DEFINITION of 'Viral Marketing'

Internet advertising or marketing that spreads exponentially whenever a new user is added. Viral marketing assumes that as each new user starts using the service or product, the advertising will go to everyone with whom that user interacts.

BREAKING DOWN 'Viral Marketing'

An example of viral marketing is Hotmail, which offers free web-based email. Each time a user emails someone, there is an embedded advertisement to the recipient to sign up for a Hotmail account. While the practice was much more widely used in the early to mid-2000s as new internet businesses were being created in extreme numbers, it is still common among internet based business-to-consumer (B to C) companies.

RELATED TERMS
  1. Network Effect

    A phenomenon whereby a good or service becomes more valuable ...
  2. Viral Site

    A website that has become so popular that word of mouth and links ...
  3. Advertising Appropriation

    The portion of the total marketing budget that is allocated to ...
  4. Trickle-Down Effect

    A phenomenon where an advertisement is rapidly disseminated by ...
  5. Social Media Marketing (SMM)

    The use of social media websites and social networks to market ...
  6. Ad Blocking Software

    Ad blocking software removes advertisements from websites. Some ...
Related Articles
  1. Investing

    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.
  2. Small Business

    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

    Why Facebook Will Never Charge User Fees (FB)

    Understand why Facebook is unlikely to ever charge users; the site's business model of leveraging free users to charge advertisers is highly profitable.
  4. Small Business

    What Is Facebook’s Advantage Over Other Social Media? (FB)

    Discover the elements that define Facebook, which boasts 1.6 billion users who cement the company as the world's top social media outlet.
  5. Small Business

    Facebook Users Might Earn Money Via "Tip Jar" (FB)

    Facebook is considering a plan to allow users to earn money from its platform by using tipping jars and making sponsored posts.
  6. Investing

    This Hated Stock Could Soon Be Worth Twice As Much

    Shares of Twitter (NYSE:TWTR) have been slammed lately after weak user growth and an inability to monetize its platform led investors to question the future. The big move in shares of the 14 ...
  7. Small Business

    Trends And Growth In The Digital Advertising Industry

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

    Capitalizing on Mobile Advertising: Twitter Vs. Facebook Vs. Google

    Learn how Twitter, Facebook and Google are faring in the race to dominate mobile advertising, and discover the differing successes the three companies are having.
  9. Financial Advisor

    Twitter Vs. Facebook Vs. Instagram: Who Is the Target Audience? (TWTR, FB)

    Learn why Facebook, Twitter and Instagram each appeal to different target markets of the 1 billion users of social networks worldwide.
  10. Small Business

    Twitter Increases Character Count (TWTR)

    Twitter increased its character count for tweets this morning.
RELATED FAQS
  1. What countries represent the largest portion of the global Internet sector?

    Learn which countries are most likely to impact the growing Internet sector based on recent user growth and largest populations ... Read Answer >>
  2. 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 >>
  3. 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 >>
  4. What metrics are commonly used to evaluate companies in the internet sector?

    Discover the best metrics to evaluate Internet companies. Internet companies are unique in that their costs are low but potential ... Read Answer >>
  5. 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 >>
  6. What emerging markets are best positioned to benefit from growth in the Internet ...

    Explore which emerging markets are best positioned to benefit from the growth in the Internet sector. The sector continues ... Read Answer >>
Hot Definitions
  1. IRS Publication 970

    A document published by the Internal Revenue Service (IRS) that provides information on tax benefits available to students ...
  2. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  3. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  4. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  5. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  6. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
Trading Center