Warc Blog

Measurement affects WOM activity

21 November 2013
NASHVILLE: A majority of marketers believe that word-of-mouth (WOM) marketing is more useful than traditional marketing but say that an inability to measure the effectiveness of such activity is a major obstacle.

A new study from the Word of Mouth Marketing Association (WOMMA) and the American Marketing Association (AMA) polled 328 marketing executives across a variety of companies and found that 64% subscribed to the view that WOM was more effective.

But respondents also highlighted three significant hurdles to its more widespread use. Fully 89% pointed to the difficulty in measuring offline WOM, while 79% had similar problems with online social media. A further 85% cited showing return on investment.

"This is the great challenge for our industry," said Brad Fay, WOMMA chairman-elect, "to provide more tools to show the return on investment from word-of-mouth marketing."

Despite these concerns, the study said that more marketers expected their companies would increase spending on social media in 2014 (70%) than on digital advertising (59%) or email marketing (53%).

In addition, 29% expected to increasing spending on offline word-of-mouth marketing, well ahead of print media (16%), product sampling (14%) and television (9%) in terms of future spending plans.

Fay announced that WOMMA was embarking on a word-of-mouth measurement initiative to address the measurement challenge uncovered in the survey.

A separate study from social marketing company House Party suggested that measurement might not be such an issue after all, as a series of a dozen matched panel analyses found experience-driven social marketing to consistently deliver high sales lifts, of between 5% and 15%, and ROI, of between $3.30 and $6.60, compared with other media.

"These analyses debunk two myths: that the ROI of social marketing can't be measured, and that if it could be measured, it would be low," said Peter Storck, House Party's SVP of Research & Analytics.

"The truth is that social marketing's ROI is among the most measureble and highest around," he declared.

Data soured from PR Newswire, MarketWired; additional content by Warc staff

 
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