at Hogwarts School of Witchcraft and Wizardry...
, the Volkswagen New Beetle
Volkswagen New Beetle
-Specifications:*Dimension:**Length: **Width: **Height: **Wheelbase: **Curb weight: *Max speed: 177–210 km/h *Acceleration : 6.5-13.2 sec-Body styles:-Engine choices:-Safety:...
, Pokémon
Pokémon
is a media franchise published and owned by the video game company Nintendo and created by Satoshi Tajiri in 1996. Originally released as a pair of interlinkable Game Boy role-playing video games developed by Game Freak, Pokémon has since become the second most successful and lucrative video...
, Beanie Babies, and the Blair Witch Project.
Viral effects
Viral marketingViral marketing
Viral marketing, viral advertising, or marketing buzz are buzzwords referring to marketing techniques that use pre-existing social networks to produce increases in brand awareness or to achieve other marketing objectives through self-replicating viral processes, analogous to the spread of viruses...
and viral advertising are buzzword
Buzzword
A buzzword is a term of art, salesmanship, politics, or technical jargon that is used in the media and wider society outside of its originally narrow technical context....
s referring to marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
techniques that use pre-existing social network
Social network
A social network is a social structure made up of individuals called "nodes", which are tied by one or more specific types of interdependency, such as friendship, kinship, common interest, financial exchange, dislike, sexual relationships, or relationships of beliefs, knowledge or prestige.Social...
s to produce increases in brand awareness
Brand awareness
Brand awareness is a marketing concept that enables marketers to quantify levels and trends in consumer knowledge and awareness of a brand's existence...
or to achieve other marketing objectives (such as product sales) through self-replicating viral
Viral phenomenon
Viral phenomena are objects or patterns able to replicate themselves or convert other objects into copies of themselves when these objects are exposed to them....
processes, analogous to the spread of virus
Virus
A virus is a small infectious agent that can replicate only inside the living cells of organisms. Viruses infect all types of organisms, from animals and plants to bacteria and archaea...
or computer viruses. It can be word-of-mouth delivered or enhanced by the network effects of the Internet. Viral promotions may take the form of video clip
Video clip
Video clips are short clips of video, usually part of a longer recording. The term is also more loosely used to mean any short video less than the length of a traditional television program.- On the Internet :...
s, interactive Flash games, advergames, ebooks, brandable software
Brandable software
Brandable software is typically software created by one company for the purpose of allowing other companies to obtain resell rights or giveaway rights to the software, change the brand associated with it, and sell it as if it were their own...
, image
Image
An image is an artifact, for example a two-dimensional picture, that has a similar appearance to some subject—usually a physical object or a person.-Characteristics:...
s, or even text messages. The goal of marketers interested in creating successful viral marketing programs is to identify individuals with high Social Networking Potential
Social networking potential
Social networking potential is a numeric coefficient, derived through algorithms to represent both the size of an individual's social network and their ability to influence that network...
(SNP) — and have a high probability of being taken by another competitor — and create viral messages
Viral messages
Viral Messages refer to marketing messages that are passed from person to person through their Social Networks. To create successful viral marketing messages, where success is defined as positive Return on Investment, marketers must:...
that appeal to this segment of the population. The term "viral marketing" has also been used pejorative
Pejorative
Pejoratives , including name slurs, are words or grammatical forms that connote negativity and express contempt or distaste. A term can be regarded as pejorative in some social groups but not in others, e.g., hacker is a term used for computer criminals as well as quick and clever computer experts...
ly to refer to stealth marketing campaigns—the unscrupulous use of astroturfing
Astroturfing
Astroturfing is a form of advocacy in support of a political, organizational, or corporate agenda, designed to give the appearance of a "grassroots" movement. The goal of such campaigns is to disguise the efforts of a political and/or commercial entity as an independent public reaction to some...
on-line combined with undermarket advertising in shopping centers to create the impression of spontaneous word-of-mouth enthusiasm.
Terminology controversy
Businessdictionary.com holds that the term "word of mouth advertising", which is a common term used in marketing, is "incorrect", as it doesn't match their definition of advertisingAdvertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
, which is limited to paid and non-personal communication.