Top 10 Boomer Myths: Separating Fact from Fiction

Boomers: energetic, ad-savvy,experimental

Preconceived notions about Baby Boomers abound, but many are mere myth, according to the third Quarterly Boomer Report from AARP Services and Focalyst, titled "How Well Do You Know Boomers? Counting Down the Top 10 Boomer Myths," writes MarketingCharts.

"Contrary to many common assumptions, Boomers are making retirement obsolete, are very savvy about advertising, and are experimenting with new products," said Howard Byck, VP of corporate development for AARP Services.

"Within this generation are diverse segments that must be recognized and addressed differently," added Jack Lett, executive director of Focalyst.

Below, the top 10 Boomer myths — and corresponding facts — according to the report.

Myth #10 - Boomers are retiring early
Much of the attention given to Boomers' turning 62 this year is being eligible to take Social Security benefits early. In reality, few plan to stop working entirely when they reach retirement age — only 11 percent.

Of those Boomers who know what they plan to do when they reach retirement age (some two-thirds), 72 percent plan to keep working, either part- (65 percent) or full-time (7 percent).
Myth #9 - Boomers are downsizing their homes

Despite the image of older consumers "winding down" and simplifying their lives and homes as years progress, just 6 percent of Boomers plan to live in a smaller residence five years from now.
Moreover, 76 percent plan to live in either a same-sized (their current home or a new home of the same size) or larger home.

Myth #8 - Most Boomers are married empty nesters
Most are not Empty Nesters. Only about one in four Boomers fit the profile of married with adult children who have left home. 37 percent of Boomers still have children under 18 in the home — and one-third of Boomers are single.

Myth #7 - You can capture Boomers with mainstream advertising
Boomers pay attention to advertising, but they do not always like what they see. 66 percent say ads have gotten more crude in recent years; another 67 percent are less likely to purchase a product if they find the advertising offensive. 23 percent consider ads geared toward their age group insulting.

Myth #6 - Boomers are brand loyal and will not switch
Commonly thought to be set in their ways, Boomers are as likely as younger cohorts to experiment with new products. They pay attention to advertising for new products, and 61 percent of Boomers agree that "in today's marketplace, it doesn't pay to be loyal to one brand," compared with 62 percent of those age 18-41.

Myth #5 - Boomers are all wealthy
Collectively Boomers are the wealthiest generation in history, but only 9 percent are truly affluent (defined as having pre-tax incomes of $150,000 or more if working, or $100,000 or more if retired). In fact, one quarter of Boomers have no savings or investments at all.

Myth #4 - Boomers are winding down with age
They are quite active. The typical Boomer regularly participates in an average of 10 activities — and participation extends beyond going to church or gardening. They travel (60 million took at least one trip last year), attend live sporting events (22 million) and bicycle (11 million), among other activities.

Myth #3 - Boomers are technologically challenged
Boomers were in the workforce during the evolution of computers, email and the internet, and were the first to understand the value of technology. 82 percent of Boomers use the 'net and 64 percent have been online. Online activities include instant messaging, downloading music or movies, financial transactions and online gaming.

Myth #2 - Boomers are the "Me Generation"
Boomers have typically been portrayed as the self-centered "Me Generation," but their actions in later adulthood suggest "We Generation" is more accurate. They are caring for others and for the world: 70 percent feel they have a responsibility to make the world a better place, and 57 percent try to buy from companies that give back to their communities.

Myth #1 - Boomers are all the same
Often portrayed as a monolith — 77 million people thinking, acting, behaving and buying all in the same way — Boomers more than other segments undergo more major life events, which occur in greater frequency between the ages of 50-65 than in any other time in a person's life.
The typical Boomer experiences an average of two major life events surrounding career, family, finance or health each year. These events can have a major impact on attitudes, life goals and consumer behavior.

Source: MarketingVox

'Abundantly Affluent' Fastest-Growing Segment of Population

US households with $100,000+ in income are the fastest-growing segment of the population according to US Census Bureau data, up from 19.7 million in 2005 to 22.2 million in 2006, an increase of nearly 13 percent, said Unity Marketing - via MarketingCharts.

