$$$ Thrown at Buzz Drive Facebook's Beacon Plans

But it's proving difficult to get right on social networking sites
By Jim O'Neill,  Newser Staff
Posted Nov 30, 2007 11:42 AM CST
$$$ Thrown at Buzz Drive Facebook's Beacon Plans
Laura Handyside, clockwise from left, of Duluth, Peter Sparby, of North Oaks, Minn., and Kadian Hofstad, of Pine City, Minn., laugh while using a laptop to check facebook web pages of their friends.   (KRT Photos)

(Newser) – Facebook's efforts to fix its Beacon system show that talk isn't cheap, as marketers increasingly are finding it’s a great way to spread the word about their product. Word-of-mouth advertising has taken off, with nearly $981 million being spent on campaigns last year, a 36% increase from 2005, reports Ars Technica. Companies are now integrating WoM into every campaign.

With research showing 80% of consumers trust friends’ and family recommendations, social networking websites and chatrooms where consumers trade opinions on products have become so important that companies like Proctor & Gamble are buying WoM firms to help take advantage of the media. Critics, however warn WoM isn’t yet “the DVD that replaced the VCR." (Read more advertising stories.)

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