Nielsen marketing researchers conducted a global survey recently to find out which of the advertising platforms in use today, including new media technologies, are most trusted by consumers. Since marketers have increasingly powerful tools they can utilize to reach the consumer, why not get a reading on how they are performing? Even more importantly, why not measure consumer trust in various forms of advertising media?
Nielsen does just that, twice per year, among 26,000+ consumers in 47 global consumer markets. The company’s research is well-compiled within a new and concise report, and I urge marketers to read it since Nielsen is willing to share this valuable information.
What emerged from the survey was very revealing: while traditional media still makes its mark on consumers, the most powerful determinant behind purchasing decisions for a whopping 78% of respondents is word of mouth.
Yes. Recommendations from trusted sources, such as family members and friends, carries the most weight with consumers. And while WOM and all forms of advertising media impact vary from region to region, and country to country, the aggregate totals are very telling. By the way, the report also takes pains to break down the information further, by continent and even by country.
Another important fact emerges, also: new Internet-based media platforms may still lag behind traditional advertising media, but the gap is narrowing. However, respondents clearly show that traditional advertising still retains consumer trust.
Here are the aggregate rankings among the 13 advertising categories consumers were polled about:
1. Word of mouth recommendations, 78%
2. Newspaper advertising, 63%
3. Consumer opinions posted online, 61%
4. Brand websites, 60%
5. Magazines, 56%
6. Television, 56%
7. Radio, 54%
8. E-mail, 49%
9. Brand sponsorships, 49%
10. Ads before movies, 38%
11. Search engine ads, 34%
12. Online banner ads, 26%
13. Mobile phone text ads, 18%
The most compelling statements in the report were these by David McCallum, Nielsen’s Customized Services’ global managing director, when he stated: “Furthermore, given that nothing travels faster than bad news–with estimates that reports of bad experiences outnumber good service reports by as many as 5:1–the importance of responsive, high quality customer service is yet again highlighted.”
Proof once again that advertising efforts all combine to get the consumer’s attention, but WOM, good or bad, has the power to sway and influence in a far deeper way.
So, how important is it to engage the consumer, and to deliver consistently good experiences? It might be as important as brand and corporate survival in an increasingly competitive marketplace. . . one in which consumers are increasingly exchanging information with each other.
There’s one big caveat with any research like this, though; self-reported “trust” is not the same thing as actual influence or effectiveness. People have a bias toward telling you that they do not trust advertising or make decisions on it, because they don’t like to think they do – it makes them sound like they’re naive or easily manipulated.
That doesn’t mean that said advertising is not having an effect.
Which doesn’t take anything away from the obvious power of WOM; my point is simply that you have to approach this kind of self-reporting with some skepticism.
Hi John,
You’re right, of course. The title on my post was set up to grab some attention. If you look at the numbers you’ll see that conventional advertising is still very important and that non-traditional, Internet-based forms of advertising are catching up. And, yes, we know there is some margin for error in all polls that are taken. The point here is that WOM is still crucial to marketing success. All the more reason why companies have to walk the walk and not just talk the talk. Customer service is critical to success; since everybody’s talking, what would companies prefer to have circulating out there–good news or bad news?
Thanks for weighing in with some great points, John.
Ted, do you know if they broke down newspaper advertising into business (ex:WSJ, Financial Times) vs something like Cleveland Plain Dealer? It seems interesting to me that newspaper came second after WOM…
Hi Paul,
Good question. From what I saw on the Nielsen site, I’d have to reply that the newspaper advertising data was not broken down in that manner. . .unless Nielsen has a more detailed, compiled report available for sale that I am unaware of. It is interesting to see the relative power of newspaper advertising, and while it probably has less power here, remember that this data is an aggregate from many countries on all continents, so that might skew things a bit.
For the reasons John articulated, this kind of research should be taken with a grain of salt. I certainly agree with your comments on the importance of WOM, but the research itself is probably not worth much attention. Not sure what the indicated action would be for an advertiser. Self-reported “trust” isn’t exactly something you can take to the bank.
Michael,
Agreed. All research taken in this manner has to be weighed. However, AC Nielsen is quite respected and respectable and I would take their data more seriously than that which comes from other researchers.
And I noticed that #3 was consumer opinions posted online. I would guess that the WOM figure is greatly being boosted by online WOM as well.
