Word of Mouth Works

Columbia sociologists Lazarsfeld and Katz estimated that word of mouth was seven times more powerful that newspaper or magazine ads in motivating brand-switching as early as 1955.

In 1975, the Roper Organization showed that word of mouth was mentioned as the best source of information about new products and services 67% better than advertising at 53% or editorial content at 47%.

A 2003 Cap Gemini study (cited by AdAge in TV Ads Don't Sell Cars) into the influences on car purchases showed that 71% of the 700 respondents pointed to word of mouth compared to only 15% for television ads. McKinsey estimated that word of mouth drives two thirds of the US economy. Conversation Agent: Permission is an Asset

That's basically why social media work: they are updated, more efficient word of mouth mechanisms.