Word-of-mouth is the oldest, most powerful marketing channel in the history of mankind.

It's so old that it was marketing before marketing even existed. And it's so powerful that it's the most trusted source of product, content, and experience information for nearly every consumer in the world. We'll always trust the opinions of peers and like-minded individuals over marketing copy geared to make us purchase.

Word-of-mouth started with people interacting in person and sharing preferences, then people writing letters... Eventually, technology advances, such as the telephone, led to people expanding on this sharing of information. With the emergence of the Internet and the mass adoption of smartphones, social media has helped word-of-mouth become as powerful and pervasive as ever.

The difference today is that brands can now use word-of-mouth in ways they couldn't before.

And if you think about it, social is word-of-mouth. Except now it's digital, which means it has a whole new set of properties. It's trackable, attributable, and optimizable.

Those properties offer marketers a tremendous opportunity to understand word-of-mouth today—what's being said to drive sales, who's saying it, and where it's being said.

That has never been possible until now.

An Example

Let me explain what I mean. Imagine if a shoe salesperson at a department store could be privy to a conversation among a group of girls walking the retail floor. If the salesperson could know which girl influenced the purchasing behavior for the others or what the girls were really saying about the shoes they liked best (not the sanitized version they'd use in front of a salesperson), this salesperson could be far more effective in her sales approach.

Doing that isn't possible offline because consumers keep these thoughts and feelings private. But in social, these thoughts and feelings suddenly become public (or at least trackable, to some extent). Social opens the door for brands, so they can understand the content, channels, and people that drive business results from word-of-mouth.

The Power of Conversation

More importantly, such understanding lets marketers get better results by harnessing and amplifying word-of-mouth through social.

Looking ahead, brands will pay to amplify existing word-of-mouth recommendations, ensuring that every consumer sees word-of-mouth endorsements relevant to him or her.

Brands will also pay to facilitate more of these organic interactions, rather than force their own, because word-of-mouth is so much more powerful than other mediums and because marketers finally have a way to understand and shape it.

Facebook, for example, already attempts to surface the organic content that it believes a user will find most interesting, but we often miss this content because of the sheer volume of shares from friends. We don't miss ads because Facebook ensures their placement at the top of the feed each time we log in and also draws extra attention to them in the user interface.

In the future, those ads won't be content created by the brand; instead, they'll be shared content about, or related to, brands (which Facebook has algorithmically identified as most interesting to us).

In a practical sense, this means, for example, that Nike will have the ability to ensure that sneakerheads see all the consumer-generated shares about Nike footwear or the sneaker subculture associated with it by paying to give those shares premium placement in the newsfeed. This is a step beyond Facebook's failed Sponsored Stories. And it uses behavioral data to understand the shares that are most interesting to customers, with the brand paying to make sure the content is seen.

Using Word-of-Mouth for Larger Marketing Campaigns

Brands will increasingly make earned social (or word-of-mouth) a part of their larger campaigns, too.

Heineken's Departure Roulette social follow-up (Departure Roulette En Route) is a good example of a brand brilliantly capitalizing on the natural social sharing of its content as part of a broader product launch. As we move forward with social, I believe that more and more holistic campaigns will feature social-sharing components derived from smarter social tracking and understanding.

Finally, there's another major incentive for brands to promote word-of-mouth.

In a nutshell, the more brands can get people to talk, the more they can learn from them, and the more brands can engage and grow their relationship with their customers.

The Power of Sharing

Social allows consumers to communicate with a greater number of people than ever.

Social also gives people greater opportunity to share by removing the friction obstacle (just one click and users can send or receive a recommendation).

Lastly, social networks actively drive effective and influential sharing behavior by creating status around it.

People who frequently share high-quality reviews on Yelp are given Yelp Elite status, for example. And Twitter makes follower counts highly visible, increasing status as the number of followers grows.

All of that actively stimulates more, and more effective, sharing—and consumers have become publishers today, thanks to social, which provides a mass distribution network for each person. Moving forward, consumers will increasingly be encouraged and rewarded to put out more and higher quality content to receive some sort of status promotion.

One area where social has yet to "crack the code," however, is time—making sure that people get content when they are best suited to consume it. We're much better at knowing the "what" (what will get people to convert) and the "how" (the channel) than the "when." But time is a critical component when maximizing word-of-mouth, and we need to remember that fact.

The Power of Insight

Word-of-mouth is the most powerful channel of influence, and social will only further cement this reality—especially in a world of big data, where social's trackable and attributable nature will give us insights into consumer behavior and its potential and current influence. Just as significantly, social's trackable and attributable nature will also give us a more nuanced understanding of how people are influenced socially.

But the ultimate takeaway is that social is misunderstood in many quarters.

For me, social is a more potent version of something we already understand very well—word-of-mouth—and, when harnessed effectively, it can become the most important marketing channel for decades to come (just as word-of-mouth has been for century after century).

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Why Social Is the New Word-of-Mouth Marketing, and What That Means

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image of Brewster Stanislaw

Brewster Stanislaw is CEO of Inside Social, an early-stage technology company located in Seattle,Washington.

LinkedIn: Brewster Stanislaw

Twitter: @Brewws