Word-of-mouth works for consumers

09 July 2009

NEW YORK: Some 90% of consumers around the world trust recommendations from people they know when discussing brands, while 70% accord the same status to online consumer reviews, research from The Nielsen Company has found.

Based on a survey of 25,000 adults in 50 countries worldwide, Nielsen reports that online and offline word-of-mouth are regarded as being the "most trusted forms of advertising."

Jonathan Carson, international online president of The Nielsen Company, argued that the "explosion in consumer-generated media" means the importance of word-of-mouth "has increased significantly."

A further 70% of the research firm's panel said they trusted brand websites, with 69% agreeing with this statement in relation to editorial content, as did 64% for brand sponsorships, and 62% for TV.

Newspapers scored 61% on this measure, with magazines on 59%, outdoor and radio on 55%, and cinema advertising on 52%.

This figure fell to 41% for paid-for search, 37% for online video ads, 33% for banners and just 24% for commercially-based text messages sent to mobile phones.

Carson added that, with the exception of newspaper executions, "all forms of advertiser-led advertising ... have also experienced increases in levels of trust."

In evidence of this, Nielsen's study revealed that trust in newspaper ads had fallen by 2% between April 2007 and the same month this year. 

By contrast, television saw an improvement of 6% in this period, with search and banner ads up 7%, brand websites by 10%, cinema ads by 14%, and brand sponsorship by 15%.

Radio and magazines also registered upticks of 1% and 3% respectively over the two years analysed by Nielsen.

One reason for the increased level of confidence in advertising, Carson said, may be that the explosion in user-generated content has "forced advertisers to use a more realistic form of messaging that is grounded in the experience of consumers."

By region, consumers in China exhibited the highest level of trust in brand websites, with 82% of participants in the country responding positively to this form of communication.

This total reached 81% in Pakistan and 80% in Vietnam, compared to 62% of participants in the US, with Sweden, on 45%, and Israel, on 40%, the lowest-scoring nations in this area.

With regard to brand sponsorship, around 80% of contributors in Brazil, Colombia and Venezuela trusted this form of advertising, compared with 72% of Americans, while Sweden again posted the lowest total, on 33% in all.

Data sourced from The Nielsen Company; additional content by WARC staff