According to new research from PQ Media, spending on word-of-mouth marketing rose 14.2% to $1.54 billion in 2008, despite the worst economic recession in 70 years. However, WoM spending is on pace to grow another 10.2% this year, placing it among the fastest growing advertising and marketing segments.

PQ Media defines WoM marketing as an alternative marketing strategy which encourages consumers to dialogue about products and services through various online and offline tactics, often facilitated by brand ambassadors.

Industry spending increased at a compound annual growth rate of 37.6% from 2003 to 2008, as the rise in popularity of blogs, social networks and online communities led brands to shift dollars to WoM as part of integrated media solutions in their quest to engage more elusive consumers.

Total spending on WoM is expected to increase at a CAGR of 14.5% from 2008 to 2013. Both major sectors - content & services and ancillary products - will post strong gains and contribute to overall growth. Ancillary products spending will increase faster than content & services spending primarily because the market is smaller with more growth potential.

Patrick Quinn, President and CEO of PQ Media, notes that “The most influential marketer in a consumer’s life is someone they know and trust, such as a family member, friend or colleague…”

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% Share of WoM Spending by Marketers in 2008
Brand Market	Share of WoM Spend
Consumer Goods Products	17.4%
Food & Drink	12.2%
Finance & B2B Services	9.5%
Electronics & Telecom	9.4%
Retail	9.2%
Auto & Transportation	8.6%
Entertainment & Media	7.5%
Apparel & Accessories	6.2%
Health Care & Pharma	4.1%
Sports & Gaming	3.6%
Travel & Leisure	3.3%
Home & Garden	3.2%
Other	5.8%
Total	100.0%
Source: PQ Media, July 2009