Between 2005 and 2006…
Affluent households with incomes from $150,000 to $249,999 grew the fastest.
The number of "abundantly affluent" households, those with incomes between $150,000 and $199,999, grew 17.9 percent.
The "super-affluent" group (incomes between $200,000 and $249,999) grew 16.2 percent.
The "ultra-affluent" (incomes $250,000 and above) rose 10.7 percent.
The number of "comfortable affluent" households ($100,000-$149,999) grew 10.3 percent.
Meanwhile, the number of households with incomes of less than $25,000 decreased 5.1 percent.

Findings from Unity Marketing's Luxury Consumer Tracking Study:
13 percent of affluent households are headed by an ethnic minority.
Fully 30 percent of affluent households are members of the GenXer and Millennial generations - introducing youthful tastes and attitudes to the luxury market.

Some 5 percent of affluent households are led by a woman with no husband present.
"Given the growing numbers of affluents and the increasing diversity among that population, it is dangerous for marketers to take a 'one-size-fits-all' approach to marketing to these consumers," said Pam Danziger, president of Unity Marketing. "Savvy luxury marketers need to account for differences in buying preferences and behavior among the increasingly diverse segments that make up the affluent population."

Is the Ad a Success? The Brain Waves Tell All

NEVER mind brainstorms. These days, Madison Avenue is all about brain waves.

That may be overstated, but it is no exaggeration that agencies and advertisers are growing more interested in neuroscience in their never-ending efforts to improve effectiveness.
The ardor of the ad business to adopt the technical tools of biometrics — measuring brain waves, galvanic skin response, eye movements, pulse rates and the like — is increasing as consumer spending, the engine of the American economy, slows.

In other words, in hard times ads must work harder to move the merchandise.
“Instead of hypotheses about what people think and feel, you actually see what they think and feel,” said Joel Kades, vice president for strategic planning and consumer insight at Virgin Mobile USA in Warren, N.J.

“I’m not such a huge fan of ad testing,” he added, but measuring biological responses is “absolutely useful.”

The curiosity about neuroscientific ways to determine how ads work — or fail to work — will be on display this week at the 54th annual convention and exposition of the Advertising Research Foundation. The agenda for the conference is filled with presentations on better methods to determine how consumers engage with ads (and vice versa).

“In many ways, we’re testing advertising the way we were testing advertising when I was at Procter & Gamble 22 years ago,” said Frank Stagliano, executive vice president for the Nielsen Entertainment Television Group in New York, part of the Nielsen Company.
Neuroscience can provide “a more accurate way to understand what consumers really like,” Mr. Stagliano said, which helps to produce ads and programs that “break through the clutter” rather than contribute to it.

Last month, Nielsen bought a stake in NeuroFocus, a company that specializes in brain-wave research and works for clients like Scottrade, the brokerage firm.

“We measure attention, second by second; how emotionally engaged you are with what you’re watching, whether it’s a commercial, a movie or a TV show; and memory retention,” said A. K. Pradeep, chief executive at NeuroFocus in Berkeley, Calif.

A company that competes with NeuroFocus, the EmSense Corporation, hopes to demonstrate such usefulness in a discussion on Monday at the research foundation’s convention.
Executives of EmSense, which also tries to measure consumer response to ads through biometric techniques, will present the results of a study of how award-winning ads.

For the study, EmSense surveyed 200 people, ages 18 to 54, in New York and San Francisco. The study measured their biosensory responses to 19 commercials that won awards last year at the International Advertising Festival in Cannes, France, and ads that won Effie Awards last year from the New York the American Marketing Association.

The study looked at spots like a commercial for Apple with characters playing “PC” and “Mac”; the “I Feel Pretty” spot for Nike, with Maria Sharapova, and a commercial for Tide with a talking stain on a man’s shirt.

On Madison Avenue, Cannes awards, known as Lions, are usually perceived as honoring creativity and Effie winners are typically deemed to reward effectiveness. The EmSense study sought to weigh the value of those emotional and cognitive approaches.

