Word-of-mouth (WOM) marketing spend jumped 35.9% in 2006 to $981 million (from 2005’s $722 million) – and is expected to top $1 billion by a good deal in 2007, making it one of the fastest-growing alternative media segments, according to PQ Media’s “Word-of-Mouth Marketing Forecast 2006-2011.”
Driving the growth is the continued consumer shift to alternative media and marketers’ need for increased brand engagement and ROI, PQ Media‘s first in-depth analysis of the emerging WOM marketing industry found.
WOM marketing, PQ Media said, is the fastest-growing segment of the media industry’s $254 billion marketing services sector, which includes, among others, branded entertainment, direct marketing and public relations:
WOM marketing was the smallest of the seven segments of the marketing services sector in 2006:
However, WOM marketing grew almost five times faster than the overall marketing services sector in 2006 – and more than six times faster than the overall media industry and nominal GDP, according to PQ Media:
(See related story: “Communications Spend to Reach $1 Trillion in ’08; Internet to Surpass All Ad Segments in 2011.”)
Among the findings of the PQ Media study:
Helping to fuel WOM marketing’s growth are a projected 3.5 billion brand-related conversations per day in the US, according to Keller Fay Group, 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 such as blogs.
Though Keller Fay Group research indicates that 90% of WOM marketing still takes place offline, brand marketers have become actively involved in online WOM marketing via new media, metrics and WOM specialists.
About the study: Analysis was limited to US spending and outsourced WOM marketing expenditures, not including brand spending on salaries or internal WOM marketing initiatives. To avoid double-counting with spending on other advertising and marketing services, PQ Media didn’t include the following categories: in-store product sampling; event marketing & sponsorships; public relations not associated with WOM marketing; and social network and consumer-generated media advertising.
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