Referral economy

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Referral economy is a phrase used to describe the enhanced sales impact of consumers receiving a referral or recommendation from 'like-minded' consumers. The referral economy is particularly prevalent on the web via niche blogs, social networking sites, and review sites like Trip Advisor, where users recommend items to other users. Because these recommendations take place on the web, the perception is that these users are 'genuine' and the recommendation is non-commercial and an honest opinion. 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 like OSOYOU.COM and Kaboodle aim to tap into the referral economy and drive purchase through users personal recommendation.