I would have to say that WOM is part of the equation but it would help if they have heard of you before. I guess we all know that.
They’ve seen your ads, PR, etc., so that builds up some brand recognition. You overlay WOM and you have the sale.
Mack,
Right, and it’s important to note that. Nielsen took great pains to state in their report findings that Internet generated advertising and WOM was beginning to catch up. . .especially in North America, Asia and Europe.
Thanks for pointing this out, Mack.
Great insight, Neil. While WOM has great power, one would think it works best in tandem with advertising and other marketing initiatives. Thanks for adding another dimension to this conversation, Neil.
Wouldn’t you all be surprised if Word-Of-Mouth *wasn’t* the most important self-reported factor?
What’s shocking to me is that newspaper advertising ever-so-slightly trumps consumer opinions posted online. That means people are more willing to listen to an ad in a newspaper than they are to other consumers online.
That’s pretty amazing.
I wonder if it’s because there’s still a trust of newspapers, a feeling that there’s some sort of higher standard for the ads that run in there.
Thoughts?
Well, we are only now making our first forays into traditional advertising for just this reason.
We do very well getting leads and converting them through Google organic search and AdWords, etc., but we want more brand recognition. We don’t feel we can do that without more advertising and PR, frankly.
We realize it is not all about generating and converting leads. We no the drill on that but that has its limits. We realize we need to build our brand.
BTW, I was responding to Ted’s thing about things working in tandem. Sorry about my habit of double posting. I need to think things through.
We have WOM, search engine marketing, advertising, and PR. I think these things have a synergistic effect.
That is why we are now making our first forays into traditional advertising.
Hi Toad,
“Wouldn’t you all be surprised if Word-Of-Mouth *wasn’t* the most important self-reported factor?”
Actually, I think quite a few of us might be. I mean, the endorsement of family members and friends usually carries a lot of weight with most people. Online consumer opinions are sometimes pretty anonymous. Some people probably wonder whether some folks just post things behind an anonymous made-up name and an equally made-up comments. Just throwing this out for discussion. . .
Thanks for weighing in, Toad. You always have great things to say.
Neil,
I like your statement:
“We have WOM, search engine marketing, advertising, and PR. I think these things have a synergistic effect.”
The thing marketers have to increasingly grapple with is this, in my opinion: with so many new tools at their disposal, what is the optimum marketing mix for their companies? And how should they reallocate some of their traditional advertising dollars into new Internet media? Of course, those questions have always existed, but with the explosion of new Internet based options, it seems to be tougher than ever. And there’s still a sense of “wait and see” among many companies out there, it seems.
By we have, I mean we as marketers. I don’t think our company yet uses these all to full effect by any means! We are working on it, though.
Ted,
First I want to say I find the data useful, informative and worth sharing. Thank you!
Next, Neil, I hope that you are using an integrated strategies and not just venturing forth with tools. Everything needs to work together to achieve the end goal(s).
Finally, I agree with Toad about WOM. It is only natural that it would create the largest impression as it results from all the other marketing tools listed.
The global survey’s goal was designed to find out which of the advertising platforms in use today consumers most trust. Since we consumers don’t live in caves, we are influenced by all forms of marketing, consciously and subconsciously.
At the end of the day, if I am looking for a car and my cousin recommends Toyota, sure I trust him. But that trust is not only a result of our relationship but of all the things I have read, heard and seen regarding Toyota.
In any survey such as this, WOM will lead the way. But it really is the integrated marketing platform that wins, not an individual tool.
Lewis,
Thanks for the many pearls of wisdom in your comments.
We’re talking about all of these tools and tactics today, all the while assuming strategies are in place. Never assume anything, right?
You’re so right, Lewis. Thanks for weighing in.
I agree that it’s very important to try to engage customers, but I think the more important step is to then listen to them. WOM can drive sales, but there is also so much untapped information that can be gained from listening to customers’ WOM interactions … for companies, taking the time to listen to customers’ interactions can lead to insights useful for all kinds of line-of-business initiatives. If we’re talking about using various forms of advertising, all working together to reach customers, why not use information directly from customers’ interactions to help create compelling ads in more traditional mediums?
Lewis,
I didn’t say we were just venturing forth with tools. I agree that an integrated approach is the right way to do it.
