BUZZ NEWS

Good times ahead for WOM marketing

Posted on November 29, 2007
Cordula Werle

Spending on word-of-mouth marketing in the USA has risen by 35.9% in 2006 to $981.0 million and is expected to top $1 billion in 2007. That makes it one of the fastest growing alternative media segments in the United States.

These are the results of the Word-of-Mouth Marketing Forecast 2007-2011, the first in-depth analysis of the emerging word-of-mouth marketing industry released by PQ Media, a provider of alternative media econometrics, on November 15 2007. The report also predicts that WOM marketing spending will grow by 37.7% (to $1.35 billion) in 2007 and reach $3.7 billion in 2011.

WOM marketing is the fastest-growing segment of the media industry’s marketing services sector, which also includes branded entertainment, direct marketing and public relations, among others. PQ Media defines word-of-mouth marketing as “an alternative marketing strategy supported by research and technology that encourages consumers to dialogue about products and services”. Although the industry has been growing rapidly and continues to do so, it still lacks clear definitions and reliable data, analytics and forecasts. Various sources suggest, though, that food and beverage, media and entertainment, and sports and recreation are those who mostly use WOM strategies.

The remarkable growth trend is due to a continued consumer shift to alternative media and marketers’ needs for increased brand engagement and ROI. Key factors contributing to this upward trend are the enhanced ability of consumers to exchange ideas about brands on the internet, thanks to social networks (like Facebook for example) and consumer-generated media such as blogs. WOM marketing is becoming a full-fledged component of integrated marketing campaigns.

According to Keller Fay Group research, 90% of WOM marketing takes place offline, however, new media have become an important vehicle as it has become possible to measure digital marketing success. Keller Fay Group has also found out that nearly 80% of consumers trust recommendations from family, friends and "influential" persons. That is far more than any other kind of advertising.