Wednesday, November 09, 2005

Consumer-Generated Media Exceeds Traditional Advertising for Influencing Consumer Behavior, Finds Intelliseek Study

Consumer-Generated Media Exceeds Traditional Advertising for Influencing Consumer Behavior, Finds Intelliseek Study

Consumers 50% more likely to be influenced by word-of-mouth behavior than radio/TV ads, says 2005 Intelliseek research of consumer behavior

CINCINNATI, Ohio (Sept. 26, 2005) -- Consumer trust toward traditional advertising is being challenged by growing confidence in consumer-generated-media (CGM) and the recommendations of other consumers, according to a new study of consumer behavior by Intelliseek Inc., a leader in word-of-mouth measurement.

A follow-up to a 2004 "Trust in Advertising" study, the "2005 Consumer-Generated Media (CGM) and Engagement Study" finds that, compared to traditional advertising, word-of-mouth (WOM) behavior continues to grow in importance in consumer awareness, trial, and purchase of new products.

Consumers are 50 percent more likely to be influenced by word-of-mouth recommendations from their peers than by radio/TV ads – a slightly higher level of influence/trust than found in the 2004 study co-authored by Intelliseek and Forrester.

Intelliseek's research also finds important correlations between consumers who regularly skip over or delete television or online ads and those who shape, create, and absorb consumer-generated media (defined as experiences, opinions and advice posted on the Internet by consumers for others to read and share). "Active ad skippers," for example, are 25 percent more likely to create and respond to CGM on Internet message boards, forums and blogs.

Advertising/marketing implications
Key findings from the research will be presented by Intelliseek CEO Mike Nazzaro during Advertising Week events this week in New York City, including OMMA and the Word-of-Mouth Marketing Association (WOMMA) conferences. Additional phases of the research will be released in October and November, respectively.

"The advertising landscape is changing, forcing marketers to broaden and redefine the concepts of media, influence and audience reach," said Nazzaro. "If consumer-generated media is in fact the most effective and trusted form of advertising, it's critical that marketers begin to measure, manage and influence it and, equally importantly, heed the consequences when consumers turn the message against brands."

Key findings from the analysis:
During August 2005, Intelliseek polled a representative online sample of 660 online consumers and explored attitudes and opinions across key CGM venues, including Internet message boards, forums, blogs, direct company feedback and offline conversation.

Word-of-mouth behavior among "familiars" trumps all forms of advertising and is more trusted than news or "expert commentary," the study finds. In addition, positive word-of-mouth from a personal acquaintance carries just as much impact as negative word-of-mouth. This has "critical implications for brands that nurture evangelism, brand loyalty, and advocacy," Nazzaro said.

Interestingly, WOM/CGM has more impact on consumer attitudes about products than positive or negative news coverage.

Sample Question:

To what degree would your decision to purchase a product or service be influenced by:
Positive word of mouht from someone you knew personally7.7134
Negative word of mouth from someone you knew personally7.0121
A negative news story on TV or radi or in a newspaper or magazine5.799
A TV or radio commercial4.782
An advertisement in a newspaper or magazine4.680
*100 represents the average score

Public comments by employees also carry important credibility compared to traditional ad vehicles, a point underscored in a recently published white paper on employee blogging by Intelliseek and Edelman.

Other Key Findings

  • Attitudes of Ad-Skippers: While fewer than 20 percent indicated they use or own digital video recorders or TiVo-like services that permit ad skipping, a majority of respondents indicated that they "deliberately skip over advertising on the television." In addition, "ad skippers" are more likely to learn about new product trends and brands than consumers who do not regularly skip ads. They are 25 percent more likely to want to "create a dialogue" with others on Internet message boards and forums, especially to learn new information and have questions answered.
  • Teens and CGM: Teens lead all segments in overall CGM creation but remain more trusting of advertisers. Nearly 30 percent of teens now actively create CGM by sending photos via their cell phones, 45 percent have experimented with or created a blog, and nearly 10 percent subscribe to RSS feeds.
  • Bloggers vs. Non-Bloggers: Bloggers create an enormous amount of CGM across numerous sources, elevating their overall influence, the study finds.
  • Women vs. Men: Men are more likely to spend time on Internet message boards, forums, and discussions, while women expressed a higher tendency to "forward something (they) had found on the Internet to others," especially "things like scams or computer viruses." About equal numbers of men and women create blogs.
  • Total Recommendations on the Web: Consumers are on track to post close to 2 billion comments on the Internet by the end of 2005, a significant increase over the previous year, according to Intelliseek estimates.
  • Key Industries Susceptible to CGM Impact: Health/medical, auto, electronics, video games and music categories have the greatest likelihood of being influenced by CGM.
  • Negative reaction to Shill Marketing: Intelliseek's research also looked closely at consumer attitudes toward artificial buzz or so-called "shill" marketing, in which consumers are paid or offered incentives to recommend products or brands. One-third would be disappointed if a trusted contact did not carefully disclose a paid or incentive-based relationship, 26 percent said they would never trust the opinion of that friend again, and 30 percent said they would be less likely to buy a product/service.

"Trust is the currency of effective advertising, but it's highly fragile," explained Pete Blackshaw, Intelliseek's Chief Marketing Officer who oversaw the study.

Study background
The full 2005 Intelliseek Consumer Generated Media (CGM) and Engagement Study, including cross-tabulated data, breakouts and recommendations, will be available for purchase in early November. Companies or interested parties can pre-order it from the
Intelliseek web site. Blackshaw and Nazzaro will co-lead an Oct. 26 webinar to review the findings and will discuss them in early November at Ad:Tech New York.

Media contact: 513-618-6716

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