Social Media Word-of-Mouth vs. Traditional Marketing

There is a noteworthy study in the current issue of Journal of Marketing (Sept. 2009, Vol. 73, No. 5). Entitled, "Effects of Word-of-Mouth Versus Traditional Marketing: Findings from an Internet Social Networking Site," authors Trusov, Bucklin and Pauwels report the results from their research that find that word-of-mouth (WOM) marketing about online social media sites is more effective than traditional marketing actions. They also report that while the effectiveness of online word-of-mouth is higher than traditional marketing efforts initially it also grows over time.

In the long-term their research finds the elasticity of WOM is ~20 times higher than the elasticity for traditional marketing events and ~30 higher than traditional media appearances.

The impact for online marketers, of course, is that this study presents evidence that online word-of-mouth is more cost effective and less expensive than traditional marketing. Let's chock one more up to the power of social media marketing.

The authors, however, also point out that organic WOM online (that word-of-mouth that occurs naturally and without intervention) is probably different from WOM stimulated by the company or organization. They claim that the latter could be called "fertilized WOM."

Personally I hope the phrase "Fertilized Word-of-Mouth" catches on and I will do everything I can to spread it (pun intended.)

The authors did not study organic vs. fertilized WOM but we should assume that if marketers pay for word-of-mouth and are discovered that not only will their efforts be less effective than if the WOM occurred naturally but they might actually be punished for engaging in the practice.

Fertilized Word-of-Mouth. Help spread it!