Yesterday, eMarketer reported on a Nielsen study that found that consumer recommendations are the most trusted form of advertising, not just among US consumers but worldwide.  Over three-quarters of those surveyed – in 47 markets across the globe – rated recommendations from consumers as a trusted form of advertising vs. just 63% for newspapers, 56% for TV and magazines, and 34% and 26% for search engine ads and banner ads, respectively.  The chart below shows how consumer opinions and recommendations stack up against several other forms of advertising, and the difference isn't slight. 

What's even more interesting to me is that "traditional" forms of advertising, like TV and radio, scored significantly higher than the predominant forms of online advertising – search and banner ads – in spite of the sophisticated targeting capabilities of search and display.  After all, isn't the goal of online ad targeting – behavioral, contextual, etc. – to provide a level of relevance and utility that excuses the intrusion of advertising?  Trust would seem to follow, but not so.  Consumers know the difference and they put their faith in each other first and foremost.      

These findings may explain the stellar case study results we've seen from several of our clients – higher conversion rates and significantly lower return rates on products that have customer reviews.  We are seeing similar results from our Ask & Answer solution, not to mention significant reduction in call center volume and costs!  In addition to selling each other, customers are also highly effective at servicing and supporting each other with product expertise and answers to tough "buy or bail" questions that arise when shopping online.  Can other forms of advertising do that?   

6 Responses to “Consumer Recommendations Are Most Trusted Form of Advertising”

  1. That is true also our Communication Agency when prepare some ad test consumers and from our research we get same conclusion.

  2. That is true also our Communication Agency when prepare some ad test consumers and from our research we get same conclusion.

  3. We certainly agree. In fact, we started our venture on this concept, that consumers most trust what other consumers say. Our initial focus, unlike Bazaarvoice, is in leisure travel. However, we also know that consumers don’t know which consumer reviews to trust. e.g. NYTimes wrote a piece on this http://travel.nytimes.com/2006/02/07/business/07guides.html

    To address this, we have aggregated over 18M travelers’ opinions from all over the web, and done semantic analysis to help consumers understand what the collective feedback for any specific product is. We are still in closed beta, but TechCrunch did a nice overview at http://www.techcrunch.com/2007/10/11/stealth-startup-kango-working-on-semantic-search-for-travel/#comment-1670473

    If you have a few minutes, please participate in our private beta and give us your feedback.

  4. We certainly agree. In fact, we started our venture on this concept, that consumers most trust what other consumers say. Our initial focus, unlike Bazaarvoice, is in leisure travel. However, we also know that consumers don’t know which consumer reviews to trust. e.g. NYTimes wrote a piece on this http://travel.nytimes.com/2006/02/07/business/07guides.html

    To address this, we have aggregated over 18M travelers’ opinions from all over the web, and done semantic analysis to help consumers understand what the collective feedback for any specific product is. We are still in closed beta, but TechCrunch did a nice overview at http://www.techcrunch.com/2007/10/11/stealth-startup-kango-working-on-semantic-search-for-travel/#comment-1670473

    If you have a few minutes, please participate in our private beta and give us your feedback.

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