Do you know what a conversation’s worth?

A few months ago, we wrote about a new Word of Mouth Marketing Association (WOMMA) initiative, led by House Party SVP of Research Peter Storck, to measure the value of word of mouth (WOM) relative to paid and owned media. As we said at the time, this “Return on WOM” study is so crucial because:

Most marketers at this point know that WOM is the most effective advertising, but we don’t know by how much. There’s no definitive, industry-wide study everyone believes in that establishes its true value…Consequently, marketers aren’t using WOM nearly as much as they should be.

This week, at the 2014 WOMMA Summit, Peter and other study leaders (representing participating brands like AT&T, Discovery Communications and PepsiCo) unveiled the long-awaited study results. As expected, the news was good for WOM practitioners — and for savvy brands looking for more information on why, and how, to tap into the incredible power of consumer advocacy.

An offline WOM impression — that is, consumers talking to one another about a brand, perhaps face to face or over the phone — drives sales at least five times more effectively than a paid-media impression (such as a TV ad). For higher-consideration categories, an offline WOM impression is worth up to 200 paid impressions.

We’ve known for a while that WOM campaigns can drive reach on par with more traditional marketing strategies; House Party campaigns, for instance, regularly drive tens of millions of impressions, most of them through online and offline WOM. Now, we have confirmation that WOM can deliver quantity and quality, with those impressions packing considerably more punch than their paid-media equivalents.

All told, WOM’s impact on sales equals more than 1/3 of that of all marketing, across categories — driving $6 trillion in annual consumer spending. (For higher-consideration categories, its effects are even stronger.) Interestingly, much of WOM’s power rests in its ability to amplify paid media, by an average of 15%; often, WOM is not working in isolation, but instead is referencing and supporting other elements in the brand’s marketing mix. When planning paid-media campaigns, then, marketers would be wise to consider how memorable and talk-worthy an ad is, as conversations about it can generate more, and more impactful, impressions beyond the initial viewing.

Finally, it’s worth noting that the study found that online and offline WOM are both valuable drivers of sales. Overall, online conversations produce 1/3 of WOM’s impact, with offline contributing the other 2/3. The takeaway? Social media is great, but the best marketing plans will find ways to trigger conversations wherever people are talking, be it on a Facebook page or at the water cooler.

This study is only the beginning, of course; there’s much more research to be done on where WOM fits into the marketing mix and how brands can best use it to their advantage. But for now, we finally have proof that WOM is as powerful as we’ve long suspected. It’s great news — so let’s go out and talk about it.