Word-Of-Mouth Marketing: Effectiveness and Implementation
Submitted by: Spandana Araga
Marketing II Term Paper
How it works Advertising agencies and marketing experts get paid big money to create ads that are unforgettable. But getting those ads seen and getting people to talk about them are two of the biggest challenges facing any advertiser these days. It is a common misconception that memorable marketing campaigns require big budgets. Somewhere along the line, marketers came up with a brilliant solution: let the customers spread the word themselves. Word-OfMouth Marketing(WOM), also known as Viral Marketing consists of advertising campaigns and messages that depend on peer to peer forwarding. WOM plays on the common sense that when a person likes something, they want to talk about it. They create a potential for exponential growth like a “virus”, and hence the name. Trusav et al (2009) in a study of WOM versus traditional marketing found that WOM referrals have a strong impact on new customer acquisition. The long-term elasticity of signups with respect to WOM was estimated to be .53. The elasticity for WOM is approximately 20 times higher than that for marketing events and 30 times that of media appearances
Effectiveness of WOM According to the article, “Word-Of-Mouth Marketing will change your business” by Hedges and Chung word-of-mouth marketing “gives brands a powerful and influential way to engage their target audience. The article talks about how consumers are very vocal about their views especially when it comes to personal care products like cosmetics. Projections by eMarketer predict 72 million U.S. adults will regularly give WOM advice about products or services in 2011, up from 65 million in 2006. There are 3.5 billion WOM conversations occurring daily in the U.S., according to the Keller Fay Group. Though 92% of these conversations are through off line means- face to face or phone- a vast majority of the influencers depend on...