Consumer Trust in “Earned” Advertising is Increasing Significantly.

Introduction

According to a study conducted by Nielsen, a leading global provider of consumer insights, 92% of consumers worldwide trust “earned” media such as recommendations from friends and family, and word-of-mouth advertising, more than any other form of advertising. This marks an 18% increase since 2007. The second most trusted form of advertising is online consumer reviews, with 70% of global consumers surveyed online indicating trust in this platform, which is a 15% increase over the last four years.

Nielsen’s survey included more than 28,000 Internet respondents in 56 countries, revealing that paid television, magazine, and newspaper ads are trusted by only 47% of consumers globally. Furthermore, consumer confidence in these traditional forms of paid media has declined by 24%, 20%, and 25%, respectively, since 2009. More significant is the fact that recommendations from peers are trusted by an impressive 90 percent of consumers, whereas only 33 percent have trust in advertisements. Despite this, most advertising dollars are still spent on traditional or paid media, such as television. In 2011, overall global ad spending increased by 7% compared to the previous year, with television advertising accounting for nearly 10% of the growth. The United States and China were among the countries that attracted more advertising dollars than the previous year.

Randall Beard, the global head of Advertiser Solutions at Nielsen, stated that while brand marketers are seeking to enhance their advertising strategies, the increasing number of media messages may hinder their effectiveness in reaching their intended audiences on various platforms. Although television advertising will remain the primary method for marketers to connect with audiences due to its wide reach compared to other media, global consumers continue to view recommendations from friends and online consumer opinions as the most trustworthy sources.

Therefore, successful brand advertisers will seek ways to establish better connections with consumers and capitalise on their positive feedback and experiences. Nielsen’s survey shows that 58% of global online consumers find “owned media” such as messages on company websites to be trustworthy, while 50% trust content in emails they have agreed to receive.

Additionally, the survey indicates that 40% of global respondents find product placements in TV programs to be credible, while 42% trust radio ads and 41% have faith in pre-movie cinema messages.

Trust in Online Ads

According to Nielsen’s survey, 36% of global online consumers trust online video ads, while 33% believe in messages conveyed through online banner ads. This marks a significant increase from 26% in 2007. Additionally, ads viewed in search engine results are trusted by 40% of global respondents, up from 34% in 2007. Sponsored ads on social networking sites are also considered credible by 36% of global respondents.

Randall Beard, the global head of Advertiser Solutions at Nielsen, commented that the growth in trust for online search and display ads over the past four years should encourage marketers to allocate more of their advertising budget towards this medium. He also stated that many companies are already increasing their paid advertising activity on social networking sites due to the high level of trust consumers place in friends’ recommendations and online opinions. As a result, brands should closely monitor this emerging ad channel as it continues to grow.

Trust in Mobile Ads

Nielsen’s survey reveals that around one-third of global respondents trust video or banner display ads on mobile devices, including tablets or smartphones. Furthermore, 29% of global online consumers reported trusting mobile phone text ads, indicating a substantial increase of 21% since 2009 and 61% since 2007.

AD Relevance

According to Nielsen’s survey, 50% of global online consumers find TV ads to be personally relevant when they are searching for information on products they want or need. This number is particularly high among consumers in the Middle East, Africa, and Pakistan, where 65% find TV ads to be highly pertinent. However, only 30% of European respondents consider TV ads to be relevant.

In comparison, 33% of global respondents find online banner ads to be relevant, while social network ads (36%) and online video ads (36%) are more trusted. Ads in search engine results are deemed relevant by 42% of global consumers.

Beard stated, “In today’s fragmented media world, marketers strive for the most effective and efficient ads. Relevant content and messaging is essential to boost advertising ROI. While ads on a brand’s own website or solicited emails are expected to be highly relevant, Nielsen’s survey suggests that there is still potential for marketers to reach the right audience through advertiser-driven messages.”

About the Nielsen Global Survey

Nielsen conducted the Global Trust in Advertising Survey from August 31 to September 16, 2011, polling more than 28,000 online consumers in 56 countries across North America, Asia Pacific, Europe, Latin America, the Middle East, and Africa. The sample was designed to have quotas based on age and sex for each country, based on their Internet users, and was weighted to represent Internet consumers. The maximum margin of error for the survey is ±0.6%. The survey only included respondents with online access, as Internet penetration rates vary by country. Nielsen established the Global Survey in 2005 and uses a minimum reporting standard of 60 per cent Internet penetration or 10M online population for survey inclusion.

How can it affect you?

While the Nielsen Global Trust in Advertising Survey provides valuable insights for marketers, it also has implications for businesses seeking to protect themselves from risks. In today’s digital age, companies must be aware of how their brand is perceived online and the impact of earned media and consumer opinions on their reputation. Negative reviews and feedback can harm a business’s credibility and bottom line, highlighting the need for comprehensive business insurance that includes coverage for reputation damage and cyber liability. As businesses increasingly rely on digital channels to reach their customers, they must also ensure that their advertising strategies are effective and relevant to their target audience, to maximise the return on their advertising investment and minimise potential risks.

The findings of Nielsen’s Global Trust in Advertising Survey have important implications for businesses looking to advertise their products and services. While traditional forms of advertising such as television and print ads still have a place in reaching audiences, the increasing trust in earned media and online platforms cannot be ignored. As such, companies may want to consider allocating more of their advertising budget towards digital channels, including social media and mobile ads.

However, as with any form of advertising, it’s important to ensure that the content and message are relevant to the target audience to maximise return on investment. Additionally, as businesses invest more in digital advertising, it’s crucial to consider the potential risks and liabilities associated with this form of promotion and ensure that they have adequate business insurance coverage to protect against any potential claims or losses.

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