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George Silverman, a psychologist, pioneered word-of-mouth marketing when he created what he called "teleconferenced peer influence groups" in order to engage physicians in dialogue about new pharmaceutical products. Silverman noticed an interesting phenomenon while conducting focus groups with physicians in the early 1970s. "One or two physicians who were having good experiences with a drug would sway an entire group of skeptics. They would even sway a dissatisfied group of ex-prescribers who had had negative experiences!"[3]
With the emergence of Web 2.0, many web start-ups like Facebook, YouTube, MySpace, and Digg have used buzz marketing by merging it with the social networks that they have developed.[citation needed][clarification needed] With the increasing use of the Internet as a research and communications platform, word of mouth has become an even more powerful and useful resource for consumers and marketers.[further explanation needed]
In October 2005, the advertising watchdog group Commercial Alert petitioned the United States FTC to issue guidelines requiring paid word-of-mouth marketers[contradiction] to disclose their relationship and related compensation with the company whose product they are marketing. The United States FTC stated that it would investigate situations in which the relationship between the word-of-mouth marketer of a product and the seller is not revealed and could influence the endorsement. The FTC stated that it would pursue violators on a case-by-case basis. Consequences for violators may include cease-and-desist orders, fines or civil penalties.[4]
Research firm PQ Media estimated that in 2008, companies spent $1.54 billion on word-of-mouth marketing. While spending on traditional advertising channels was slowing, spending on word-of-mouth marketing grew 14.2 percent in 2008, 30 percent of that for food and drink brands.[5]
With the emergence of Web 2.0, many web start-ups like Facebook, YouTube, MySpace, and Digg have used buzz marketing by merging it with the social networks that they have developed.[citation needed][clarification needed] With the increasing use of the Internet as a research and communications platform, word of mouth has become an even more powerful and useful resource for consumers and marketers.[further explanation needed]
In October 2005, the advertising watchdog group Commercial Alert petitioned the United States FTC to issue guidelines requiring paid word-of-mouth marketers[contradiction] to disclose their relationship and related compensation with the company whose product they are marketing. The United States FTC stated that it would investigate situations in which the relationship between the word-of-mouth marketer of a product and the seller is not revealed and could influence the endorsement. The FTC stated that it would pursue violators on a case-by-case basis. Consequences for violators may include cease-and-desist orders, fines or civil penalties.[4]
Research firm PQ Media estimated that in 2008, companies spent $1.54 billion on word-of-mouth marketing. While spending on traditional advertising channels was slowing, spending on word-of-mouth marketing grew 14.2 percent in 2008, 30 percent of that for food and drink brands.[5]
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