Whether you want to or not, you probably see and hear ads every day. Ads are all around us and have been for a very long time. They have even been found painted on walls in the ruins of Pompeii and ancient Egypt. Advertising has come a long way since then, but it is still all about getting people's attention.
Back when few people could read, ads usually took the form of picture. A sign for a shoemaker might have a picture of boot, and a sign for a baker might show a loaf of bread. Street called were a common form of advertising, too. They were hired to announce in a loud voice what was for sale, where to find it, and how good it was, as in "Get your fresh fish right here, right now! The best in town!
In developing countries, some businesses still use street callers, and this from of advertising properly does not cost them very much. In other parts of the world, advertising has become much more sophisticated, and it costs a great deal. If you add up all the money spent on advertising around the world, it world, it comes to the. equivalent of hundreds of billions of U.S. dollars a year.
Business owners will consider it money well spent as long as enough consumer pay attention and buy the product or use the service. But much of the time, consumers do not pay attention. When an ad comes on the TV or radio, they change the station. They turn the pages of magazines without really seeing the ads. If an ad appears on their computer screen, they get rid of it or just look away.
Dave Balter worked in advertising, and he knew that most people do not like ads. They avoid watching them, reading them, or listening to them. He also knew that people do pay attention when they hear about goods and services from people they know. So he said to himself, "If no one pays advertising, but they do pay attention to the opinions of their friends and family, let's focus our attention there. Let's figure out a better way."
What Balter came up with was a website where consumers could sign up to receive free products. In return, they promised that if they liked the products, they would tell their friends. In most cases, the volunteers also got coupons to give to their friends. All Balter asked was that they report back on two questions: What did you think of the companies who had hired him.
After four years, Balter had 65,000 volunteers trying products and telling people about the ones they liked. Then a reporter heard about Balter's idea and wrote a story on it for a major magazine. Free advertising! Within a year after that story appeared, Balter had 130,000 volunteers. Today, he has over 400,000. Balter has advertised a wide variety of products with the help of these volunteers. They are doing word-of -mouth advertising, perhaps the best kind there is.
There may be a risk to advertising by word of mouth, however, according to George Silverman, author of The Secrets of Word-of -Mouth Marketing. What is the danger? Studies have shown that a customer who likes a product or service will tell an average of three people about it. But when she does not like one, she will tell eleven. This means that while good word of mouth can help, bad word of mouth can really hurt.