According to the Adotas website, a NYU study revealed on February 7th, 2008 concluded that viral marketing is economically effective marketing strategy.
NYU's Stern School of Business professor Vasant Dhar, along with NYU student Elaine Chang, released their study in a research paper titled "Chatter Does Matter." In the first few months of 2007, the researchers followed a sample of 108 albums four weeks before and after their release and tracked the amount of online chatter in blogs, social networking sites, and other online communication tools, and measured their amount of influence on each album's success. This is the first study of its kind to measure the economic influence of viral marketing on the music industry. Dhar, who specializes in the strategic implications of information technology, found that the amount of blog posts regarding an album prior to its release significantly and positively affects the album's success.
The study revealed other results, which can be found in NYU's faculty archive. Dhar and Chang also found that social networking sites have an impact on the popularity and financial success of an album; the amount of "friends" a recording artist accumulates week-to-week on the social networking site MySpace prior to the album's release has a weaker, yet still positive correlation to the artist's album's success. Lastly, the study reaffirmed the traditional promotional tactics; albums released by larger, mainstream record labels and are reviewed by well-known publications such as Rolling Stones will tend to have significantly higher record sales.
Dhar and Chang's work has a significant influence on the marketing industry as a whole, especially for the music marketing industry. The World Wide Web is like having an entire population at your fingertips; by looking at the amount of online reception regarding an artist's upcoming album, music executives can now predict how successful the album will be.
Just another step in discovering the potential that the internet has for the marketing industry... it's a regular buzz machine.
The entire research paper on the study can be found here.