3.5 Billion Conversations A Day
Spending on word-of-mouth (WoM) marketing jumped 35.9% in 2006 to $981.0 million and is expected to top $1 billion in 2007, according to findings of an in-depth analysis of the emerging word-of-mouth (WoM) marketing industry, presented in Las Vegas by PQ Media CEO Patrick Quinn.
Driving the growth, says the report, is the continued consumer shift to alternative media and the marketers' need for increased brand engagement and ROI.
Quinn said, "The new media industry axiom, 'only what gets measured gets bought,' has led to a discernible shift in media spending from traditional to alternative advertising and marketing strategies... WoM marketing... is capitalizing on this trend though its ability to provide ROI to brand marketers in a... cost-effective platform."
Spending on WoM marketing is forecast to grow 37.7% in 2007 to $1.35 billion, as brand marketers shift more dollars to WoM as part of cross-platform marketing campaigns, according to the PQ forecast. Total WoM marketing expenditures are projected to climb at a compound annual rate of 30.4% in the 2006-2011 period to $3.70 billion as brand marketers take advantage of dedicated WoM marketing strategies for improved return on investment (ROI).
According to Keller Fay Group, notes the report, there are a projected 3.5 billion brand-related conversations per day in the U.S., with nearly 80% of consumers trusting recommendations from family, friends and "influential" persons over all other forms of advertising and marketing.
Among the key trends driving growth, the Internet has enhanced the ability of consumers to exchange ideas about brands through social networks like Facebook and MySpace and consumer-generated media like blogs. Though Keller Fay Group research, says the release, indicates that 90% of WoM marketing takes place offline, brand marketers have become actively involved in online WoM marketing via new media, metrics and WoM specialists.
"Major brand marketers are moving from just testing word-of-mouth marketing to including it as a growing component of fully-integrated marketing campaigns," Quinn added.
The report says that no breakout is currently available on spending by product categories, but data from various sources suggests that food and beverage, media and entertainment, and sports and recreation are among the heaviest users of WoM strategies.
For more information and the complete press report, please visit PQMedia here.