Study: How Profitable Is Word-of-Mouth?†

Brandweek, October 10, 2008 — If a conversation costs 50 cents to generate, how much profit do marketers reap from the typical eight minutes a consumer spends talking about their favorite brands?

According to BzzAgent, a word-of-mouth marketing agency in Boston, that profit is 38 cents. The firm has pegged this amount as the "communication dividend" in a report titled Calculating Your Communication Dividend, which examines the value of word-of-mouth conversations.

In its latest report, BzzAgent also found 87 cents to be the value per communication. The firm arrived at both numbers by mapping standard word-of-mouth calculations onto consumer recommendation and purchase behavior.