Word of mouth beats ads in US and China

17 May 2010

BEIJING: Consumers in China and the US place more importance on word of mouth than advertising when making purchase decisions, a new study has revealed.

Jack Morton Worldwide, the agency, surveyed 1,800 adults in China and America in order to establish which factors determined their buying behaviour.

When learning about brands, advertising, either via traditional or digital media, received a score of 45% in the US compared with 39% in China.

By contrast, word of mouth from friends and family was afforded a greater level of primacy in China on 48%, a figure that fell to 43% for their American counterparts.

However, observing other people using a product was given the most weight in China overall, having been mentioned by 52% of the panel in the country, measured against 30% in the US.

This result is mainly attributable to the constant stream of new offerings being made available in China, which leads to considerable uncertainty among many consumers.

Online research delivered a total of 28% in the US, 11% higher than in China, while 24% of respondents in both nations regarded browsing on company websites as being a key source of insight.

In-store marketing posted an average of 28%, with promotion and sponsorship on 25%, although both of these channels were 3% more popular in China.

News media was also given extra value as a supplier of information in China than the US, on 27% and 12% in turn, ratings that stood at 13% and 8% respectively for emails and texts offering discounts.

When it came to actually making purchases, a plurality of participants in both China and the US stated that the opinions of their friends and family played an integral role.

Once again, seeing other people using a brand was pre-eminent in China on 64%, and online research and promotion/sponsorship were also referenced by around a third of the sample.

In the US, 49% of people reported that the findings from online research exerted an influence at the "moment of truth", with promotion and sponsorship on 42%, as were product reviews by experts.

Elsewhere, advertising was only given a rating of 32% in the US and 21% in China at the final stage of the purchase process.

Jack Morton Worldwide's study concluded that brand owners must understand their customers are "smart" and make decisions based on a range of emotional, sensory and rational drivers.

Manufacturers that are able to create "moments of dialogue" and ensure that each interaction with their target audience is an "experience" will successfully build loyalty over the long term, it added.

Data sourced from Jack Morton Worldwide; additional content by Warc staff