new marketing realities 2012: research by jack morton worldwide
TRANSCRIPT
/1NEW REALITIES 2012
NEW REALITIES 2012 CONSUMER RESEARCH FROM JACK MORTON WORLDWIDE
/2NEW REALITIES 2012
NEW REALITIES 2012 reports topline findings from quantitative research conducted in late 2011 among consumers in Brazil, China, India and the US.
Four key findings stand out in particular:
# 1 PEOPLE ARE THE MOST POWERFUL AD MEDIUM Friends and family are the #1 influence on consumer awareness and purchase
# 2 GIVING PEOPLE SOMETHING TO TALK ABOUT TRUMPS “GOING VIRAL” Consumers aren’t likely to advocate brands they haven’t had great personal experiences with
# 3 ALL FORMS OF ADVOCACY ARE NOT THE SAME Consumers are skeptical about the value of a “like”
# 4 CONSUMERS AGREE: SHOPPER MARKETING WORKS More change their minds at POS due to staff, in-store experience and information than price
Additional insights from the 2012 NEW REALITIES will be released in the future or may be requested by contacting Jack Morton.
EXECUTIVE SUMMARY
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/3NEW REALITIES 2012
Introduction: 2012 4
About the Research 5
New Reality #1– People are the most powerful medium 6
New Reality #2– Giving people something to talk about trumps “going viral” 10
New Reality #3– All forms of advocacy are not the same 12
New Reality #4– Consumers agree: Shopper marketing works 14
Learn More 17
About Jack Morton 18
TABLE OF CONTENTS
/4NEW REALITIES 2012
Josh McCall Chairman & CEO of Jack Morton Worldwide
INTRODUCTION: 2012Josh McCall
There’s no question that 2012 will be an eventful year. We’ll spend much of the next 12 months speculating about outcomes of events in 2012 that we can only guess at now – like the winner of the US presidential election, the victors at the summer Olympic games in London and above all the health of the global economy. (I’ll go out on a limb now and predict that, Hollywood movies and ancient forecasts notwithstanding, the world will not come to an end in 2012.)
With so much that can’t be predicted, it’s all the more useful to study what we can, to gain insights into the world we and our clients live and work within in 2012. It’s in that spirit that we set out on a research project, NEW REALITIES 2012, aimed at enhancing our understanding of what is always at the heart of our clients’ world: consumers. How do they learn about brands in 2012? What influences their decisions? Where does advocacy come from? What makes them recommend brands and talk about them with others? And does a “like” on Facebook really mean anything to them?
The following pages highlight top-level findings and focus on four truths we’re betting will be key not only in 2012 but in the years to come – today’s important “new realities”.
Let us know what you think, and look for more research in the months ahead. And meanwhile, have a great 2012.
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ABOUT THE RESEARCHNEW REALITIES 2012 is based on an online survey conducted among 2,400 consumers between September 26 and October 10, 2011. Respondents were aged 18 and older, equally distributed by age, gender and income. Equal numbers of survey participants were drawn from the US, Brazil, China and India. All findings are statistically significant at a 95 percent confidence level.
In addition to the findings highlighted in the pages that follow, NEW REALITIES 2012 also investigated consumers’ varying perceptions relating to a range of product categories and types, including considered purchases (automobiles, insurance, banking, computers, software) and nominal purchases (OTC pain relievers, household cleaning, fast food, snacks). Results from this investigation of product sectors will be released at a later date or may be requested by contacting Jack Morton.
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NEW REALITY #1 PEOPLE ARE THE MOST POWERFUL AD MEDIUM For decades now, our industry has been talking about “advertising” as a patient on the critical care list. Yet advertising is alive and well. Its most powerful medium: people.
When we asked consumers as part of the NEW REALITIES 2012 research “What makes you aware of the products and services you buy?” and “What channels have the most value in your decision-making?” they pointed to the people in their lives who act as resources for information and advocacy.
Consumers are very clear on this point: the greatest influence on their decision-making is friends and family [ figs. 1–3 ]. The number one way consumers become aware of products and services they buy is friends and family who volunteer their opinions. And the most valuable influence on consumers’ purchase decisions is friends and family whose advice they seek out.
This “people as ad medium” trend is true whether consumers hail from Brazil, China, India or the US. It’s true whether they’re young or old, male or female. And it’s true whether they’re buying an expensive considered product like a car or making an inexpensive nominal purchase like fast food (though it’s more true by about 10 percentage points in the case of cars versus fast food). People hear daily from their friends and family about brands, and they instinctively seek out advice
when they’re in the market. They also continually scan what others are doing – for example, “Observing people use them” is the third most likely way consumers worldwide become aware of products, and in China, consumers say it’s the most valuable channel for making purchase decisions.
