Online WOM shapes purchases

02 December 2010

NEW YORK: Online word of mouth is increasingly influencing purchase decisions for "big-ticket items" in the automotive and electronics categories, according to a study.

Market research firm S Radoff Associates surveyed 1,000 adults to assess the role of peer-to-peer recommendation.

It found 50% of respondents who had bought a car in the last year believed WOM at least partly shaped their choice, a figure reaching 49% concerning technology and electronics.

For the second of these sectors, web-based and offline information were afforded an equal rating in terms of persuasiveness, both scoring 29%.

User-generated reviews on the internet possessed the greatest force among social sources, featuring in 25% of electronics acquisitions during the last 12 months.

Such a trend was most pronounced in relation to smartphones, video cameras and sound systems, the study revealed.

The opinions of netizens recorded in this way held a lesser prominence when considering auto marques, sliding to 17% overall.

However, 21% of consumers looking for new vehicles agreed social media contributed to their selection, compared with just 5% awarding traditional channels a similar status.

These totals stood at 26% and 7% respectively regarding technology, suggesting platforms like Facebook and Twitter are key to the commercial future.

"While offline word of mouth plays a significant role in large-ticket item purchases, the impact of online word of mouth from consumer reviews, blogs and social networks has consistently increased over the past five years," said Sandy Radoff, president, S Radoff Associates.

"Those that can secure authentic positive reviews from their customers, will have a clear advantage. They will get higher returns on their marketing dollars."

Ford has recently rolled out a competition on Facebook, asking members to choose the official name of its Mustang V6 Performance Package.

"We're utilising the power of social media to not only talk about what a fantastic package this is, but to also let Mustang fans across the country share a piece of it," said Brian McClary, Ford's social and emerging media specialist.

"It's a nontraditional approach to naming a piece of [the] brand that millions of people identify with."

General Motors is another carmaker leveraging social networks, with the ultimate aim of ascertaining the extent to which this drives revenues.

"I'd love to be able to track that back to actual sales," said Christopher Barger, GM's global director of social media.

"We're selling cars here. Being able to demonstrably prove that social media actually sells cars would be great."

Elsewhere, electronics retailer Best Buy has been an early adopter on social media and across the web more generally.

"It's striking how central the internet has become in our lives since those days. People want the information; they want the services; they want the entertainment and the connection," said ceo Brian Dunn.

"Even during the worst part of the recession, customers were buying digital devices at Best Buy - that business continued to grow at a double-digit rate."

Data sourced from S Radoff Associates; additional content by Warc staff