Word of Mouth Marketing is not free and still requires a budget

by Dave Rigotti on December 31, 2008

There was a post over at Mashable titled HOW TO: Simplify by Leo Babauta.  In this article, Lee said, “Cut advertising to zero. Instead, leverage the power of blogs and social media for guerrilla-type marketing.”  When I asked if he consider blogs, social media, and other “guerrilla-type marketing” part of advertising, Leo responded with “I consider it marketing, but you don’t need an advertising budget if you do zero-cost marketing the right way.”

Call me bold, but I think it’s ridiculous to think you don’t need a budget for word of mouth marketing if a company is relying solely on word of mouth marketing.  While it is usually considerably smaller than a budget for many traditional media’s, there is still expenses that need to be accounted.  Here are some expenses the marketing team would still have:

  • Employee salaries (e.g. content creators and community managers)
  • Software costs (e.g. online reputation management, widgets, and blog, if Typepad or similar)
  • Webhosting charges related to marketing (e.g. hosting of blog)

I’m not trying to say word of mouth marketing isn’t great (hell, I make my living off of it), but helping people understand it’s not free.  Try going into a budget meeting and say “let’s cut 100% of our advertising” and see if you have a job the next day.