This “people as ad medium” trend is also becoming more powerful: since 2009, when we conducted parallel research in China and the US, “friends and family who volunteered their opinion” rose from 43 percent to 49 percent agreement as the top path to awareness about products and brands in the US; “friends and family from whom you sought out opinions” rose even more dramatically from 53 percent to 65 percent as the most valued channel for decision-making in the US. (The 2009 research did not extend to Brazil and India.)
So if the most powerful advertising medium around is people talking to other people, the question is: what makes people talk? The research suggests the answer (see New Reality #2).
/7NEW REALITIES 2012
Global average
US Brazil China India
Friends and family who volunteered their opinion 51 49 53 50 53
Advertising by company (e.g., TV, print, Internet ads) 45 41 50 38 50
Observing people use them 43 36 47 44 46
Friends and family from whom you sought out opinions 37 29 38 40 41
Company’s website 29 26 28 30 32
Information at store or on-shelf 28 22 33 26 29
Promotion (e.g., coupons, special pricing) 27 29 27 26 25
Research you conducted on the Internet 27 27 31 22 26
Product reviews by experts (e.g., in magazines, on Web) 22 17 21 19 30
In-store experience or media 20 16 21 21 22
[ fig. 1 ]
TOP 10 WAYS CONSUMERS BECOME AWARE OF THE PRODUCTS AND SERVICES THEY BUY
(percent agreeing)
/8NEW REALITIES 2012
Global average
US Brazil China India
Friends and family from whom you sought out opinions 56 65 55 58 44
Friends and family who volunteered their opinion 55 61 53 61 43
Research you conducted on the Internet 47 61 41 48 37
Product reviews by experts (e.g., in magazines, on Web) 47 55 45 45 43
In-store experience or media 44 55 46 41 35
Advertising by company (e.g., TV, print, Internet ads) 43 53 51 27 41
Product reviews by experts (e.g., in magazines, on Web) 43 57 41 40 35
Promotion (e.g., coupons, special pricing) 42 57 40 40 31
Company's website 42 57 39 35 35
Research you conducted outside the Internet 42 56 34 46 32
[ fig. 2 ]
TOP 10 MOST VALUABLE SOURCES OF INFORMATION WHEN MAKING PURCHASE DECISIONS
(percent agreeing)
I listen to thepeople that I trust!
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USaverage
Age 18-25
Age 26-42
Age 43-62
Male Female
Friends and family from whom you sought out opinions
65 64 63 68 61 69
Friends and family who volunteered their opinion 61 61 59 64 57 65
Research you conducted on the Internet 61 59 61 63 60 63
Product reviews by peers (such as in publications, on the Web)
57 59 57 56 56 59
Promotion (such as coupons, special pricing, etc.) 57 51 54 66 52 62
Company's website 57 55 56 60 55 59
Research you conducted outside the Internet 56 52 55 61 55 56
Product reviews by experts (such as professionals in magazines, on the Web)
55 55 55 56 54 56
In-store experience or media 55 52 50 63 53 56
Advertising by the company (such as TV, print, Internet ads)
53 44 53 63 51 56
[ fig. 3 ]
TOP 10 MOST VALUABLE SOURCES OF INFORMATION WHEN MAKING PURCHASE DECISIONS (US CONSUMERS)
I researchonline!
(percent agreeing) shown for US consumers by age and gender
/10NEW REALITIES 2012
NEW REALITY #2 GIVING PEOPLE SOMETHING TO TALK ABOUT TRUMPS “GOING VIRAL” Advocacy. It’s today’s holy grail of marketing: people acting as your advertising medium by recommending your brand to their peers (see new reality #1). But what inspires advocacy? Or put another way, what makes people talk?
According to the consumers involved in our research, the answer is experience: direct, positive experience with your brand. Across the world, across generations and genders, three out of four consumers strongly agree with the statement “I only advocate brands when I have had great personal experiences with them.” In the US, 79 percent agree with this statement, and over four in five (81 percent) women. Obviously, “experience” can be defined and delivered in many ways: it can comprise a literal, direct, hands-on experience with the product or service, but it could just as easily comprise engaging consumers with information about the brand in such a visceral manner that it achieves the status of an experience.
