Is word of mouth better than advertising?

This is a guest post from Jonah Berger, Marketing professor at the Wharton School at the University of Pennsylvania and New York Times bestselling author of “Contagious: Why Things Catch On.” See the original post this is adapted from and more like it on his blog.

People often wonder whether word of mouth is better than advertising. The answer? Yes. But not always.

A great deal of research finds that word of mouth is more effective than other types of marketing. Whether compared to traditional advertising, media mentions, or promotional events, word of mouth is more useful in creating new users and customers. Indeed, McKinsey suggests that “word of mouth generates more than twice the sales of paid advertising in categories as diverse as skincare and mobile phones.”

Why is word of mouth more effective? Two main reasons.

1. Trust

Not surprisingly, we trust our friends more than we trust ads. Ads always say the product is great. “Nine out of ten dentists prefer new Shiny White toothpaste.” “Critics agree that Blastoids 7 is the best movie of 2013.” But because ads always say the product is wonderful, we tend not to believe them.

Our friends, however, will tell it to us straight. They’ll tell us if the product is good, or bad, and as a result we’re more likely to believe their recommendation.

2. Better Targeting

Word of mouth is also more targeted. Say your company sells golf clubs. To target your message at potential customers, you might advertise in a golf magazine. But while some of the magazine’s readers might be in the market for clubs, many may not be. So in the end, some of the ad dollars are wasted.

Word of mouth is much more focused. No one’s going to talk to you about a great baby clothes website if you don’t have a baby. People only tell you about things that they think are at least somewhat relevant to your interests. Word of mouth is like a searchlight that goes through a social network, finding the most interested receivers for a given piece of information.

So is word of mouth always better?

Well, not quite.

First, it’s slower. Think of a long line of people playing a game of telephone. Social media and online communication have definitely sped the diffusion of information, but word of mouth still moves from person to person — sequentially — so it takes time to spread. The first person tells the second person something, who tells the third person, etc. It takes a while for information to travel from one end of the line to the other.

Advertising, however, tends to be more simultaneous. It’s like a broadcast that reaches everyone in line at once. It is less persuasive than word of mouth, sure, but if the goal is to quickly increase broad awareness, advertising can be a better way to go.

Second, word of mouth depends on motivating people to talk. It can be highly effective, but whether it is or not depends on people actually spreading the word. It’s not enough just to be on social media or post things once in a while. To get people to talk about you, your business, or your idea, you need to understand why people talk and share in the first place. Then you need to figure out how to make yourself part of the conversation.

Advertising and word of mouth can also work together.

Ads remind people about the brand, which encourages them to talk about it. Someone hears about a product from a colleague and then sees an ad which seals the deal. The two can act as complements rather than as substitutes.

So which is better, word of mouth or advertising?

It depends.

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About Jonah Berger

Jonah Berger is a Marketing professor at the Wharton School at the University of Pennsylvania, and author of the New York Times bestseller Contagious: Why Things Catch On. He consults from a variety of companies and organizations on how to generate word of mouth and help products, ideas, and behaviors catch on.

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Comments

  1. Marvin

    I have found that the biggest factor in WOM is the importance of specific information to the niche group to which that information is relevant.

    Relevance and urgency create the potential for any bit of information to become important enough to become viral. This effect is enhanced when there is an established social network throught which that information can flow.

    One to one sharing can quickly move across any group where values, ideas or interests are shared.

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