Word of mouth is more effective than traditional marketing, but difficulty proving ROI is a significant obstacle to growth.
Those are two of the most significant findings to emerge from the recently released “State of Word of Mouth Marketing Survey,” conducted by the Word of Mouth Marketing Association (WOMMA) and the American Marketing Association (AMA).
According to the study, two-thirds of marketing professionals feel that word of mouth marketing is more effective than “traditional” marketing. Reflecting this belief, 70 percent of marketers expect their companies will spend more money on social media in 2014, representing a bigger increase than any of 10 forms of marketing that were studied.
Standing in the way of bigger investment in word of mouth and social media marketing, however, are difficulty measuring offline WOM (89%), showing return on investment (85%) and measuring online social media (79%).
During the recently concluded WOMMA Summit, Brad Fay – WOMMA’s incoming Chair – announced that WOMMA is embarking on a new word of mouth measurement initiative called the “Return on Word of Mouth Study” to address the measurement challenge uncovered in the survey. WOMMA has retained Sequent Partners, a brand and media metrics consultancy, to oversee a market mix modeling project that will put a dollar value on consumer-to-consumer conversations about brands, both online and offline. WOMMA is in the process of recruiting brands and agencies to participate in the study.
Great strides have been made in the past year or two, as modeling efforts have shown that word of mouth drives sales and also contributes significantly to marketing effectiveness as people who are exposed to marketing often talk about it with others. This new initiative will take this learning even further and allow marketers to truly understand the value of a conversation.