Online Brand Buzz is Mainly Hype, Claims Report

31 October 2006

LONDON: Few marketers would disagree that old fashioned word-of-mouth recommendation is highly influential in creating brand demand and informing the decisions of those actively shopping for a brand.

However, the 'word-of-mouth' effect is notably less powerful when artificially created online, according to a report released today (Tuesday) by WPP Group research agency Millward Brown.

It not only challenges the relentless hype propagated by online lobbyists, but also indirectly calls into question the commercial wisdom of several recent, massively expensive acquisitions made by global media giants.

A study of consumer attitudes to brand advocacy, conducted among 1,000 consumers in the USA and a similar number in the UK, refutes a widespread belief among marketers that that blogs and viral marketing are vital components in an effective communications mix.

Such a belief is not supported by the survey data, which reveals that relatively few people (11 % in the US and 10 % in the UK) use informal sources of online information - such as chat rooms, blogs, online message boards and online contacts - to guide their purchase decisions.

Instead, an overwhelming majority of shoppers (74% in the US and 63 % in the UK) turn to friends, neighbours and colleagues for advice.

In both countries, personal opinions are considered to be 'very convincing' - more so than online sources (57 % in the US and 52% in the UK), an impact that only narrowly betters company-led communications like websites and salespeople.

In terms of the relevance of the information obtained, online sources are ranked lowest of all (34% in the USA and 45 % in the UK) and are most likely to be disregarded when deciding what brand to select.

Observes Fergus Hampton of Millward Brown Precis: "In the past eighteen months, there has been a tremendous amount of hype about digital networking, blogs and consumer-to-consumer communication facilitated by the internet and the power of these channels to make or break brands.

"Our study shows clearly that personal contacts such as family, friends/neighbours, and colleagues are still a much stronger influence on brand choice. This is as true for big ticket items such as holiday destinations, digital cameras, mobile phones and cars as it is for everyday purchases such as toilet cleaners and cold and flu remedies."

Data sourced from Millward Brown; additional content by WARC staff