Referral economy

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In marketing, referral economy is the effect upon sales of consumers receiving a referral or recommendation from other consumers. It occurs on the world-wide web via niche blogs, social networking sites, and review sites where users recommend items to other users. Because these recommendations take place on the web, potential customers perceive that the referring users are genuine and the recommendation is non-commercial. Therefore the recommendation has a higher perceived value. Many advertising agencies have launched word-of-mouth marketing departments designed to create viral campaigns, via the web, or via "sneezing" campaigns. Sneezing[1] is a neologism used to describe the attention grabbing behavior of agencies who go out to consumer environments and talk loudly about how great a brand or item is in order to be overheard. Sites such as Kaboodle aim to tap into the referral economy and drive purchase through users' personal recommendation.


  1. ^ Astroturfing is a synonym for sneezing.