Budget Spent on Social Media (Word-of-Mouth) Marketing Growing

By Beth J. Bates, New Media Special Correspondent

Despite an uncertain economy, spending on word-of -mouth (WoM) marketing (including social media) rose 14.2% to $1.54 billion in 2008 according to research from PQ Media and is on target to grow another 10.2% this year. This includes budgets spent on tools like Facebook, Twitter and LinkedIn.

PQ Media defines WoM marketing as an "alternative marketing strategy" driven by "brand ambassadors" (evangelists) online and offline.

Why? I believe that as the economy remains weak, businesses are realizing that their customers are clamoring for trust. Consumers want to spend their money with people they trust and can relate to…not big name businesses. So, companies like Zappos.com, Comcast and JetBlue, who pride themselves on personal relationships and total transparency, are growing and big, anonymous corporations are losing.

And while print and television advertising fees rise, WoM and social media marketing remain within reach of most businesses. Social media is not free, but compared to other marketing avenues, it's a pill that's easy to swallow.

Has your business shifted its marketing budget to WoM marketing?

Beth J. Bates consults with Hinge on social media tool selection and strategy and helps its clients find effective ways to leverage these new mediums to meet business goals.