I agree that it’s very important to try to engage customers, but I think the more important step is to then listen to them. WOM can drive sales, but there is also so much untapped information that can be gained from listening to customers’ WOM interactions … for companies, taking the time to listen to customers’ interactions can lead to insights useful for all kinds of line-of-business initiatives. If we’re talking about using various forms of advertising, all working together to reach customers, why not use information directly from customers’ interactions to help create compelling ads in more traditional mediums?
Dan,
“. . .there is also so much untapped information that can be gained from listening to customers’ WOM interactions … for companies, taking the time to listen to customers’ interactions can lead to insights useful for all kinds of line-of-business initiatives.”
You must be referring to customers’ online comments–those kinds of WOM interactions? If you do, sure, that makes sense. That’s why so many companies are setting up blogs and other Internet media. That’s why it’s so important for companies that do, to allow their customers to feel free to express their opinions, good and bad. . .as has been stated so often on this site. Although, as I cautioned before, some people may be posting legitimate comments and some may be posting made-up comments. Still, an overall picture can emerge that ought to be helpful to dedicated marketers.
Thanks for adding to the conversation, Dan. I appreciate your comments.
Dan,
Your idea is interesting but what do you mean exactly by listening to the WOM interaction and how?
There is untapped WOM occurring online in places like social networks, blogs and forums. There also exists the tools to create these resources for customers and mine existing locations for topics and products that relate to a companies brand. If customers have an environment that attracts other like-minded consumers, they can start having conversations and building a network of “trusted” fellow customers. With this type of consumer-to-consumer communication, fake comments are far less likely to occur than in communication to the company directly
Where is the Yellow Pages in this data? I would like to know where this media fits in there.
Ted – you hit it just right. The goal is to deliver consistently good experiences.
While John has a great point, we have to step back and look at what it is about a product or service that makes one person put his reputation on the line to recommend it to another.
It isn’t (usually) because the company had a great ad, but an ad may have been part of an awareness building campaign, without which the product may have never been used.
Ads aren’t the only way to build awareness, obviously, and although we understand the biases we might miss because of a tendency of users to identify themselves incorrectly, the one thing we can agree on is that if the product or service is bad, word of mouth will be decidedly negative. No advertising campaign across infinite media will make it right. Turning the experience around, even when it has gone bad, at least has a chance to recapture the consumer’s love.
I think there is an urgent need of applying all technology that exists today from smart cards to internet and issue WOM identification number to few customers first and let them propogate word of mouth media so that every consumer start getting the value out of their power of wor of mouth marketing. I have developed a fool proof system by which this can be done I invite individuals and companies to share their thoughts after understanding my idea thoroughly
Dan,
Thanks for taking the time to fully explain what you meant in your first comment. What you say makes sense to me. I’m sure Neil will also appreciate your explanation.
I agree that consumer forums can be mined for great information, and as you state, especially when customers are talking with one another, and not necessarily just interfacing with companies. Still, from time to time, bogus comments might be made. No matter where we glean our research, we as marketers have to sort the wheat from the chaff, don’t we?
No, David, yellow page ads were not factored into this study, from what I could gather.
Great insights, Cam, and more fully explained than what I’ve said in my previous comments. I quite agree with you. Advertising may build brand awareness, but customer experience is a deciding factor in attaching positives or negatives to those brands. Thanks for weighting in, Cam. I appreciate your well-articulated views.
Saurabh,
It sounds as though you’ve developed an interesting methodology. Please do feel free to share it with Daily Fix readers. Marketers are always interested in hearing about other marketers’ methods that have met with success.
You state that marketers should use all of the technology available to them today. Many are grappling with this as they try to pick the appropriate mix of tactics (thanks, Lewis) with the appropriate budget allocations. This is not an easy task.
Thanks for adding to this conversation, Saurabh.
So you are saying you should monitor what is being said out there about you? Good.
But what beyond that? I guess I am not quite getting what this is about beyond monitoring the Web. I am fascinated by this but not quite grasping it.
Neil,
What Dan is saying is that tapping into consumer exchanges and assessing what they are saying can and should lead to actionable results. I’ve read that Dell’s blog enabled the company to make some changes to some of their computers based on customer conversations, giving them more of the features they wanted or were looking for, for example. What I believe Dan means is that collecting WOM information alone isn’t sufficient; the whole point is to use that info and act on it.
