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What is Word of Mouth Advertising?

Jeff Petersen
By
Updated May 17, 2024
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Any time someone recommendeds a product to a friend, he or she has engaged in word of mouth advertising. This type of advertising relies on personal recommendations to promote a product or service. Companies often rely heavily on it to sell a product or service, because it produces good results at a very low cost.

Companies value word of mouth advertising for several reasons. First of all, if a consumer tell someone how much he likes a business, that endorsement doesn't cost the business any money. Magazine, television, radio and Internet ads can be expensive, but word of mouth advertising is usually free. The less money the business has to spend on advertising, the more profit they can make.

Word of mouth advertising is also valuable because it tends to produce good results. People are sometimes skeptical of standard advertising. Maybe the ad doesn't appeal to them personally, or they feel like the company is trying to trick them into buying a product that they don't want. A testimonial from a friend can be trusted, and it's more likely to produce results.

Even more valuable are the word of mouth endorsements given by people who are presumed to be experts. Companies often offer free products or services to experts in an effort to gain free word of mouth advertising. Reviewers are sent products, or given early tickets to a movie for example, and the advertising that is generated when they write a review more than pays for the expense to the company.

It is often said in business that any publicity is good publicity. That is because publicity is essentially word of mouth advertising. If someone hears something about a business, even if it's something bad, they will remember the name. They will likely be curious about the business because of the news. Any time someone hears about a company and what they sell from a friend or from a news story, word of mouth advertising is helping the company become more familiar to people.

Companies sometimes encourage word of mouth advertising from their current customers. They may offer referral bonuses to current customers who bring in new clients. They may hold contests that get people talking about the prizes that can be won. Other businesses hold charity events or other acts of public service. Anything that gets people talking about a company is free advertising, and all successful companies know that free advertising can't be beat.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Jeff Petersen
By Jeff Petersen
Jeff Petersen is a freelance writer, short story author, and novelist based in Berkeley, California. He earned his B.A. in English and Creative Writing from Creighton University and loves putting his skills to work creating captivating content for WiseGeek. Jeff's articles cover a broad range of subjects, keeping readers informed and entertained with his insightful writing style.
Discussion Comments
By Sunny27 — On Aug 09, 2010

Sunshine31- Another very effective word-of-mouth strategy involves the use of endorsements.

Many times popular celebrities are featured in advertisements in order to sell a product or service.

For example, it is a tradition that some of the gold medal winning athletes, from the Olympics are featured on the cover of Wheaties cereal box.

This creates new buzz for the cereal and often enhances its profits and sales.

By sunshine31 — On Aug 09, 2010

Bhutan- Regal Cinema's website allows feedback on its site regarding various films that patrons have seen.

This feedback sometimes influences a potential customer from seeing a movie or not. For example, if enough people respond that they did not like a movie many may not take a chance and watch that movie.

In addition to Regal Cinema also provides feedback regarding the facility itself.

By Bhutan — On Aug 09, 2010

Cafe41- I agree. I think that many people want advice on which restaurants to frequent as well as where to get the right haircut.

Sometimes word-of-mouth strategy can even be linked to the company's website. For example, a company can last all of the feedback that it's received from previous patrons.

If enough positive information is listed from enough customers there is a higher likelihood that a new customer will try the product or service.

By cafe41 — On Aug 09, 2010

Word-of-mouth promotions create buzz for a product. Most of the social media campaigns usually offer a strong emphasis in blogs in order to promote products or services.

The use of major social promotion media networks like Facebook are used to get people interested in a new product. Many times the use of testimonials often come into play.

Word-of-mouth strategy is most effective in the restaurant industry, the salon industry, and basically any service related industry.

Jeff Petersen
Jeff Petersen
Jeff Petersen is a freelance writer, short story author, and novelist based in Berkeley, California. He earned his B.A....
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