DEFINITION of 'Trickle-Down Effect'

A phenomenon where an advertisement is rapidly disseminated by word of mouth or by viral marketing. The trickle-down effect works when an ad is so compelling, either because of its uniqueness, humor, entertainment value or other outstanding trait, that people are excited to share it with their friends, family and coworkers.

BREAKING DOWN 'Trickle-Down Effect'

When the trickle down effect works, it can generate a great deal of exposure for a company in a short period of time and, in some cases, at a low cost. The trickle-down effect commonly employs social media, and an advertisement that goes viral through these channels can gain mass media coverage as a news story, giving the ad mass distribution without the costs traditionally associated with advertising through mainstream channels.

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