Marketing expert Assoc. Prof. Bodo Lang explains what word of mouth is, why it works, and how much it can be trusted. And he reveals that whether it's online or face to face really matters.

In an environment dominated by paid advertising, advertorial and social media influencers, true word of mouth recommendations remain powerful.

Marketing expert Bodo Lang explains word of mouth (WOM), why it works, and how much it can be trusted in this highlight of Auckland University's Raising the Bar Home Series.

Listen to the talk

Edited highlights from the discussion

Word of mouth is informal communication about a product or a service that can occur between two or more consumers. And it's everywhere. 20% of all tweets contain the mention of a brand name. A study found that in one week, the average American consumer engages in 121 word of mouth episodes in which 76% contain a specific brand name.

And what positive word of mouth does is to induce enthusiasm, confidence and optimism in the receiver. If you've talked to anybody and they've given really positive word of mouth about something that they've experienced recently, it picks you up a little bit and it influences your emotional state even though you weren't part of that consumption experience at all.

Word of mouth also has an impact on what we think and how we think. It has been shown to be really effective in increasing brand awareness, for example. It can also increase your expectations about a brand or service. If somebody speaks very highly to you about a particular motorbike, say, immediately your expectations of that motorbike will be much higher.

You will also have much better retrieval from memory about the brand. Hearing somebody speak with great enthusiasm about a particular restaurant, makes it really easy for you to recall that brand. The technical term for that is diagnosticity. That type of knowledge is very accessible, and helps you make your own decisions.

Word of mouth affects feelings, and what you think, but it also affects what you do. If a new brand launches in the market at day zero, without any advertising, nobody will know that brand.

What marketers typically do is advertise to increase brand awareness so that people say, "Oh there is that new business out there, you know, a new type of product in the supermarket, perhaps, or a new car Tesla. Never heard of it before. I wonder what it's like?"

Word of mouth also starts filtering through only once people have actually had an experience with the car or product. So it encourages product trials, particularly for products where there's quite a bit of risk…

Go to this episode on rnz.co.nz for more details