The Federal Trade Commission yesterday said that companies engaging in word-of-mouth marketing, in which people are compensated to promote products to their peers, must disclose those relationships.In a staff opinion issued yesterday, the consumer protection agency weighed in for the first time on the practice. Though no accurate figures exist on how much money advertisers spend on such marketing, it is quickly becoming a preferred method for reaching consumers who are skeptical of other forms of advertising.Word-of-mouth marketing can take any form of peer-to-peer communication, such as a post on a Web blog, a MySpace.com page for a movie character, or the comments of a stranger on a bus
Increasingly marketing firms are using popular social networks on the Web as part of their campaigns – creating fake user profiles to sell their products. On one hand this is not a good thing for social networks, because the last thing they want is to be clogged up with marketing campaigns masquerading as users in their systems. But the reality is that marketing campaigns are becoming a popular aspect of social networks now – and in virtual worlds such as Sims – and so they help drive page views and therefore advertising for those social networks.
Read this article from the Read/Write Web.
Plus: Sony’s Failed PSP Viral Marketing Stunt from WIRED’s Game|Life
Contribute your knowledge and relevant resources to the “Viral Marketing” article within the Whats New Media Wiki.
Previously from WNM: Hiding advertising online, “Lonely girl.” Web advertising goes deep undercover, MySpace blurs line between friends and flacks and When corporations move in. What happens when Wal-Mart masquerades as MySpace?