Introduction to Word of Mouth Marketing vs Advertising
Word of mouth marketing (WOMM) is the voluntary spread of a constructive marketing message from one person to another. This takes place directly using the physical human interaction, alternatively also gets transmitted via a transmission mechanism like the internet and/or social media. WOMM is the frank sharing of views from one customer to another, and the pivotal stage in the customer decision journey which provokes people to purchase a product. However, in today’s hyper-digitized, uneven media environment, such answer is not adequate.
People many a time are curious to know if word of mouth marketing is better or advertising is. Well, all we can say as of now is that word of mouth is better most times, but not always. Actually, there has been vast research on this topic and we have based our hypothesis based on such results. When compared to other forms of traditional advertising, promotional campaigns or media shows, word of mouth has been found to be more beneficial in drawing new customers. McKinsey actually proposes that word of mouth can actually generate twice as many sales than other forms of marketing such as advertising for as diverse products as skincare and mobiles. Now, this must start to make you wonder what really makes ‘word of mouth’ to click?
Essentially, there are 2 main reasons.
It doesn’t need to be emphasized that we trust our friends and colleagues more than we trust advertisements. This is because that advertisements always project a brand to be truly great. We always come across taglines such as “9 out of 10 dentists recommend the XYZ brand of toothpaste”, “Critics approve that Blastoids 5 is the most liked movie of 2011”.
However, we still don’t like to believe them, because of the simple reason that ‘all ads are the same! ’. On the contrary, our friends we know won’t misguide us. They’ll let us know to the point if a product (or service) is really useful or not and we most often than not, tend to go by their word.
2. Superior Targeting
As a matter of fact, word of mouth marketing is more targeted. Let’s suppose a company sells golf equipment. To advertise your message to prospective customers, you would most likely place an ad in a golf magazine. But, since many of the golf magazine’s readers do not actually buy golf products, thus your investment on these ads go worthless.
Conversely, word of mouth marketing is much more directed. It means that people aren’t going to talk to you about a kids’ apparels website if they know, you don’t have them. People only talk to you about things that they know would interest you. ‘Word of mouth’ is just like a torchlight that browses over a social network, finding in its’ course, the most actively engaged recipients for a said piece of information.
This once again forces many of us to ponder if word of mouth is really always better than traditional advertising? We once again reinforce that this is not the case. Why? Need not worry! We’ll tell.
As a starter, word of mouth is a very slow form of marketing. In this age of rapid digitization and online communication, word of mouth seems very irrational and worthless form. It takes a huge lot of time for word of mouth to spread and take the desired effect. In this process, person x tells about a product to person y, who in turn tells it to z and the chain continues. But, obviously, it takes a long time for the information to spread amongst a large sample of probable customers.
Word of Mouth Marketing (WOMM) vs Advertising
Advertising, on the other hand, is a much simultaneous process. It takes the form of a broadcast transmitted to one and all at the same time. Although it is less persuasive than word of mouth if the goal is to rapidly generate awareness about a brand, this is a much effective way.
Next, for word of mouth to happen, there needs to be at least one mouth (and an ear!). What we are trying to suggest is that it requires a significant amount of verbal interaction amongst people. It would surely be not sufficient to post once a while on Facebook, or Twitter. It needs continuous efforts from either party. Thus, it would also be essential then to study trends in social media and understanding why and when do people talk? You need to involve yourself as a brand in the conversation and be as active as can on social media platforms.
Advertising and word of mouth can also go hand in hand. Ads make people talk. When someone hears about a nice product from a friend and then watches it on the television the same evening, it does really make an impact. Thus, the two forms of marketing can and should complement each other and not be substitutes.
Word of mouth form of marketing is considered as the best form when it comes to influencing the customers. According to a study by Nielsen in 2009, approximately ninety-two percent people tend to completely believe their friends and relatives over other traditional forms of advertising whilst making a buying decision. This recent figure was a steep rise as compared to nearly twenty percent in 2007.
These results clearly depict the changing advertising patterns. Thus research by Nielsen also reveals that less than half of all people deem traditional advertising methods such as television ads, newspaper, and magazines as credible sources. Shocking isn’t it! And, the interesting part is that these numbers are only declining with the passing of time.
Randall Beard of Nielsen also stated that although brand marketers are constantly striving for different and unique advertising patterns to lure customers, the truth of the matter is that customers are getting smarter by the day and no longer take everything to be true. He agrees that undoubtedly television is still the most used source of effective advertising but the credibility of word of mouth is increasing at an ever increased pace due to its better goodwill and availability of consumer feedback.
A growing medium of advertising is through the online channel. In a study, an astonishing result that came up was that consumers, who find online advertising banner as authentic rose from just 26 percent in 2007 to around 33 percent as of today. Moreover, 40 percent people who view ads on social networking sites and search engines find them trustworthy. Consumers also perceive ads viewed on mobile, text messages and tablet mediums to be reliable, a figure that rose to 61 percent since 2007 from the previous one.
