This is what the Word of Mouth Marketing Association says:

Word of mouth marketing is the most effective form of marketing in existence as it combines the newest strategies, tactics, and channels with the most basic human behavior: People like to talk! But the word of mouth marketing industry is incredibly fast-paced and fluid with important new practices, debates, and trends continually emerging.

George Silverman says:

Marketing is not something you do to customers; it’s a service you do for customers, the service of making the right decisions easy.

Word of Mouth Marketing is a number of things. It’s the customer reviews on Amazon. It’s me writing about my new web browser, Flock. Sometimes it’s the spam in your e-mail Inbox.

I was tweeting back and forth last evening with someone about the value of such a campaign, the value that people are adding, and the value of their labor in doing so.

While it is possible that the IRA and the FASB gods have settled this issue, I am not aware of their treatment. Correction very welcome here.

That said. I would suggest that the result of any word of mouth campaign is an intangible, perhaps that old standby Goodwill, or something new in Assets. As a company, you are going to spend x dollars to create and run a campaign. Those will be business deductions. You’d like to capture the results either as Income or on the Balance Sheet.

I’m not talking about increased sales. I’m talking about that warm, fuzzy feeling that lots more folks have for the ABC company or its Jelly Belly Widget. The stuff that they tell their friends, or the stranger in the store trying to decide what to buy.

The other side of the coin is when things go wrong. I don’t want to be a tomato grower right now even though most tomatoes have been cleared as safe to eat. WoM is that tomatoes can make you sick.

Is there a way to value WoMM? Beats me, but then I never thought valuing Goodwill or future pension obligations was a good idea. Both are firmly on our Balance Sheets. Heck, get too good of an equipment lease and it has to be treated as a fixed asset not an expense. Again, dubious work by FASB but it’s the rule.

I would close by pointing out that you can show volunteer labor on your financials if you are a not-for-profit. Not all of it, the rules are quite specific, but it’s doable. So, WoM contributions ought to be doable as well.