Some findings reinforced the conventional wisdom, said Elissa Moses, chief analytics officer at EmSense in Westport, Conn., which works for clients like Virgin Mobile USA and Coca-Cola.
Winners of Effies “tend to be a little less emotional and use rational claims a bit more” than winners at Cannes, Ms. Moses said, and ads that won Lions tended to be much better liked than their Effie counterparts.

But surprisingly, “there are very important similarities” between the two types of winners, she added, which can help guide future campaigns.

Fifteen of the 19 Cannes and Effie winners engaged consumers faster than average spots, Ms. Moses said. “Typically, a spot engages with viewers in 5 to 7 seconds. The Cannes and Effie ads engaged, whether emotionally or cognitively, in 1.5 seconds.”

Whichever award the commercials won, they had an equal effect on purchase consideration and on brand favorability, Ms. Moses said.

Although winners of Lions are replete with emotional appeals meant to engage viewers, they also use what Ms. Moses called a “cognitive jolt,” a twist or surprise, to earn interest.
For example, viewers were startled by a car crash in a Volkswagen spot and by a dropped call in a Cingular ad.

Some consumer advocates question the role of biometrics in ad research. They worry that blending “Weird Science” with “Mad Men” will give marketers an unfair advantage over consumers.

“The role of neuromarketing is to understand how people feel and react,” Ms. Moses said. “It in no way sets out to meddle with normal, natural response mechanisms.”
Her opinion was echoed by Robert E. Knight, the director of the Helen Wills Neuroscience Institute at the University of California, Berkeley, who is also the chief science adviser at NeuroFocus.

“We’re not trying to predict an individual’s thoughts and actions and we’re not trying to input messages,” Dr. Knight said.

Before Nielsen teamed up with NeuroFocus, Mr. Stagliano said, “we were concerned how people would respond,” but after a test at the CBS Television City research laboratory in Las Vegas, the reaction was “overwhelmingly positive.”

“Respondents didn’t feel like they were being probed or anything,” Mr. Stagliano said.

Source: NY Times

Subliminal Branding Can Alter Behavior, Study Finds

No word on whether IBMsubjects got geekier
A joint study from Duke University and the University of Waterloo suggests subliminal messages work for established brands like Apple and Disney.
One study gave 341 students a "visual acuity test," where they were asked to track a multicolored box on a screen while keeping a tally of numbers that appeared in the center, reports CNET.

Unbeknownst to them, the students were sometimes exposed to either an Apple logo or an IBM logo for 30 milliseconds before the box appeared.
After the test students were asked to list all the uses for a brick they could think of. Those who saw the Apple logo were more prone to give creative responses than those who saw the IBM logo.

Researchers also tried a test with logos from The Disney Channel and E!, a celebrity channel. Those that saw the Disney logo behaved more honestly than those who saw the E! Channel logos.
Source: MarketingVox

10 Things You Need to Know About Consumers

Sometimes they can be surly, but where would you be without them?

1. They're mouthy.The polite way to say it is "unmediated discourse." It means that online, anyone can and will call you a dog. They also may write you love letters. Those who are passionate about your company will make it their mission to spread the word. So, thrill them.

2. They'd rather listen to each other than to you. When it comes to buying, the opinions of their peers carry enormous weight. According to Deloitte's Consumer Products group, 62 percent read online reviews written by their peers, and of those who do, more than eight in 10 said they were directly influenced by these reviews.

3. They're moving targets - literally. There are now 243 million mobile phone users in the United States, sending nearly 1 billion text messages a day. They're increasingly watching video and listening to music via their phones. These little machines are their best friends - and they could be yours, too.

4. They're snackers, constantly scarfing down tiny chunks of media. They scan the headlines in their RSS reader, tap into video shorts at work, speed-read online news, watch TV shows in fragments on the phone as they navigate the day. Content wolfed down this fast needs to be easily digestible.

5. They need to be free. There's so much free media online, it's tough to get someone to register for your walled garden. Nor do they want to pay for content, with the exception of highly desirable movies and music. As The New York Times discovered, ads can support content better than subscription fees.

