I love these inane marketing forecasts, and can’t resist commenting on one that made it into my mailbox this morning. Entitled “Word of Mouth marketing Forecast“, it came to me from PR firm Keller Fay Group.
The best line:
“The Word of Mouth Marketing Forecast 2007-2011, by PQ Media, pegs spending on word of mouth at $1.3 billion in 2007, representing growth of 37.7% over the previous year. The outlook for the future forecasts growth at a compound growth rate of more than 30%, which would bring spending on word of mouth marketing to $3.7 billion by 2011.”
Let’s project this out a bit…
If I’m doing my math right, 1.3 billion in 2007 with a 30% compounded annual growth rate means it’d be 1.69b in 2008, 2.19b in 2009, 2.86b in 2010, 3.71b in 2011 and…$51.2 billion in 2020.
So what’s wrong with this picture? Well, first off, how do you quantify what is and isn’t “word of mouth marketing”? For example, if I sponsor a party at the Consumer Electronics Show and pay $50,000 for a really good band, surely that’d be word of mouth marketing. Now since I know that a typical party at CES is closer to $250,000 on up (the room rental itself can set you back six figures) and that there are dozens, if not hundreds of parties at that one conference alone, aren’t those millions of dollars legitimately counted as word of mouth marketing expenses since the purpose of a party is to positively influence your reputation with customers and potential customers?
Let’s narrow things down further. If you visit my home town of Boulder and I buy you a cup of tea, is that a “word of mouth marketing” expense?
See the problem? With such a vague categorization — something we can safely label “buying influence” with our tongue only slightly in cheek — isn’t just about every marketing expense a word of mouth expense?
I’ve been in the industry for too many years to get excited about the glossy craps-roll of analyst forecasts, but even with my jaded attitude, Keller Fay did get my attention with this mailing, if only for the shared hubris (shared with the WOMMA itself) of thinking you can extract and label a segment of marketing and use that as a marketing tool itself.
You can’t see it, but my eyes are rolling. Trust me on that. 🙂
Nice comment Dave. I have to agree with you on the forecast info here.
I guess the good news to me is that word of mouth marketing is finally coming out of its infancy stage and being taken more seriously from clients. We can see this industry really growing both on the agency-side and the research-side. So , it is more than just a buzz word!
The big challenge moving forward linked to your comment is how do you effectively measure the impact of Wom on businesses. Still a lot to do there before more stats get published 😉