Word-of-mouth most effective marketing tool

Posted by Josette Dunn on 15th October 2010

According to Australian-first research commissioned by word-of-mouth (WOM) marketing company Soup, on average each person in Australia has 67.8 branded conversations each week.

Gen Y dining

The research – conducted by US-based, leading WOM research firm Keller Fay – found that the most talked-about categories are Food/Dining and Media/Entertainment and in terms of the kinds of brands that are most talked about telecom, food, tech, and auto brands dominate.

Food brands with the highest positive WOM in Australia according to the research are Coles and Coca-Cola.

“This research also shows how each person is a potent media source for any brand, having conversations with their friends and colleagues about which products and brands
they love, as well as those they don’t,” Soup CEO, Sharyn Smith said.

“The findings also dispel the myth that word of mouth tends to be negative, as nearly two thirds of conversations are positive,” Smith said.

More than half of these branded conversations include a positive recommendation to try or consider buying a product. The majority of advice comes from one’s “inner circle” – spouses/partners (29%), friends (25%), or family (24%).

“We know anecdotally that word of mouth is the most effective marketing tool around, and this research backs up what we know instinctively about its power,” Smith said.

Katie Rigg Smith, Partner, Communications and Planning of MindShare – which co- funded the research – said: “Word of mouth is arguably the oldest communication
channel that exists and yet as an industry our understanding around measuring the impact of word of mouth as a channel is still relatively limited.

“The advent of digital and online social communities has put word of mouth in the form of ‘online buzz’ at the forefront of the communication agenda. However, there is still a
massive knowledge gap in the measurement of ‘real world buzz’,” Rigg Smith said.

“What excited us most about being part of this study is the ability to glean insights around the impact that ‘real world buzz’ can have for brands and then the relative impact of this to online buzz and how one combined with the other can drive the best response for our clients.”

Influencers — people with a high level of influence in their social groups — are an extremely important part of the branded conversation landscape. They conduct a
considerably higher number of conversations and have social networks 74% larger than the general public, and they have double the amount of conversations than the general population. Influencers also rely more heavily on word of mouth from others, rating others’ advice as being more credible and they’re more likely than the general population to pass information along to others.

“The research demonstrates the power of a group of people who are vital to unlocking the power of WOM – the influencers. Key to Soup’s WOM success has been building a community of these influencers and involving them with the brands with which they work,” Smith said.