6. They love gadgets, even the digital kind. Widgets - those mini-apps that display content on a Web site, blog or desktop screen - are the fastest-growing online application, reaching 40.3 percent of U.S. Internet users, according to comScore. Google's Open Social initiative could quickly double that. Marketers will pile on.

7. They've gotten over the whole privacy thing. After you've posted photos of your water birth right alongside your water bong and videos of drunken shenanigans next to the story of your appendectomy on your blog, do you really care that Google is keeping track of your search queries?

8. They've got game.Over 40 percent of U.S. households have a video game console system, while over 120 million people play video or computer games, according to DFCIntelligence. Increasingly, those games contain product placements and ads.

9. They're video maniacs. Every age group is tuning in online, according toadvertising.com, with an equal breakdown between men and women. The most-watched content is not music or movie trailers, surprisingly, but news (though this is tricky because Perez Hilton counts as news). While online viewers would rather not have ads at all, they'd rather watch them than pay for content.

10. They still haven't found what they're looking for. An iProspect survey found that 57 percent of consumers agree with "search is becoming more important to me." At the same time, offline media is increasingly driving their searches, so cross-media integration is more key than ever.

Source: Mediapost

Report: Online Reviewers Are Good People

The vast majority of consumers who post online reviews are overwhelmingly motivated by goodwill and positive sentiment, according to a Bazaarvoice survey conducted by the Keller Fay Group, which surveyed some 1,300 online reviewers, writes MarketingCharts.

Fully 90 percent of respondents say they write reviews to help others make better buying decisions, and more than 70 percent want to help companies improve the products they build and carry.

The study also found that 79 percent write reviews in order to reward a company, and 87 percent of the reviews are generally positive in tone.

The new survey data provides additional insight into previous analysis from Bazaarvoice, which revealed that positive reviews outweighed negative reviews 8 to 1.

"Bazaarvoice trend analysis has shown that product and service reviews are very positive, with an average rating of 4.3 out of 5," said Brett Hurt, founder and CEO of Bazaarvoice.

"This study helps us understand why we see such high levels of positive feedback. The customer's motivation for posting reviews is primarily that they want to help others make better purchase decisions. These customers provide a vital source of authentic content to help others find the best products for their individual needs."

Among other findings of the new survey:

• Reviewers are active online participants who post reviews as a way of giving back to the review community (79 percent).
• Reviewers purchase products online (85 percent), send more than 10 emails a day (77 percent), and engage in social networks (25 percent).
• 20 percent of reviewers post messages on other people's blogs or chat rooms; 19 percent post on independent product-review sites such as ePinions or CNET; and significantly more post directly on a retailer's own website.

• Highlighting the prevalence of multichannel shopping, the survey also found that over 65 percent of reviewers have returned to the retailer's site to leave an online review about an offline purchase.
• Nearly 60 percent of reviewers have told friends and family about their product experience.

"These results indicate that reviewers are motivated to help others and give back to the online community, not to knock down brands," said Brad Fay, chief operating officer of the Keller Fay Group.

"In fact, online reviewers tell us they want to reward brands that perform well. This debunks a major myth about word-of-mouth and should encourage companies — and CMOs — to be more comfortable with 'letting go' and inviting consumers to talk about their experiences."

About the study: Survey data on over 1,300 reviewers who posted one or more reviews to Bazaarvoice client websites was collected online using the Inquisite Survey System. The online survey ran from August to October 2007.

Source: Marketing Charts

American Leisure: Reading & TV Down. Computer Use Up

Americans' favorite leisure activities are reading, TV-watching and spending time with friends and family - the same top three as in 2004, but with lower percentage of people citing them, according to a Harris Poll, writes MarketingCharts.

Also according to the results of the survey:

• Over one-third (35 percent) cited reading in 2004, but this year that is down to 29 percent.
• TV watching has dropped from 21 percent to 18 percent.
• Spending time with friends and family has dropped from 20 percent to 14 percent.
• Computer activities has risen from 7 percent to 9 percent.
• Going to the movies has dropped from 10 percent to 7 percent.

