What drives purchases: Word-of-mouth, or Advertising?

E-mail this post

Remember me (?)

All personal information that you provide here will be governed by the Privacy Policy of Blogger.com. More...

I should have taken better notes... Grrr... But as I recall, it was during a presentation given by Dave Dickey (Sprint), that WOMBAT 2 attendees were treated to a fascinating graphic that showed the top 20 purchasing drivers relevant to the wireless service industry. (Think Sprint, Verizon, Cingular, T-Mobile, etc.)

If memory serves right, #2 was word-of-mouth.

Where was advertising?


(Hey, but by all means, keep making those Catherine Zeta Jones commercials.)

When Dave and his fellow panelists were asked what percentage of their respective companies' marketing budgets were dedicated to Advertising vs. WOM, the answers were... well, in short supply. (Which is okay. They really don't need to be divulging all of their companies' financial secrets.)

We did nonetheless manage to squeeze a halfhearted answer from the panel: Compared to advertising, WOM was virtually nonexistant in terms of funding and infrastructure. The most candid answer was something along the lines of "far less than 5% of our marketing budgets..." or efforts... I can't recall exactly. For the purposes of this discussion, the two are interchangeable.

So... wow: WOM ranked #2. Advertising ranked #19. Logic would dictate that a hefty chunk of Marketing resources would start to be shifted to the development of broader peer-to-peer networks and away from advertising... but it isn't happening. (Or, to be fair, isn't happening very fast.) #19 on the list still gets all the love... and the cash... and the prestige, even though it clearly doesn't get customers much beyond discovery, and #2, despite pretty telling statistics, is still marginalized and ignored by top execs.

Not that you can compare the relatively low cost of developing the kinds of channels that foster WOM against the very high cost of Advertising, but you get the idea: WOM is still the "whut?" line-item in CXO discussions.

How do you change a fifty-year-old marketing culture overnight?

Well... I guess you don't.

Good thing that by the end of 2006, more solid numbers and statistics will be in. If they consistently indicate that WOM and peer-to-peer recommendations outweigh more traditional marketing methods, get ready for some pretty wide-sweeping changes in the way that products are brought to market in the coming years.

Tomorrow, we'll look at the role that specific marketing tools play in getting customers from shopping to discovery, and from purchase to evangelism. (Yep, there's a cycle, and each step has its own tools.)

Have a great Tuesday, everyone. :)

Technorati Tags: , , , ,

Photos from the session:

0 Responses to “What drives purchases: Word-of-mouth, or Advertising?”

Leave a Reply

      Convert to boldConvert to italicConvert to link


ATOM 0.3

  • Helping companies fine-tune their:
  • - Relationship with their customers
  • - Branding and marketing strategies
  • - Communications architecture
  • - Reputations and buzz-worthiness
  • - Creativity and market relevance
  • Office: 864.289.4557
  • Mobile: 510.284.9893
  • Bat Phone: 864.630.7398
  • My status
  • email me
  • View Olivier Blanchard's profile on LinkedIn
    • follow me on Twitter

      TwitterCounter for @nextweblog

    • Disclaimer: The opinions expressed in this blog are my own and not necessarily those of SYNNEX or any of its affiliates and partners.
    • Subscribe to the BrandBuilder blog

  • Previous posts

    Previous posts

    ATOM 0.3

    This is a Flickr badge showing public photos from Bidulos. Make your own badge here.