Before the last decade, and through a major part of it, marketing communications were perceived as two types:
- Marketing-dominated communication like advertising, and
- Consumer-dominated communication like word-of-mouth
However, word-of-mouth as a form of product promotional campaign operating through personal recommendations of brands, products, or services has come to stay big time in spite of misgivings. When Annys Shin wrote on the FTC move on word-of-mouth campaigning in Washington Post in 2006 the article mentioned "no accurate figures exist on how much money advertisers spend on such marketing . . . ." However, after the research report submitted to the industry by PQ Media in 2007, that hardly remains the scenario. According to a report published by Lisa van der Pool in the Boston Business Journal, 26 November, 2007, BzzAgent Inc. received $13.8 million in venture capital in 2006, Cymfony Inc. has a revenue of over $ 5 million, Communispace Corp. expects its revenue to go up from $ 12 million to $ 22 million within the year; Hill, Holliday, Connors, Cosmopulos Inc. has billed an amount of $ 1.2 billions; Arnold Worldwide has billed an amount of $ 1.6 billions, and Connelly Partners has billed a similar amount of $ 90 millions to employers of word-of-mouth campaigns.
When brands like Volkswagen, Goodyear, Hasbro, Listerine, and Lumen are using word-of-mouth campaigning, one can scarcely afford to stay away and be left behind in the race for market mindshare.
References:
1. Richard J. Varey, Marketing Communication: Principles and Practice, Routledge, 2001
2. Annys Shin "FTC Moves to Unmask Word-of-Mouth Marketing Endorser Must Disclose Link to Seller" Washington Post, Tuesday, December 12, 2006; Page D01
3. Lisa van der Pool, "Word of mouth marketing takes off" Boston Business Journal, Monday, November 26, 2007
4. "New PQ Media Forecast: Word-of-Mouth Marketing Spending To Break
5. $1 Billion in 2007" Business Wire, retrieved on 24th December 2007 from www.kellerfay.com/pdf/PQMediaFcst2007.pdf