For all those marketers tempted to get consumers to recommend their brands simply by “going viral”, according to our research it’s not enough. Consumers also agree that given all the clutter and noise, “if a brand wants to get my attention it has to do something special”. Three in five US consumers and well over four in five Chinese consumers expect brands to stand out in this way.
Sadly, and somewhat paradoxically, attempting merely to “go viral” more often seems to lead to sameness that fails to differentiate. It’s not “special”. Mere talk is not advocacy; advocacy must be earned. Providing a direct positive experience is a prerequisite for earning advocacy for the vast majority of consumers. Creating a unique experience that speaks authentically to the brand is a way to break through to consumers.
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Global average
US Brazil China India
I only advocate brands when I have had great personal experiences with them
76 79 74 78 78
With all the media and information available to me, if a brand wants to get my attention it has to do something special
75 65 71 84 78
I feel so strongly about a certain brand, or brands, I am an active advocate for them
66 62 51 80 74
[ fig. 4 ]
TO INSPIRE ADVOCACY, GIVE PEOPLE SOMETHING TO TALK ABOUT
I’ve tried it!
Does it work?I want to try
it first.
I would definitely recommend it.
I told my friendit’s a good product!
(percent agreeing)
/12NEW REALITIES 2012
NEW REALITY #3 ALL FORMS OF ADVOCACY ARE NOT THE SAME Social networks have transformed daily life for us all – or certainly for the 83 percent of those surveyed who are members of a social network [ fig. 5 ]. It’s become like the air we breathe, expected and critical for brands to master. Too often, however, brands mistakenly assume a “build it and they will come” inevitability for their own presence on social networks – believing that it’s just a matter of building a brand page and getting “likes”. But as the research shows, brands can’t assume that advocacy generated online is always going to be enough to persuade consumers. They have to use social media as part of a bigger experience. NEW REALITIES 2012 certainly reaffirms that the social web is hugely important to consumers worldwide – but the data is not unequivocal on how they are using social media to make brand decisions. Some responses seem contradictory – or at least to point to consumer conflict over the ubiquity versus the meaningfulness of social networks vis a vis brand recommendations. For example, despite the fact that over four out of five respondents are using social networks, only one in five (22 percent) agrees that “I use the social network sites to share brand information and experiences the same way I do… in the real world”. Slightly more (24 percent) even say that “The recommendations I make in person are more meaningful than those I make online”; among Gen X consumers, this number rises to 39 percent.
Similarly, although just one in four consumers worldwide (25 percent) and almost one in three in Brazil (31 percent) agree that “Social network sites are a good source of word-of-mouth information on brand experiences”, in the US (where Facebook was invented) an even more tepid 18 percent share this view. In fact in the US slightly more people (19 percent) agree that they “do NOT consider information on social sites to be good research for brand decisions”; just seven percent consult social network sites first when researching brand decisions.
Equally contradictory are consumers’ statements about the value of “likes”. About one in five says “liking” or “friending” brands is “silly” – yet an equivalent number say they’re more likely to consider a brand that has a lot of “friends”. Again US consumers are more skeptical: only one in ten admits to being influenced by brands’ popularity on social networks. Outside the US, especially in gregarious Brazil, consumers are more inclined to hit the “like” button.
Clearly, brands must look to social networks to amplify advocacy – but remember that not all forms of advocacy are the same. Count clicks that create a positive halo but don’t put too much stock in them. Enable recommendations that support information-gathering. And ultimately, prioritize the truly “meaningful” interactions and advocacy that fuel active decision-making and purchase.
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Global average
US Brazil China India
The recommendations I make in person are more meaningful than those I make online
24 22 26 20 29
Are you a member of any social network group, like Facebook, MySpace, LinkedIn, etc.?
83 84 91 64 92
For those answering “yes” above, the following represent percent strongly agreeing
I only “like" or "follow" brands that I care about on Facebook 23 23 32 15 20
I think “friending" or pushing "like" buttons for brands on social sites is silly 19 20 18 17 22
I do NOT consider information on social sites to be good research for brand decisions
14 19 17 18 18
Social network sites are a good source of word-of-mouth information on brand experiences
25 18 31 23 27
I use the social network sites to share brand information and experiences the same way I do with family, friends and co-workers in the real-world
22 11 23 22 21
I am more likely to consider a brand that has a lot of “friends” or is “liked” by many
18 10 17 22 23
If they ask me, I'll “like" or "follow" most brands I use on Facebook 18 10 19 20 24
If I need to do research for a brand decision, a social network site is the FIRST place I will check
16 7 13 23 20
MOST CONSUMERS USE SOCIAL NETWORKS BUT DISAGREE ABOUT ITS IMPACT
[ fig. 5 ] (percent agreeing) [9-10 on a scale of 1-10])
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NEW REALITY #4 CONSUMERS AGREE: SHOPPER MARKETING WORKS Given the simultaneous ubiquity and innovation in mobile technology, it’s not surprising that many predict shopper marketing will be one of the fastest-growing areas of the industry in 2012. There’s a tremendous opportunity to bring targeted information and offers to motivated consumers in “shopper mode” and thereby tip the balance.
