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NEWS1 December 2014

Word of mouth drives 13% of sales

News North America

US — A study measuring the impact of consumer word of mouth found that online and offline consumer conversations and recommendations account for 13% of consumer sales – or $6 trillion in annual consumer spend.

About one-third of sales impact is attributable to offline word of mouth acting as an ‘amplifier’ to paid media, such as television, as consumers spread advertised messages according to the study from the Word of Mouth Marketing Association (WOMMA).

But most of the impact of word of mouth works independently of advertising, whether stimulated by product or customer service experiences, public relations, owned and earned digital content.

In higher price-point categories, word of mouth’s impact increased to almost 20% of sales. The research also found that word of mouth’s impact happens closer to the time of purchase than traditional media – often within two weeks.

The study was based on econometric modeling of sales and marketing data provided by participating brands with analysis conducted by Analytic Partners.

Alice Sylvester of Sequent Partners, WOMMA’s consultants for the project, said: “The study has shown how WOM can be incorporated into marketers’ econometric models and managed with the same level of knowledge as advertising and promotion.”

In addition to the data from sponsors, social media data for participating brands was contributed by the analytics firm Converseon, and offline word of mouth data by the market research company Keller Fay Group.

@RESEARCH LIVE

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