I think its obvious now a days to include word-of-mouth as an objective of advertising. Its just that Internet based ad activities are more equipped to become viral and hence the direct connection to word of mouth. But the research cannot explicitly state as to how much of the WOM was actually because of the advertising itself.
One might recall that when Sony launched its walkman, it made some people jog in the morning wearing the plugs in the ear. WOM was induced into the promotion. Traditional advertising has less opportunities of inducing a similar WOM.
I think the research should if at all anything, make marketers aware of how WOM can be induced rather than being a passive observers of the outcome of a negative WOM.
Pramod,
Great observation. WOM can indeed spread like wildfire when companies conduct real-life research, by putting their new products into consumers’ hands and hearing their reactions first-hand. These test subjects will then spread the word to everyone they know: let’s just hope they can say positive things, rather than negative.
Thanks for adding more to this conversatin, Pramod. I appreciate it.
I think you need to advertise first to get the customers for word of mouth recommendations…
Yes, Marcel, that seems like a reasonable opinion.
I think myself a recommendation has more resonance for me if I have heard of the brand. If someone recommends something I have never heard of I am less likely to act on WOM.
For example, I recently was in the market for road bicycle. There are several small chains in my town that sell bikes. Someone recommended one of them. I took the recommendation and bought a bike in part because of the recommendation but in part because I new the brand through its PR and advertising efforts.
It was not like I said “who?” when she recommended a certain store. I said, those guys are the best? Well, I am not surprised to hear that.
And come to think of it the brand of bike itself was also a combination of marketing and WOM.
Someone recommended the bike brand but I already new the brand through their marketing — mostly PR in this case. They had a reputation for well made, fast bikes.
I was ready to buy when I walked in the store. The sales person had it easy in this because of the marketing of the store and the marketing of the bike brand worked in synergy with WOM.
I walked in and said I want this bike and I was 100% sure it is what I wanted by that time.
Marcel,
Agreed. As several have pointed out in this conversation, it’s important to generate brand awareness through advertising. Word of mouth really kicks in when a number of people have experienced the brand for themselves; and those experiences can be positive (we hope) or negative.
As Neil points out in his example of purchasing a bike, word of mouth helps “sell” consumers. WOM builds their confidence in a brand, and their expectations that they too, will have a positive experience if they purchase the brand, as well.
Thanks for your observations, Marcel and Neil.
Ted,
The bottom line: the relentless decline in paid advertising effectiveness continues. This is the elephant in the room that few in the industry want to talk about. Thank you for confronting the truth. Despite all the caveats in the replies above, we at Prism Ltd believe conventional ads are unlikely to be the primary purchase engine of the future. A S Prisant,COO,Prism Ltd.
Damn, and our company just spent some money on elephants in the room. I hope they do something for us.
Hi Alexander,
You’re right in your observation. Many large companies hedge their bets and continue to advertise in traditional venues. Having said that, they are also cutting into those spends to include online and newer ways to reach consumers. The marketplace is so segmented and fragmented today, that it’s ever more challenging for marketers to reach–and engage–their target audiences. Thanks for adding your observations to this conversation, Alex.
Isn’t there targeted advertising?
Not all advertising is for a mass, undifferentiated audience.
Maybe a distinction needs to be made.
Yes, Neil, I agree that marketers have always used advertising to reach target audiences. The difference today is that those target audiences are more sophisticated than ever; they’re also moving targets. . .harder to reach and engage now than ever. That’s why experimentation with Internet advertising, social media, blogs, among other tactics, is vital to reach consumers. It’s no easy task to find the right mix and it’s different for every company. Thanks for helping to clarify this point, Neil.
You did good job. you find out advertising platforms in use today, including new media technologies. i accept, power tool is very important for customer.
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jillcatrina
Email marketing
Thanks, Jill, for the kind words. As you pointed out, new media offers additional tools marketers can use to reach consumers. When balanced with a multi-platform communications approach, it has the power to reach today’s consumers where they are. In that regard, the use of conventional advertising and media alone, is not sufficient. When consumers are moved by brands, their word of mouth interactions have the power to move friends to those brands as well.
Thanks, Jill.