Wednesday, July 15, 2009

Putting Your Marketing Budget Where the Trust Is

The latest Nielsen Global Online Consumer Survey has been released, and it serves as yet another reminder of just how little consumers trust what brands and marketers tell them. The report should provide Social Media practitioners with further support for increased spending on Social Media, since it is clear the way for brands to earn trust is to get consumers talking to each other.

Just 55 percent of consumers have any degree of trust (defined by Nielsen as respondents indicating they "completely" or "somewhat" trust information) in the emails they sign up for, radio ads, and billboards. A slightly higher percentage--around 60 percent--trust the information they receive from advertising in magazines, in newspapers, and on television. Despite Federal law, enforced by the Federal Trade Commission, that requires advertising be truthful and fair, barely half of consumers trust what brands say in their marketing communications.

Traditional media fared pretty poorly in the Nielsen report, and some forms of online marketing scored even worse--far less than 50% of consumers expressed any degree of trust in search engine ads, banner ads, and text ads on cell phones. But the news was much better for Public Relations, Digital Marketing, and Social Media Marketing, because those are the areas in which consumers have the greatest level of trust. The four highest media for trust were:
  • Recommendations from people known: 90%
  • Consumers opinions posted online: 70%
  • Brand Web sites: 70%
  • Editorial content (e.g., newspaper article): 69%

It comes as no surprise that consumers would trust the opinions of people they already know, but I think it is a little shocking to consider the trust placed in the opinions of others with whom they are unfamiliar. Think of it this way: Consumers more trust the unsubstantiated, unregulated, anonymous, and grammatically dubious ramblings of complete strangers than they do the expensive, carefully-vetted, beautifully-executed, government-regulated ads placed on TV, radio, and in print.

If you read Experience: The Blog regularly, you'll recognize a recurring theme is that marketers must stop focusing so much effort on broadcasting messages at consumers and put greater effort toward engaging consumers with marketing that is respectful, desired, authentic, personalized, conversational, and valued. The findings of this Nielsen report add to the evidence that the shift toward more social and influence-inducing marketing is vital.

If you are a marketer at an organization, here's a quick exercise: Check your budget for the amount being spent on media buys; now compare this to allocation for PR, your Web site, and Social Media (even assuming there is a Social Media line item). My guess would be few (if any) marketing budgets in 2009 assign greater investments to Social Media, media relations, and digital marketing--channels that earn the greatest level of consumer trust--than to buying media.

To be fair, trust is just one emotional component of advertising, and there are obviously tasks for which print and TV ads are better suited than Web sites, Social Media, and PR, such as broadcasting a tightly-defined message with a great deal of scale. Still, how valuable is broadcasting a message in a medium in which almost half of consumers feel no degree of trust? (We can now respond to John Wanamaker's famous complaint, "Half the money I spend on advertising is wasted; the trouble is I don't know which half." It's the half of all media lost to a lack of trust on the part of the target audience!)

There are signs that budgets are shifting toward Social Media. In March of this year, eMarketer reported on a study by the Aberdeen Group that found "63% of the companies in their survey (defined as best-in-class) planned to increase their social media marketing budgets this year." One in five companies expected to increase their Social Media spending by more than 25 percent, and another 16 percent were planning for an increase of 11 to 25 percent.

This is good news to be sure, but the big percentages may hide what is still extremely modest investment in Social Media. In the same month the Aberdeen Group report was published, Adweek described a Forrester Research study that found "75 percent of marketers have budgeted less than $100,000 for social media efforts over the next year." That great big 25 percent increase could bring Social Media Spending in many companies from $100,000 all the way up to $125,000 (roughly enough to add a Social Media intern)!

Brands certainly cannot give up mass media, but in an age where consumer perception of advertising messages is being filtered through layers of mistrust and marginalized by cynicism, the time has come to make a serious commitment establishing our brands in the ways consumers trust. Soon, being the loudest and broadest messenger in a medium consumers don't trust simply won't count as much as being the most authentic, available, and accessible brand in the media consumers do.

1 comment:

Steve Schildwachter said...

Marketing budget allocation is the sexiest part of modern business. No, really. Here's a perspective from inside a large ad agency: