Profiling your customers

Nielsen survey says… Word-of-mouth is most credible source of advertising

Eighty-four percent of consumers around the world say they trust word-of-mouth recommendations from friends and family—known as earned media—above all other sources of advertising, according to a new study from Nielsen, a New York-based provider of information and insights into what consumers watch and buy. Trust in word-of-mouth recommendations has increased 6 percentage points since 2007.

The Nielsen Global Survey of Trust in Advertising, which polled more than 29,000 consumers in 58 countries, also found that owned advertising—content and messaging controlled by a brand—was the second most trusted advertising source in 2013, with 69% of respondents indicating they trust this platform, up 9 percentage points from a fourth-place ranking in 2007.

Sixty-eight percent of global respondents said they trust consumer opinions posted online, which ranked third in 2013 and was up 7 percentage points from 2007.

“Brand marketers should be especially encouraged to find owned advertising among the most trusted marketing formats,” says Randall Beard, global head of advertiser solutions at Nielsen. “This emphasizes the notion that marketers maintain the ability to control the messages about their brands in a way that consumers consider credible. This perceived credibility is a key component in advertising effectiveness.”

Traditional ads still strong

But don’t cancel your broadcast and print advertising contracts yet. Nielsen’s findings show that ads on television and in newspapers and magazines continue to be among the most trusted forms of paid advertising. Trust in television ads increased from 56% in 2007 to 62% in 2013, while 60% of respondents trusted ads in magazines, an increase of 4 percentage points from 2007. Newspaper ads were the only format to decline—61% of consumers surveyed found newspaper ads credible, down from 63% in 2007.

More trust in online, mobile ads

More than half (56%) of respondents said they trust consumer-consented email messages, an increase of 7 percentage points since 2007. For other online advertising, almost half (48%) trusted ads in search engine results, online videos and social networks. More than four in 10 (42%) trusted online banner ads, up from 26% in 2007—a form that is increasing steadily in ad dollars spent, with 26% growth in the first quarter of 2013.

Forty-five percent of respondents in Nielsen’s 2013 survey believed display ads on mobile phones were credible, and 37% trusted text ads on mobile phones, up from 18% in 2007.

“With Internet ad spending reporting double-digit growth, advertisers are exhibiting growing confidence in these formats—or at least a willingness to make an investment,” Beard says. “While companies may be unable to directly control the messages in earned media, such as consumer opinions posted online, they have the ability to create a positive presence for their brands on these channels.”