Big Brands are eager to reconnect with consumers after losing ground to private labels over the last few years. Increasingly, they are turning to in-person social networks to sell their wares.
While companies such as Kraft, P&G, and Kimberly-Clark (KMB) continue to pour money into TV and Web advertising, they're mindful that consumers are programmed to “resist the sales push,” says Ronald C. Goodstein, a marketing professor at Georgetown University. “The advantage of word-of-mouth is if I'm giving you a personal recommendation because we're friends, you don't counterargue that.” The downside, he says, is that partygoers may find brand-sponsored fetes a turn-off and wonder if their friends have sold out for the sake of some coupons and freebies.
Although the efficacy of this kind of bottom-up, buzz marketing is difficult to measure, companies will spend an estimated $2.2 billion on word-of-mouth marketing this year in the U.S., according to researcher PQ Media. That's 43 percent more than in 2008.
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