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BizReport : Research : June 12, 2009

Marketers shifting to online WOM but are consumers?

Hoping to cash in on the social networking craze sweeping around the globe, many marketers are pushing advertising budgets into social areas, hoping to cash in on online word-of-mouth (WOM) advertising. Marketers hope this will help them build brand, but will it?

by Kristina Knight

According to the Association of National Advertisers (ANA) Brand Building Survey more than 40% of marketers are planning to increase their social networking/WOM efforts when the recession ends.

"The landscape for building brands was jolted by the severity of the economic downturn," said Bob Liodice, President and CEO of the ANA. "However, it is encouraging to see that marketers are preparing for the rebound with plans for increased media spending, strategically sound brand building investments and logical, expansive use of social media."

But is this a good idea? In theory it makes sense for marketers to push more dollars into the social space, but from a consumer standpoint this may not have as big an effect as brands are hoping for. Why?

Research from Mintel indicates that offline WOM still trumps online for most consumers. After surveying a group of consumers, researchers found that 34% reported buying a product from a friend's recommendation but only 5% reported buying a product based on an online recommendation.

This doesn't mean that online WOM, display and social network advertising aren't working; likely they are simple working differently. It is most likely that these online efforts are impacting consumers by making them more aware of products, brands and services, but consumers are still most likely to listen to the advice and recommendations of their offline friends than they are in reading product reviews or trusting a 'friend' from an online network.

Tags: Association of National Advertisers, Mintel, online advertising, online marketing, social marketing, social networking, WOM, word of mouth

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