You see your co-worker Courtney shared a photo of the newest pair of neon Nike running shoes. You know Courtney is an avid runner; she posts on her Facebook about fitness all the time. Since you’re in the market for some new sneakers – and Courtney-from-the-first-floor seems to know what she’s talking about – you trust her judgment, click the link, and end up purchasing your own pair.

Purchasing a product after seeing a recommendation on the News Feed is a common consumer response. Even if they don’t have a strong personal relationship, consumers are more willing to trust and act on recommendations from people they know more than any form of paid media. In fact, 68% of U.S. social media users ages 18-34, and 53% of those ages 35-44, say they are at least somewhat likely to make a purchase based on a friend’s social media updates.

2 in 3 marketers say Word of Mouth Marketing (WOMM) is more effective than traditional marketing. This means marketers are moving away from traditional advertising options like newspaper, radio, and television. In fact, in a recent survey done by the Word of Mouth Marketing Association, 70% of marketers said they expect their companies to spend more money on social media in 2014.

However, social media is vast. Simply throwing money at a broad social media campaign would be a waste if you’re trying to keep costs down. So, what are you options?

If you turn to Facebook ads to reach potential customers, expect to be met with a expensive subpar 0.051% Click Through Rate. Facebook may have a huge reach, nearly 1 billion users with 1 trillion page views per month, but people only click on about one of every 2,000 Facebook ads they see – and only 45% of people trust them. That doesn’t sound like the best option.

Instead of buying ineffective ads, why not pay to find and activate your most influential fans?

Word of Mouth Marketing is killing paid advertising. It’s more effective because it’s more trustworthy, it has better targeting, it has massive reach, it affects search engines, and it ultimately encourages purchase decisions. 

 

1. It’s Trustworthy

Hasn’t your mother ever told you not to trust strangers? Well, one of the top reasons WOMM is dominating paid advertising is because of this simple fact:

People trust people they know more than people they don’t.

Actively reaching out to fans of your Facebook brand page is beneficial, because 82% of consumers trust a company more if they’re involved in social media. However, if you’re only posting as a company to a large target group, you’re missing out on potential sales.

Only 69% of people trust branded websites like as your company’s Facebook page. This may sound like a sufficient amount at first, but it pales in comparison to the 84% of people that trust recommendations from people they know. This means, if you’re not activating influencers to share branded content you’re missing out on potential customers! For a more effective marketing strategy, marketers should find individual influencers to distribute earned media to their social circles. This way, prospects will see their Facebook friends post about your company, and will consequently be more likely to trust the content (ultimately leading to a purchase).

 

2. It Has Better Targeting

A traditional advertisement can be somewhat targeted. A billboard on the side of the highway could advertise Dunkin’ Donuts to professionals commuting into the city, or a sports apparel ad might draw the right attention if placed in the Sports section of a newspaper. But now, digital marketing allows us to be much more specific in our ad targeting.

If you’ve experimented with Facebook ads, you may have realized that although they have a huge reach (1 trillion page views per month), they have limited offerings for targeting options – which are key for driving ad relevancy and Click-Through-Rate. If you want to maintain this huge reach, while tailoring to a more targeted audience, Word of Mouth Marketing is your solution.

“Word of mouth is like a searchlight that goes through a social network and finds the most interested receivers to give a piece of information.”

– Jonah Berger, Associate Professor of Marketing at the University of Pennsylvania

WOMM is powerful because your customers associate with many people who are like them. Meaning, an individual in your target demographic is likely to hang out with, and connect on social media with, people who want, need, and buy similar products and services to them. So, when an influencer shares your company’s content on their social media profile, their audience is more targeted to your offer than the somewhat-targeted audience of a Facebook ad, or the mass audience of a traditional promotion.

 

3. It Has Massive Reach

One in five online page views in the United States occurs on Facebook. Twenty percent is a pretty notable reach, don’t you think? In fact, while you’re reading this post you probably just checked your Facebook, you’re just about to check your Facebook, or you already have Facebook open in another window.

Facebook is the world’s largest social network, comprising over 845 million monthly active users. It’s the place to be if you want to reach almost any target audience. By inspiring users to share branded content on Facebook, you have the ability to reach a massive audience of potential customers.

 

4. It Affects Search Engines

1.5 million pieces of content are shared on Facebook daily. Using WOMM strategies, you can insert your company into the conversation, which increases your visibility and impact. When using online search, 25% of search results for the world’s 20 largest brands are links to user-generated content published via social media. If you want your company to be easily searchable, inspire people to share branded content on their social media feeds. The more people who create personal content, the higher you’ll be on search results. Plus, 51% of Americans trust user-generated content over other information on a company website!

 

5. It Affects Purchase Decisions

Ultimately, WOMM affects final purchase decisions. This is where it really matters for your team, because in the end it’s all about the sale. Remember, 68% of U.S. social media users ages 18-34 and 53% of those ages 35-44 say they are at least somewhat likely to make a purchase based on a friend’s social media update. People listen to people they know, making WOMM a powerful tool that can increase your sales and lower your marketing costs.

 

The Wrap-Up

Word of Mouth Marketing is an effective tactic for increasing sales and building brand awareness. Generate buzz about your business by inspiring people to share branded content on their social networks. By incentivizing people to talk about your brand you can build trust, spend your marketing budget wisely, and increase your sales.