Regulating Buzz Marketing

The World of Mouth Marketing Association is expected to announce a new set of rules and guidelines for word-of-mouth advertising (buzz marketing), one of the fastest-growing advertising practices. The practices include building Web communities for customers to chat about their product experiences, handing out product samples and even hiring actors to talk up a product in public places. Big advertisers such as Procter & Gamble and Microsoft have embraced the practice. Criticism has come that “some of these practices are deceptive because people think they are talking to a real person and they are talking to a shill”. Under the association’s new rules, marketers must make sure that people talking up products or services are real consumers, not actors.
When companies come out with a new product, they have to create demand themselves. Traditional advertising is used more often to keep the sales of existing product that people are already familiar with and have demand for it, but it doesn’t work well when it comes to a brand new product. Therefore, marketers come out with buzz marketing method, which is usually called word-of-mouth advertising. However, this method can be abused and getting self-regulation is not easy. The invisible hand can not control those buzz marketing practices because they lead to more demand and profit. Concerning the social welfare, government has to make regulations to keep buzz marketing practices from being deceptive.