Consumer Generated Media not only influences online consumers, it can get them to change their minds. That’s according to a new study from market research firm Compete focusing on travel and auto buyers. The report shows CGM has spurred 24 percent of those consumers to alter decisions about a vehicle purchase or travel reservation.
“We didn’t expect [CGM] to have quite that much of an impact,” said Compete Director of Marketing Cynthia Stephens.
The in-house study also found 51 percent of respondents used CGM to help narrow a choice, 23 percent employed consumer-created information to confirm a decision and 15 percent used it to pick their top choice.
Over 23 percent of those surveyed said consumer review sites influenced their purchase choices, while 12.4 percent noted online advice from consumers did so. Advice from family and friends and corporate Web sites, however, had more impact. Friends and relatives influenced 38.3 percent of participants, and around one-third said company sites had an effect.
The company isolated CGM-influenced buyers, or those affected by CGM sources such as consumer review sites and consumer advice online, from the broader group of respondents. Among CGM-influenced buyers, 70 percent said CGM had an impact on their decision.
“Clearly, very few people online are going to buy a car without hearing from other owners,” said Bill Stephenson, VP and practice lead for the automotive vertical at online word-of-mouth tracker Nielsen BuzzMetrics. “What really drives the needle, especially in the auto industry, is the transparency created,” he continued.
CGM-influenced respondents were also asked about the credibility of CGM versus other information affecting purchases. Seventy-one percent of CGM-influenced buyers found CGM credible; 73 percent said expert advice is credible; and less than half that, 35 percent, said information coming directly from brands is credible.
The study comprises online survey responses from 650 panel members who made a purchase in the last six months and visited blog review sites, message boards or online communities. Three-quarters of respondents were between 25 and 54 years of age. Compete chose to survey in-market travel and auto buyers because products in those categories result in highly-considered purchases,” Stephens said.
Consumer review sites influenced 21.2 percent of travel purchasers surveyed, while online consumer advice influenced 11.3 percent. The company estimates $2 billion of online travel purchases is annually affected by CGM. “This is a wake up call for marketers,” said Stephens. “There are some big dollars at stake out there.”
The research firm also inquired about using CGM as a reference when purchasing items outside the travel and auto realms. Over 63 percent of participants said they would be likely to visit sites where they can learn from others when researching cameras; nearly 60 percent said the same when it comes to large appliances. Significant financial purchases scored lower in terms of CGM impact: 33.5 percent said they’d use CGM when studying mortgage refinance offers, 30.9 percent when investigating home equity loans and 28.3 percent when looking into brokerage accounts.
Even when not prompted to by a company, CGM-influenced buyers are more apt to create their own CGM than those who weren’t influenced by CGM, said Stephens. The survey shows 25.4 percent of CGM-influenced purchasers posted about a product on a consumer review site compared with 12 percent of the non-influenced. More than 12 percent of the CGM-influenced posted to a blog after a purchase versus 4.2 percent in the non-influenced group. 68.6 percent of those influenced by CGM told a friend compared with 58.2 percent among the non-influenced.
“The impact is bigger than just what happens before you’re buying,” said Stephens.
To make the most of CGM, the research outfit recommends marketers analyze in-market consumers, examine the impact CGM has on their product preferences by studying online behavior, and quantify the number of in-market consumers who change their minds as a result of CGM.
They're arguably the most annoying video ad formats in existence, but soon they'll be a thing of the past, at least on YouTube.
On Thursday, Twitter reported its earnings for Q4 2016, and the results have raised questions about the company's long-term future.
From its $1.5 billion air cargo hub to its growing network of contract last-mile delivery drivers, Amazon is increasingly looking like a logistics company; but shipping and logistics giant FedEx isn't sitting idly by.
Havas Group's Meaningful Brands report delivers sobering news for brands: consumers wouldn't care if 74% of the brands they use disappeared off the face of the earth.