Trickle-Down Effect

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.

RELATED TERMS
  1. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital ...
  2. Viral Site

    A website that has become so popular that word of mouth and links ...
  3. Viral Marketing

    Internet advertising or marketing that spreads exponentially ...
  4. Flighting

    An advertising scheduling strategy in which a business alternates ...
  5. Advertising Appropriation

    The portion of the total marketing budget that is allocated to ...
  6. Social Media Marketing (SMM)

    The use of social media websites and social networks to market ...
Related Articles
  1. Personal Finance

    Understanding Trickle-Down Economics

    According to the trickle-down theory, cutting taxes can stimulate economic production.
  2. Professionals

    Bye, Mad Men: How the Net Is Changing Advertising (FB, TWTR)

    The Internet and digital media are changing the way companies advertise and market themselves. More targeted, varied and faster advertising is possible.
  3. Entrepreneurship & Small Business

    How is Programmatic Advertising Changing Media?

    Understand what programmatic advertising is as well as the technology that drives it. Learn about the top four ways programmatic advertising is changing media.
  4. Professionals

    Trends And Growth In The Digital Advertising Industry

    The rapidly expanding digital advertising industry is leading a shift towards content and demanding forced innovation.
  5. Professionals

    Digital Advertising Is The Future, But Why? (ZNGA, GOOG)

    Digital advertising has outgrown the internet.
  6. Professionals

    Advertising From TV To Internet: An Industry History

    Changes in television consumption habits have forced advertising to target audiences through new means, namely Internet advertising.
  7. Entrepreneurship & Small Business

    Why Is Old Media Interested in New Media?

    With their eye-popping valuations and investments, new media startups are hot. But why are legacy media organizations interested in them?
  8. Financial Advisor

    Advisors: How to Ask Friends for Social Media Help

    Social media can be a difficult endeavor for those who didn’t grow up around technology, but younger friends and family can help quickly fill the void.
  9. Professionals

    Why Facebook Is Free to Use (FB)

    Learn why Facebook is free to users, and understand how the company makes more money by charging advertisers than it would if it charged users.
  10. Insights

    Wal-Mart’s New Advertising Plan (WMT)

    Wal-Mart is moving away from expensive traditional advertising and using social media, word of mouth and its popular app to entice shoppers to spend money
RELATED FAQS
  1. What are the key differences between marketing and advertising?

    Understanding the role advertising plays in the marketing mix will help business owners define their promotional strategies ... Read Answer >>
  2. How important is advertising revenue in the Internet sector?

    Learn about the importance of advertising revenue in the Internet industry. Find out how much Internet firms rely on advertising ... Read Answer >>
  3. What are some of the ways that a company can improve its brand equity?

    Learn why brand equity is so valuable in business. These strategies for gaining high exposure and a great reputation will ... Read Answer >>
  4. Why is the Mass Index important for traders and analysts?

    Discover Donald Dorsey's mass index, a smoothed volatility indicator that forecasts price reversals based on increases in ... Read Answer >>
  5. Why would I need to know how many outstanding shares the shareholders have?

    Find out why shareholders should know how many outstanding shares have been issued by a corporation, and learn what happens ... Read Answer >>
  6. How do Internet companies profit if they give away their services for free?

    Learn how companies in the Internet sector make a profit when service, content and user applications are offered at no cost ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center