n. The promotion of a service or product by using existing customers to pass along a marketing pitch to friends, family, and colleagues.
1999
The best viral marketing is not just word-of-mouth, as some people carelessly assume. Nor is it multi-level marketing, where Juan sells to Alice and then gets a cut of whatever Alice sells to Fred. It is when users actively recruit other users, not for pay, but because they benefit from a larger user pool, just as virus DNA benefits from the spread of a virus.
1998
A recent check of newsgroups shows several postings to "comp.sys.ibm.pc.games" and "alt.food.cocacola" talking about the game and swapping tips and hints. Halloran calls this world-of-mouth buzz "viral marketing" since he hopes it'll spread that way.
1989 (earliest)
At Ernst & Whinney, when Macgregor initially put Macintosh SEs up against a set of Compaqs, the staff almost unanimously voted with their feet as long waiting lists developed for use of the Macintoshes. The Compaqs were all but idle. John Bownes of City Bank confirmed this. "It's viral marketing. You get one or two in and they spread throughout the company."
Why is this type of marketing "viral"? Probably because a biological virus replicates itself by invading a host cell and then using the cell's machinery to create new copies of the virus. So, analogously, a customer acts like a kind of "host cell" for a company's marketing message, and that customer is used to create new "copies" of the viral marketing message.