Word-Of-Mouth The Most Powerful Selling Tool

Word-Of-Mouth The Most Powerful Selling Tool

Nielsen Global Survey

Traditional Media Advertising Still More Credible Worldwide Than Ads on
Search Engines, Web Site Banners and Mobile Phones
Blogs – a reliable source of information for North Americans and Asians

Auckland, 1 October 2007 – Despite an ever-expanding array of advertising platforms and sources, consumers around the world still place their highest levels of trust in other consumers, according to a recent global Nielsen Internet survey.

Conducted twice-a-year among 26,486 internet users in 47 markets from Europe, Asia Pacific, the Americas and the Middle East, Nielsen most recently surveyed consumers on their attitudes toward thirteen types of advertising – from conventional newspaper and television ads to branded web sites and consumer-generated content.

“Advertisers around the world are able to reach consumers across an increasingly diverse range of media platforms,” said David McCallum, global managing director for Nielsen’s Customized Research Services. “Even so, the recommendation of someone else remains the most trusted sources of information when consumers decide which products and services to buy. And even though new media technologies are playing a role in ‘globalizing’ society, many purchasing decisions are still based on firmly held national and cultural attitudes. Furthermore, given that nothing travels faster than bad news - with estimates that reports of bad experiences outnumber good service reports by as many as 5:1 - the importance of responsive, high quality customer service is yet again highlighted.”

The Nielsen survey found Filipinos and Brazilians (67%) to be the most trusting overall of all forms of advertising, while trust among Danes (28%), Italians (32%), Lithuanians (34%) and Germans (35%) were the lowest in the world, with Kiwi’s at 51%.

Top Five/Bottom Five – Trust in Advertising

Philippines 67%
Brazil 67%
Mexico 66%
South Africa 64%
Taiwan 63%

Latvia 38%
Germany 35%
Lithuania 34%
Italy 32%
Denmark 28%

The Nielsen survey also found that while new platforms like the Internet are beginning to catch up with older media in terms of ad revenues, traditional advertising channels continue to retain the public’s trust. Ads in newspapers rank second worldwide among all media categories, at 63 percent overall (NZ 73%), while television, magazines and radio each ranked above 50 percent (NZ ranked above 60% for each of these). Such advertising scored best in Latin America and most poorly in Eastern Europe, the Middle East and Africa (EEMEA) regions.

To What Extent Do You Trust the Following Forms of Advertising?
Global average NZ
average
Recommendations from consumers 78% 83%
Newspapers 63% 73%
Consumer opinions posted online 61% 64%
Brand websites 60% 53%
Television 56% 63%
Magazines 56% 60%
Radio 54% 64%
Brand sponsorships 49% 44%
Email I signed up for 49% 63%
Ads before movies 38% 41%
Search engine ads 34% 21%
Online banner ads 26% 15%
Text ads on mobile phones 18% 19%
Source: Nielsen Online Global Consumer Study April 2007
Base: All Respondents

Although consumer recommendations are the most credible form of advertising among 78 percent of the study’s respondents, Nielsen research found significant national and regional differences regarding this and other mediums. Word of mouth, for example, generates considerable levels of trust across much of Asia Pacific. Seven of the top ten markets that rely most on “recommendations from consumers” are in this region, including Hong Kong (93%), Taiwan (91%) and Indonesia (89%). At the other end of the global spectrum, Europeans, generally, are least likely to trust what they hear from other consumers, particularly in Denmark (62%) and Italy (64%).

Word of Mouth is a powerful recommendation for Asians
Seven of the top 10 markets who relied on it hailed from Asia

Hong Kong 93%
Taiwan 91%
Indonesia 89%
India 87%
South Korea 87%
Philippines 86%
New Zealand 83%

Ireland 84%
Mexico 84%
UAE 84%

Top Five/Bottom Five - to rely on someone else’s recommendation

Hong Kong 93%
Taiwan 91%
Indonesia 89%
India 87%
South Korea 87%

Hungary 68%
Latvia 68%
Lithuania 64%
Italy 64%
Denmark 62%

The reliability of consumer opinions posted online – which rated third, at 61 percent overall – also varies throughout the world, scoring highest in North America and Asia, at 66 and 62 percent respectively. Among individual markets, web-based opinions such as Blogs are most trusted in South Korea (81%) and Taiwan (76%), while scoring lowest, at 35 percent, in Finland.

Consumer generated media – such as Blogs – were considered a reliable source of information for North Americans and Asians

North America 66%
Asia Pacific 62%
Europe 59%
EEMEA 57%
Latam 53%
Global Average 61%

Top Five/Bottom Five - To what extent do you trust the following forms of advertising: consumer opinions posted online

Korea 81%
Taiwan 76%
India 73%
Philippines 72%
Poland 72%

Italy 47%
Chile 47%
Estonia 46%
Lithuania 46%
Finland 35%

On the other hand, only consumer-generated media and branded web sites were trusted by more than half of all consumers. Search engine and banner advertising, along with text ads on mobile phones, each scored at the bottom of the list with fewer than 35 percent of total respondents. Regionally, Latin American consumers found these ads most believable, while Europeans trusted them the least.

About The Nielsen Company

The Nielsen Company is a global information and media company with leading market positions and recognized brands in marketing information (ACNielsen), media information (Nielsen Media Research), trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in Haarlem, the Netherlands, and New York, USA. For more information, please visit, www.nielsen.com.

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