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. Markets

    Understanding Trickle-Down Economics

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

    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. Investing

    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. Investing

    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. Personal Finance

    How The Internet Web Ad Industry Works

    Over the past 10 years, advertising strategies have evolved as a result of technological development as the internet has provided new channels for advertisers to reach a larger audience.
  6. Investing

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

    Digital advertising has outgrown the internet.
  7. Investing

    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. Investing

    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
  9. Financial Advisor Technology

    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.
  10. Investing

    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.
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. What's the difference between the income effect and the price effect?

    Learn what the price effect is and how it is related to consumer spending. Learn what two components make up the price effect ... Read Answer >>
  5. 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 >>
  6. What is the rationale behind the effective interest rate?

    Read about the reasons why market actors identify the effective interest rate as it pertains to investing, lending and accounting. Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center