I came across Tyler Reed's blog who posted this great e-conomy presentation:
It underscores that consumers trust word-of-mouth more than any other form of advertising. In fact, 76 per cent of consumers don't believe that companies tell the truth in advertising at all.
According to the Word Of Mouth Marketing Association, yes, there really is such an organization, over 90% of purchases made online were a direct result of some kind of word of mouth action and being a known brand website came in 2nd.
Nothing surprising here. Word of mouth is the worlds oldest form of advertising. I believe the future of it though is through social media and the numbers bear this out. eMarketer estimates that 66 million US adults regularly give advice about products or services. Of those offering advice, 26.8 million are influential online. This number is projected to grow to over 72 million by 2011.
While it will never replace traditional sales/marketing/advertising efforts, it has opened up another authoritative channel into your product, brand or website, and you should have a definitive strategy around it, no matter what it's called!