Yet the research shows that there are broader considerations than just technology and access to information in shifting shoppers into buyers [ figs. 6–7 ]. As part of NEW REALITIES
2012, we asked consumers about any recent experiences in changing their minds about a purchase decision at the point of sale. On average just about half of consumers worldwide said they had changed their minds – and for the majority of them, the aggregated factors of getting new information, some kind of demonstration or an in-store experience were significantly more likely to influence them than price. Needless to say, the combined impact of these factors puts pressure on in-store staff (whether the brand’s own, its channel partners’ or franchisees’) to be effective and persuasive demonstrators and influencers. Put more positively, it suggests that marketers have an opportunity to invest in a better in-store experience instead of cutting price and margin.
In the same vein, consumers spoke plainly about the significant impact of the store experience as well as the need to create differentiating and unique brand experiences. For example, three out of four consumers agreed that “My experience in-store has a huge impact on purchase decisions”. Similarly, 72 percent agreed that “Brands in some categories are mostly the same, so it’s good service or unique customer experiences that make me buy one brand over another”.
That’s a huge endorsement of brands’ need to invest in building not only compelling retail experiences but also, more fundamentally, strong experience brands that immediately differentiate otherwise similar offerings. And as we found in our BEST EXPERIENCE BRANDS research, a majority of consumers say that experience is the single biggest factor impacting their brand choices; many will even pay more for a brand that offers a unique experience.
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Global average
US Brazil China India
Yes 51 29 50 68 58
For those answering “yes” above, the following represent percent agreeing that the decision was
Mainly financial 39 48 34 35 38
Not mainly financial 62 52 66 65 62
Mainly informational 32 32 26 38 31
Mainly demonstration/experiential 30 20 40 27 31
[ fig. 6 ]
EXPERIENCE AND INFORMATION ARE MORE LIKELY THAN PRICE TO CHANGE CONSUMERS’ MINDS AT THE POINT OF SALE
What changes my mind when I shop?
In-store experiencematters!
(percent agreeing)
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Global average
US Brazil China India
My experience in-store has a huge impact on purchase decisions 76 78 63 79 74
I am more likely to buy a new brand if I can actually experience it myself
76 77 68 81 76
Brands in some categories are mostly the same, so it's good service or unique customer experiences that make me buy one brand over another
72 68 63 79 76
[ fig. 7 ]
IN-STORE EXPERIENCE TURNS SHOPPERS INTO BUYERS
(percent agreeing)
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Look for more insights from NEW REALITIES 2012 to be released in the future. To request insights relating to product categories or other aspects of the research, contact [email protected]
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/18NEW REALITIES 2012
© Jack Morton Worldwide 2012
JACK MORTON WORLDWIDE IS A GLOBAL BRAND EXPERIENCE AGENCY WITH OFFICES ON FIVE CONTINENTS. OUR AGENCY CULTURE PROMOTES BREAKTHROUGH IDEAS ABOUT HOW EXPERIENCES CONNECT BRANDS AND PEOPLE – IN PERSON, ONLINE, AT RETAIL AND THROUGH THE POWER OF DIGITAL AND WORD OF MOUTH INFLUENCE. WE WORK WITH BOTH BTOC AND BTOB CLIENTS TO CREATE POWERFUL AND EFFECTIVE EXPERIENCES THAT ENGAGE CUSTOMERS AND CONSUMERS, LAUNCH PRODUCTS, ALIGN EMPLOYEES AND BUILD STRONG EXPERIENCE BRANDS. RANKED AT THE TOP OF OUR FIELD, WE’VE EARNED OVER 40 AWARDS FOR CREATIVITY, EXECUTION AND EFFECTIVENESS LAST YEAR, INCLUDING BEST NEW PRODUCT INTRO, BEST MEDIA EVENT AND EMPLOYEE CAMPAIGN OF THE YEAR. JACK MORTON IS PART OF THE INTERPUBLIC GROUP OF COMPANIES, INC. (NYSE: IPG).