Biggest Changes

The largest increases in popularity in the past 12 years - since 1995, when this survey was first conducted - are the following:

• Computer activities (not surprisingly) - up seven points, from 2 percent to 9 percent.
• Watching sporting events (up four points)
• Exercise (up three points)
• Crafts (up three points)

The biggest declines in popularity over the last 12 years are in TV-watching (down seven points), sewing/crocheting (down five points), entertaining (down four points) and swimming (down four points).

Hours Working and Available for Leisure

The number of hours spent working (including housekeeping and studying) dropped from a median of 50 hours in 2004 to a median of 45 hours this year - the lowest since 1975, when it was at 43 hours.

The number of hours available for leisure per week has not changed much since 2004. It is now 20 hours; in 2004 it was 19 hours.

About the survey: The Harris Poll was conducted by telephone within the United States between October 16 and 23 among 1,052 adults (age 18 and over). Figures for age, sex, race/ethnicity, education, region, number of adults in the household, size of place (urbanicity) and number of phone lines in the household were weighted where necessary to bring them into line with their actual proportions in the population.

Source: MarketingVox

Report: 4 in 10 plan to shop on Black Friday

More than 4 in 10 U.S. consumers (44 percent) say they plan to shop on the day after Thanksgiving - "Black Friday" - and more than half say they rely on advertising and word-of-mouth for information on products, according to the findings of an Accenture survey, reports MarketingCharts.

Among the key findings of the Accenture Holiday Retail Survey 2007:

• Nearly two-thirds (62 percent) cite advertising as their primary source to learn about holiday products. More than half (55 percent) cite word of mouth. Fewer consumers consult retailer and manufacturer websites (39 percent and 23 percent, respectively).

• Nearly six in 10 respondents (57 percent) said they will set a budget for holiday gift buying before heading to the stores, but about half (51 percent) of respondents said they are likely to overspend their budget.

• More than two-thirds (70 percent) of respondents are concerned about the safety of products made in China:
  • Almost half (48 percent) said they have chosen not to buy items manufactured in China, and 9 percent said they have returned an item made in China.
  • More than a third of respondents (37 percent) said they are unconcerned about where the goods they buy are made.
• When asked what bothers them most about holiday shopping in stores, the greatest number of respondents - 77 percent - cited crowded malls, followed by long lines (65 percent).

• About half of respondents (49 percent) said that gas prices will not affect their holiday spending, but nearly the same amount (45 percent) said they will make fewer shopping trips this year due to gas prices.

Findings regarding 'green' shopping:

• Almost half of respondents (47 percent) said concern for the environment is an important influence on their shopping behavior, and nearly six in 10 (57 percent) said they are willing to spend more on "green" products.

• More consumers seek environmentally friendly products than look for environmentally friendly retailers (60 percent versus 46 percent).
• Some shoppers, however, are influenced by retailers' environmental practices, with 35 percent of respondents saying they are influenced by retailers' recycling programs.

MarketingCharts provides additional findings, including on shoppers' attitute toward 'hot' products and gift cards.

About the study: The web-based survey of 532 U.S. consumers age 18 and older was fielded in November 2007.

Source: MarketingVox

Spending on social media to outpace traditional marketing by 2012

New SNCR-led research indicates that spending on social media and conversational marketing will outpace that of traditional marketing by 2012, according to a study conducted by TWI Surveys, Inc. on behalf of the Society for New Communications Research and Joseph Jaffe. That finding and others are featured in Jaffe’s new book, Join the Conversation. The book reveals what marketers must do to become a part of the dialogue and how to leverage conversations in ways that benefit businesses, brands and lives.

In order to research his topic, Jaffe engaged the SNCR to conduct a study to assess senior PR and marketing communications professionals’ awareness and knowledge of social media and conversational marketing and their priorities for including it in their strategies and initiatives.

