November 16, 2006
Advertising Rules Change
David Ogilvy wasn’t kidding around when he said, “Half my advertising works, I just don’t know which half.”
Today, as in Mr. Ogilvy’s pioneering days, marketers are looking for the right message and medium to get consumers to buy their products and shop at their stores.
A new study conducted for the Retail Advertising and Marketing Association (RAMA) by BIGresearch, explores how different forms of advertising influence consumer shopping during the Christmas holiday season.
The single most effective form of advertising, according to the research, is word-of-mouth. Forty-one percent said they were most influenced by what others said. They also said that, when it came to word-of-mouth, they were not only influence by family, friends and co-workers, but complete strangers posting reviews on web sites. When it came to consumer electronics, 33 percent said articles and product reviews influence their decision to purchase.
“With the strong influence that product reviews and word of mouth are making in buying decisions, it’s no wonder that many retailers are exploring viral marketing to attract customers this holiday season,” said RAMA executive director Mike Gatti in a press release. “By promoting merchandise using the vast array of communication vehicles available, retailers are sure to see increased traffic both in their stores and on their Web sites.”
In addition to the word-of-mouth and product reviews, more traditional advertising media are effective in attracting customers looking to purchase electronics. Nearly an identical amount said they looked to newspaper inserts (27.7 percent) and online advertising (27 percent) before buying consumer electronics.
When it came to holiday clothing purchases, word-of-mouth was king with 31.4 percent relying on what others had to say before going out to buy. Newspaper inserts (31.4 percent), direct mail pieces (21.9 percent) and coupons (20.7 percent) also played a role in attracting shoppers.
As might be expected, the research shows older adults are more attuned to traditional media vehicles, such as TV, radio and newspapers. Younger adults made greater use of newer technologies.
Slightly fewer than 70 percent of those between 18 and 35 regularly use a cell phone, 37.9 percent use instant messaging on a regular basis and nearly one-in-three uses an MP3 player. Consumers in this age group are also adept in avoiding advertising. Nearly 23 percent use Digital Video Recording, enabling them to watch broadcast content without having to watch the commercials.
“Retailers need to be aware of how consumers are receiving information about specials, sales and promotions,” said Phil Rist, vice president of strategy at BIGresearch. “By offering shoppers multiple vehicles to receive their information, retailers essentially increase their odds of winning that customer over.”
Discussion Questions: What do you see as the implications of the Retail Advertising and Marketing Association/BIGresearch study findings? Do you see
any new media techniques gaining ground this holiday season?
BrainTrust
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Discussion Questions
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So, is Don Delzell right in looking at this research from the perspective of “who do consumers believe”? If so, and I think he makes a great point, the answer seems to be “anybody but us!”
But averages are often composed of extremes, and we touched on this very issue of establishing trusted retail brand names not long ago when we discussed the credibility of in-store media messages. Depending on who you are and your experiences with any given retailer, the credibility you place in their information can be quite high.
The question I have is this…do retailers routinely think about whether they are building equity — or using up a little bit — with every interaction they have with a consumer? Retailers that seem to do that (I would cite Nordstrom, Lands’ End, Orvis, L.L. Bean, Cabela’s and a number of others) achieve legendary status with their loyal customer base.
The BIGresearch project told us all what we already knew. While I agree that word of mouth is the most influential means of touting a product, I would caution advertisers not to start trying to influence consumers via bogus reviews. One thing to remember about the web is that it works both ways. Word of mouth can cut as well as heal us. Viral marketing seems to be somewhat deceptive in nature and may not be well received by a large percentage of consumers. I would recommend that advertisers stick with facts and truth and let the chips fall where they may.
I think the key point is being missed here. The question we should ask is “why” are customer reviews the number one source of information? We don’t know these people….on what basis do we accord them status to influence our decisions? The answers are more about loss of confidence and distrust of advertising than about confidence in faceless consumers…who may or may not be reliable or like us.
The sad fact is that retailers and advertisers have taken the consumer for granted for far too long. We’ve tried to “sell” them things, to convince them to buy…in effect, we have been servants of ourselves and our own need to move product, rather than servants of the consumer.
Times they are a changin’. The Internet is making information more and more available. The role of the retailer needs to shift back to being the valued, trusted source for products and information. The opportunity is there. Retail, for product related advertising, if it is courageous enough, can fulfill the role of trusted advisor. Use your advertising to inform with the intent of delivering post-purchase consumer satisfaction.
I think all this will mean a greater focus on targeted and perhaps even personalized advertisements, which will advantage retailers who have:
>The ability to combine shopper data with targeted ads as well as promotions.
>Aggressively explored the use of new advertising media with a lot more focus on communications in-store.
Newspaper inserts, direct mail, and coupons are frequently used by shoppers. Is that because they’re cost-effective or because shoppers know that’s how many retailers advertise? If Sears, major conventional supermarkets, RadioShack, Kohl’s, and Macy’s declared “Save The Trees Week” and went on a “print strike,” running all their ads online and via TV and radio, they might save a fortune, not just the forests. Some volume might be lost, but would profits decline?
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So, is Don Delzell right in looking at this research from the perspective of “who do consumers believe”? If so, and I think he makes a great point, the answer seems to be “anybody but us!”
But averages are often composed of extremes, and we touched on this very issue of establishing trusted retail brand names not long ago when we discussed the credibility of in-store media messages. Depending on who you are and your experiences with any given retailer, the credibility you place in their information can be quite high.
The question I have is this…do retailers routinely think about whether they are building equity — or using up a little bit — with every interaction they have with a consumer? Retailers that seem to do that (I would cite Nordstrom, Lands’ End, Orvis, L.L. Bean, Cabela’s and a number of others) achieve legendary status with their loyal customer base.
The BIGresearch project told us all what we already knew. While I agree that word of mouth is the most influential means of touting a product, I would caution advertisers not to start trying to influence consumers via bogus reviews. One thing to remember about the web is that it works both ways. Word of mouth can cut as well as heal us. Viral marketing seems to be somewhat deceptive in nature and may not be well received by a large percentage of consumers. I would recommend that advertisers stick with facts and truth and let the chips fall where they may.
I think the key point is being missed here. The question we should ask is “why” are customer reviews the number one source of information? We don’t know these people….on what basis do we accord them status to influence our decisions? The answers are more about loss of confidence and distrust of advertising than about confidence in faceless consumers…who may or may not be reliable or like us.
The sad fact is that retailers and advertisers have taken the consumer for granted for far too long. We’ve tried to “sell” them things, to convince them to buy…in effect, we have been servants of ourselves and our own need to move product, rather than servants of the consumer.
Times they are a changin’. The Internet is making information more and more available. The role of the retailer needs to shift back to being the valued, trusted source for products and information. The opportunity is there. Retail, for product related advertising, if it is courageous enough, can fulfill the role of trusted advisor. Use your advertising to inform with the intent of delivering post-purchase consumer satisfaction.
I think all this will mean a greater focus on targeted and perhaps even personalized advertisements, which will advantage retailers who have:
>The ability to combine shopper data with targeted ads as well as promotions.
>Aggressively explored the use of new advertising media with a lot more focus on communications in-store.
Newspaper inserts, direct mail, and coupons are frequently used by shoppers. Is that because they’re cost-effective or because shoppers know that’s how many retailers advertise? If Sears, major conventional supermarkets, RadioShack, Kohl’s, and Macy’s declared “Save The Trees Week” and went on a “print strike,” running all their ads online and via TV and radio, they might save a fortune, not just the forests. Some volume might be lost, but would profits decline?