Nowadays, many creative forms of advertisements are coming up and gaining credibility as well. Word of mouth marketing research also says that approx. 60 percent of consumers do respond to ads on company websites and 50 percent consumers like to respond to company emails. Quite amazingly, around 40 percent people did in one form or another get influenced after seeing advertising products in television shows, movie ads or on the radio.
According to Mr. Beard of Nielsen, with the witnessed increase in the potential of online search and advertising display for the past few years, now marketers have more confidence in putting some investment into them. As a matter of fact, some of the major advertising companies of the world have already invested quite a lot on making their presence on social networking mediums due to the increased level of trust consumers have placed on them. He further emphasizes that brands should be on the continuous lookout for this upcoming ad channel as it possesses a lot of potentials. The information as provided by Beard was based on a recent survey by Nielsen that involved response patterns from 28,000 people of 56 countries all over the world.
So, since now it has been clean and clear that word of mouth marketing is usually the better option when it comes to advertising, it is now also worth knowing some of the significant facts about it. It is also worth mentioning that word of mouth is an optimum choice for advertising online brands, and we say this backed by some important stats. These are as follows:
- 85% of Facebook users recommend a product to their friends after they like it.
- 43% of consumers are very likely to purchase a new product once they learn about it through social media platforms.
- 77% of consumers are highly likely to buy a new product after getting to know about it from family or friends.
- In the U.S., a whopping 81% of all online users make purchase decisions based on their friends’ Facebook posts. And, 78% of them are influenced by the posts of their favorite brands on social media.
- In total 49% of all U.S. consumers prefer word of mouth as their topmost source of brand awareness which was 43% till 2009.
Thus, what are the benefits? The pattern in which most brands prefer to communicate with customers is rapidly altering in both manner and strategy. Since the traditional methods of advertising have almost become obsolete; word of mouth is now the best choice for engaging loyal customers, meaning more customers and more revenue for the brand. Enough praising word of mouth! Did you know that even as of today more than 72% marketers still have not realized the significance of this medium of marketing and hence fail to make use of customer referrals?
Companies like to use advertisements or word of mouth marketing to promote their business, products, and services. Ads and word of mouth marketing are forms of business marketing. Both forms share a few features, but essentially both have their own fixed characteristics which set them apart from one other. These characteristics typically are:
The function of advertisements and word of mouth marketing is to promote the business, products, and services offered. Advertisements tend to be specialized commercials that need a strategic meaning to be depicted in the ad. The ad also necessitates expert production before it can be sent to television or radio channels where it then airs. However, word of mouth marketing is not as formal. It involves existing customers who converse about your brand, product, and service to other humans.
Advertisements cost the company money in certain ways. As a first, it costs the business money to make the script for the ad to produce and lastly it has to pay some to air the advertisement on Television or radio. Word of mouth marketing, conversely, is free of any cost. Whenever a satisfied or unhappy customer discusses a business with others, it won’t cost them a dime.
The time frame of both forms of marketing can differ. Whenever businesses use advertisements, vacant spots are bought to air it on the medium. Since this involves money, the number of times which company can air the ad should be in compliance with the company’s marketing budget. Thus, ads have more set timelines than word of mouth. Word of mouth marketing can continue even after an advertisement finishes. Every occasion a consumer buys or uses a product or service, the potential of his to let know someone what he knows would benefit what that business has to offer. And, each other customer they hold has the capacity to tell many others, whilst an ad tends to arrive the intended audience immediately.
One of the major differences amongst these 2 kinds of marketing is the ‘message’. Advertisements permit the company to pay for the ad to control the ‘message’ that it sends to the consumers. However, businesses can’t control this message which gets transmitted with word of mouth marketing. This is a benefit of paid marketing. Reversely, word of mouth marketing constructs creditability which a paid and cannot. Most customers are aware of the fact that ads are meant to be promotional tactics. They also know that the company regulates this message. Whenever a friend or family member recommends a brand, it is deemed to be a higher level of reliability than a paid ad. According to the Association Word of Mouth Marketing, word of mouth marketing is hard to fake or formulate and is based on consumer satisfaction.
In our opinion, unquestionably, word of mouth is the best medium to engage and retain loyal customers and promote increased sales and revenue. The thing is to realize this fact and start working towards integrating it into your word of mouth business, if not already. We sincerely hope that you would have found this article interesting and informative, and all of your inquisitiveness concerning WOM vs Advertising would have been satisfied and answered.
This has been a Guide to Word of Mouth Marketing vs Advertising. Here we discussed the basic concept, main reason, benefits, functions respectively. You can also go through our other suggested articles to learn more –