Monday, October 1, 2007

Consumers' word is best advertisement, survey shows

Among U.S. consumers, the word most closely associated with advertising is "false."

That disquieting finding - for marketers, at least - comes from a trawl of blogs, social-networking services and other online discussion forums by Nielsen BuzzMetrics, which measures consumers' brand perceptions on the Internet.

The word association project was carried out in conjunction with a broader survey by Nielsen of consumer attitudes toward advertising in 47 countries. That study showed that consumers typically place more trust in recommendations from other consumers than in other advertising.

"The advertising industry has to do better work, and it has to do a better job at communicating the value it brings to consumers," said Jonathan Carson, co-founder of BuzzMetrics, which is part of the market research company Nielsen.

The picture is not all doom and gloom for marketers or for media owners reliant on advertising, however. The study showed, for instance, that consumers in developing markets still have relatively high levels of trust in advertising, even if their counterparts in developed countries are more cynical. In the Philippines and Brazil, for instance, 67 percent of consumers said they generally trusted advertising.

The Danes, by contrast, appear to be a skeptical bunch, with only 28 percent saying they trusted advertising. Many other European nationalities were also at, or near, the bottom of the list, though Americans still appeared relatively trusting, at 55 percent.

That is good news for the advertising economy, because much of the growth in ad spending is expected to come from developing markets in coming years. While marketers in developed countries worry that consumers are recoiling from advertising, such concerns do not appear to be an issue yet in places like Brazil.

"Advertising is newer in those markets, so the cynicism hasn't built up yet," said Carson, of Buzzmetrics. "In developing markets, advertising is seen more as a conveyor of useful information. In more developed markets, people don't need it to play that role. They have too much information already."

Even in developed markets, some media still appear to benefit from relatively high levels of trust. Newspaper advertising, for instance, is trusted by 63 percent of consumers, according to the survey, with North Americans and Latin Americans particularly showing faith in it. Only half of the respondents in Eastern Europe, the Middle East and Africa said they trusted newspaper ads.

Television also did relatively well, with 56 percent of respondents worldwide saying they trusted it. Consumers in Latin America, where television shows featuring the best ads are a staple of prime-time schedules, were particularly well disposed toward television spots; Europeans less so.

Consumers appear to be wary about some new kinds of advertising, despite - or, perhaps, because of - the rampant growth in online advertising and other digital marketing. The format that fared worst, with only 18 percent of respondents saying they trusted it, was advertising in cellphone text messages, which in many countries can be done only if a marketer has obtained consumer permission.

Online banner ads and ads sold by search engines also fared poorly.

"The positive thing about these new digital channels is that they are extremely scalable," Carson said. "You can get a very high reach at a low cost, compared with traditional media. But it's tempting to abuse it."

If consumers are turned off by some kinds of digital advertising, like text messages, pop-ups or banners, that may explain digital marketers' eagerness to work indirectly, through blogs, social networks and other kinds of online forums. Of all survey respondents, for instance, 61 percent said they trusted consumer opinions posted online.

But even more consumers, 78 percent, said they trusted direct recommendations from other consumers: what marketers call word of mouth. And unlike some of the media, consumer recommendations scored highly across all markets. Everywhere, it seems, people still trust their friends.

Eric Pfanner can be reached at adcol@iht.com