The findings of the study indicate that while social media adoption is still very much in its infancy, communications professionals foresee significant growth in adoption and spending over the next five years, and predict that conversational marketing will outpace traditional marketing by 2012.

Of the 260 respondents:

* 70% are currently spending 2.5% or less of their communications budgets on conversational marketing

* Two-thirds plan to increase their investment in conversation within the next twelve months

* 57% project that in five years they will be spending more on conversational marketing than traditional marketing

* 23.8% believe that spending on conversational marketing will be the same as traditional marketing in five years

In total, 81% of all respondents project that by 2012 they will spend at least as much on conversational marketing as traditional marketing.

“The rise of digital media continues to make significant inroads into the mainstream media pie,” said Joseph Jaffe. “Conversational marketing investment will make up the third pillar of the new marketing model.”

The journey ahead will not be without challenges, most notably in the areas of talent and capabilities, change management, research and metrics and organizational dynamics. Respondents noted that the primary obstacles currently preventing them from investing more in conversational marketing include:

“Manpower restraints” - 51.1%

“Fear of loss of control” - 46.9%

“Inadequate metrics” - 45.4%

“Culture of their organizations” - 43.5%

“Difficulty with internal sell-through” - 35.8%

“The results of this research indicate that the industry is currently in a state of cautious experimentation with regard to social media and conversational marketing,” commented Jen McClure, SNCR executive director. “But most organizations seem to be preparing themselves for a significant shift in strategies and resource allocation.”

“This all suggests that over the next few years we will see not only massive budget reallocations, but also tremendous strategic and cultural realignments and organizational shifts,” added Jaffe. “To keep brands fresh, relevant and plugged into the conversation, marketers will need to be proactive in terms of embracing and investing in ongoing, well-structured experimentation.”

Source: New Communications Review

New Study Says Successful Ads Tell Stories

Want to market your brand better? Then tell a story. That's the top finding from an intensive three-year study titled On the Road to a New Effectiveness Model released this month. The Advertising Research Foundation and American Assn. of Advertising Agencies, both based in New York, set out to measure consumers' emotional responses to TV advertising. What they discovered is that advertisements that tell a branding story work better than ads that focus on product positioning. Thirty-three ads across 12 categories—from brands like Budweiser, Campbell's Soup and MasterCard—were analyzed by 14 leading emotion and physiological research firms. The research tools varied from testing heart rate and skin conductance of the ad viewer to brain diagnostics. "We were trying to identify patterns that could be used," said Bill Cook, ARF svp-research and standards. "We saw powerful pieces of evidence for the impact of advertising." One such pattern was that a campaign like Bud's iconic "Whassup" registered more powerfully with consumers than Miller Lite low-carb ads that essentially just said, "We're better than the other guys." Why? Because Bud told a story about friends connected by a special greeting. The report contends that in many ways, advertising is stuck in the past. The 20th century was dominated by a one-way transactional focus where ads were pushed at consumers. Today, consumers interact with ads to "co-create" meaning that is powered by emotion and rich narrative. "Advertising has been standing on the sidelines, stuck on the language of positioning," said Randall Ringer, managing director and co-founder, Verse Group, New York. "Telling a story about the brand is more engaging, memorable and compelling than telling a bunch of facts. What worked 30 years ago with a 30-second spot doesn't work today." Other ads that struck a chord positioned the brand itself playing the archetypical role of hero. In Campbell's "Orphan" ad, it is about bringing together a mother and her foster child. Ad research firm Gallup-Robinson, Pennington, N.J., found that the spot, which showed a little girl's sadness and anxiety melt away into a soft smile once she was given a bowl of soup, generated 80% purchase intent. Most viewers measured said it was believable. A similar study from Ameritest, Albuquerque, N.M., found it received 42% purchase intent compared to a category norm of 33%. But for such storytelling ads to be truly effective, the plots need to tie in to a positive brand message. "When the emotional peaks align with the presence of the brand, or the impact of the brand in the story, the emotional connection with the brand is greatest," Cook said. While a MasterCard "Priceless" campaign, featuring a father taking a son to a baseball game, successfully achieved this impact, not all storytelling ads work. A United Airlines spot that showed an emotional story of a businessman returning home was deemed unimaginative by 68% of those surveyed by TNS Ad Eval. Eighty-four percent of respondents said the humor came through loud and clear for Southwest Airlines' "Want to get away" ad, which showed a woman accidentally destroying a man's medicine cabinet while snooping. A Nissan Maxima spot also failed. At first blush it appears a couple is talking about sex, but in fact they are talking about the car. "Negative levels were so high for many people over the brashness of the guy and his seemingly erotic proposal that they were unable to switch over to more positive feelings once the Maxima appeared," said the report. The study does not discuss the ROI of the ads for their marketers. Mark Truss, director of brand intelligence at JWT, New York, said the storytelling theory is correct, but the industry still lacks a way to prove it. "Without the tools to measure and link back to business metrics, marketers and advertisers are not going to embrace [this approach]."

