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The ROI of WOM: A first look at “WOMMA’s Return on WOM” Brand Data Study | Ruth Ogbeab

As a winner of the Social Media Week annual Scholarship Program, today I had the opportunity to attend Social Media Week, which runs from February 23rd to 27th 2015 at Highline Stages. My first session was "The ROI f WOM: A first look at "WOMMA's Return on WOM" Brand Data study.                           

What is the true value of word-of-mouth (WOM), online and off, relative to other marketing and media? In 2014, the Word of Mouth Marketing Association (WOMMA) gathered some of the world's leading brands and researchers and launched "Return on Word of Moth," a landmark study to finally answer these questions:How much of a brand's sales are driven by WOM?
  • Does WOM amplify marketing and, if so, by how much?
  • How do the impacts of online and offline WOM compare?
  • What are the best practices for including WOM in the marketing mix models?
  • How do WOM and paid impression compare in their power to drive sales?

Participating Brand and Research Partners:

Beth Rockwood, Discovery Communications
Jim Totten, PepsiCo
Lee Hurley, Weigh Watchers
Erin Tavgac, Converseon
Brad Fay, Keller Fay

Key Takeaways:
  • WOM drives a significant portion of sales, across categories, an averages of 13%
  • For context, paid marketing in total drove 20-20% of sales, on average for the brands participating in the study
  • Categories in the study included telecom, personal care, software, TV programming, FMCG
  • WOM's impact is greater for higher-consideration categories, smaller for lower-consideration
  • WOM's impact was lower for brands in the study whose KPI was "total sales," as opposed to a subset of total
  • 13% of consumer sales in the US was $6 trillion in 2013, according to the Department of Commerce
  • Two-thirds of WOM's impact is from offline WOM, one-third from online
  • WOM plays both a direct and indirect role in driving business performance
  • WOM directly impacts business performance
  • WOM is driven by and amplifies online and offline media, which then impact business performance
  • WOM also drives Search and Website visits, which then impacts business performance
  • Two-thirds of WOM's impact is direct; one-third is as amplifier of paid media
  • WOM amplifies the effect of paid media by 15%
  • WOM has a more immediate impact than traditional media
  • About 90% of online WOM's impact is in the first two weeks
  • About 73% of offline WOM's impact is in the first two weeks
  • A WOM impression had much more impact than a paid media impression
  • An offline WOM impression, and much more (as much as 200 times more) for higher-consideration categories.


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