Word of Mouth Replaces Traditional Marketing

While driving to a meeting yesterday, I heard on the car radio an advertisement for advertising. The message was businesses that spend money on advertising in tough economic times have an advantage over those that don’t. The spot went on to describe how a small investment in traditional advertising could increase sales and generate more customer traffic. I had to smile. Spending money on advertising helps the advertising industry come out of a recession in better shape, for sure. That’s not necessarily true for the rest of us.

Getting Ahead During a Recession
I do agree that spending money on promoting your company is one of the best things you can do to weather a financial storm. A recent article in Inc. Magazine titled Managing: Planning Now for an Economic Rebound, describes different ways companies are improving their businesses. Where money is being invested, it’s done with careful consideration and an expectation  that the investment is going to produce results.

The Rise of Word of Mouth Marketing
Recent research indicates that traditional advertising is no longer the most effective way to reach your target audience. PC Media Research reports:

July 29, 2009 Stamford, CT, Spending on word-of-mouth (WoM) marketing rose 14.2% to $1.54 billion in 2008, despite the worst economic recession in 70 years, accentuated by secular and structural trends battering traditional advertising and marketing media, according to new research from PQ Media ( While year-over-year growth is expected to slow in 2009, WoM spending is on pace to grow another 10.2% this year, placing it among the fastest growing advertising and marketing segments. By comparison, the U.S. economy, as well as the advertising and marketing services sectors are all expected to decline in 2009 for the first time since the Great Depression of the 1930’s.

Bridge Ratings, an American company providing audience measurement services for radio, agrees with the changing nature of marketing and advertising. According to a 2007 report titled: The New Influentials, WoM has exploded to include “Strangers with Experience.” The survey describes this trend:

Note that as Influentials, “Friends, Family and Acquaintances” maintained a consistent rating. “Strangers with Experience” improved significantly in the ten years between studies, and “Teachers” trust level has slipped. Of particular interest is the drop in the Influencer value of “Religious Leaders,” “Newspapers & Magazines” and “TV News Reporters.”

The report went even further. In an indictment of their own industry, the survey states:

No matter what your business or product is today and in the foreseeable future, the concept of marketing that service or product has been turned on its head.

Traditional Advertising is Dead
Consumers have changed the way they make purchasing decisions. With more information available, everyone is doing research, most of it conducted online. The global financial crisis has supported this trend and now, more than ever before, consumers are educating themselves. If your company is not producing documents that help prospective customers make an educated choice, you are losing business.

The Solution
Content marketing is the smart place to invest. Websites with informative blogs about your products or services, case studies that describe the experiences of your best customers and white papers that educate and inform are all examples of content marketing. Investment in these materials will highlight the best parts of your company and provide a basis for people to choose you. The businesses that survive the recession are going to be the companies that treat their customers as smart consumers. Investing in catchy slogans, memorable jingles and flashy brochures is the old way to do business. Describing your expertise and endorsing it with corroborating documentation is the key to success in the new economy. Developing a portfolio of content-rich material readily available for consumer research is the new marketing model. Don’t let anyone persuade you differently.

  • Hi Kathy,

    Thanks for your anecdotal evidence. WoM is a great way for small/medium business to target their prospects without spending a lot of money. I love to hear these sorts of stories.

  • Hey Sarah…This was pretty cool and validares what Vicki and I have found. She can spend $500 for an ad that reaches thousands of people and get 20 reponses. We do an e-newsletter that gors to 200 and we get the same number of replies. Way more of our new customers come from current customer recommendations.

  • Hi Bambi,

    You’re right, traditional advertising is not dead. I got carried away on my subheadings and I apologise for that. I agree with your point that a brand benefits most from an integrated approach of different marketing tactics.

    The point I wanted to make is that money invested in “content marketing” is money well spent. During a time of economic hardship – recession, depression or start-up – it makes sense to invest in content over less tangible, more traditional forms of advertising.

  • Thanks for your post. I am not sure that we should go as far as saying that traditional is dead. I believe that there is a role for all marketing tactics – to be blended to best position your brand within the best environment for reach & frequency – to build awareness – which in turn heighten the engagement and dialogue offered by ‘new media’. The marketing activities that we select should be the best for our target customers, within our budgets, with realistic objectives. Fortunately broadcasting is no longer the only option.

  • Terrific point, Kathy. Marketing efforts really only succeed when clients keep coming back.

  • Kathy Shea

    Hmm. Agree. Would add that this not only helps customers choose you — helps them stay with you, and feel good about staying with you, over time.

    Another valuable content type: your customers’ voices on display for prospective and currect customers.