Source: Brandweek

Check your web reputation

Enabled by new information technologies, consumers have real-time access to information, insight and analysis, giving them an unprecedented arsenal to help make purchase decisions. At the same time, these technologies provide a voice and a venue for anyone with something to say, allowing individuals to shape reputations of consumer companies and their products, according to a new Deloitte study.

To build their knowledge arsenals, consumers are turning to online reviews in large numbers – and those reviews are having a considerable impact on purchase decisions. According to a recent survey by Deloitte’s Consumer Products group, almost two-thirds (62 percent) of consumers read consumer-written product reviews on the Internet. Of these, more than eight in 10 (82 percent) say their purchase decisions have been directly influenced by the reviews, either influencing them to buy a different product than the one they had originally been thinking about purchasing or confirming the original purchase intention. Interestingly, while the percentages were slightly higher for the younger generations, all age groups are reading and acting on online reviews at significant rates. In addition, the reach of consumer reviews isn’t limited to the online world; seven in 10 (69 percent) consumers who read reviews share them with friends, family or colleagues, thus amplifying their impact.

“This increasing market transparency can adversely impact the margins, market share and brand equity of consumer products companies,” said Pat Conroy, vice chairman and US consumer products group leader at Deloitte & Touche USA LLP. “In the past, clever marketers and advertisers shaped brands, but now consumers are increasingly empowered, everyone has a voice, and information and opinions are instantly dispersed. Consumer product companies need to determine how best to capitalize on this new landscape. Clearly, there will be consequences for those who don’t.”

While the survey found that reputation and word of mouth – both factors that are greatly influenced by online reviews – are the key factors that influence consumers’ decisions to purchase a new product or brand, many other factors also play a significant role. “Better for you” ingredients or components, eco-friendly usage, and sourcing were each cited by approximately four in 10 consumers as important factors in making purchase decisions, while eco-friendly production and/or packaging was cited by more than one-third (35 percent). “Information about products, pricing, ingredients and sourcing, as well as corporate practices around labor, environment, healthcare and other issues is now instantaneously available to potential customers – and, increasingly, consumers are making decisions based on this information,” commented Conroy.

Recent recalls of imported products are also contributing to this trend: one-third of survey respondents (33 percent) said that, as a result of recent recalls, they now look for more information on the packaging/product and almost one in five (18 percent) said they now look for more information on the Internet or in other locations.

“As knowledge proliferates, there is a tendency for products to commoditize,” remarked Conroy. “In order to successfully compete, it’s imperative for consumer brands to build and maintain their images, create differentiation, and enhance loyalty. For example, consumer product companies with exemplary supply chains can achieve differentiation by making their processes more transparent. Embracing higher-than-required quality and safety standards can reassure customers and built trust. And co-opting customers to create value with the company can create not only loyal customers, but also brand emissaries.”

About the Survey
The survey was commissioned by Deloitte & Touche USA LLP and conducted online by an independent research company between August 28 and September 6, 2007. The survey polled a sample of 3,331 consumers over the age of 16. The margin of error for the entire sample is plus or minus two percentage points.

Source: Deloitte & Touche USA LLP - United States (English)