Commentary

Consumers Trust Each Other - Brands, Not So Much

One of the big ideas behind the rise of social-media marketing is that a personal endorsement of a product or service by a friend will necessarily carry more weight in individual purchase decisions than a promotional message from the brand itself. There hasn’t been much evidence to support this seemingly self-evident idea – until now.

 

A new study by a research team including academics at Northeastern University and the University of Texas at San Antonio aims to quantify the difference by using measures of trust and awareness generated by messages received from brands and peers, according to Physio.org.

Specifically, the study, “Improving Consumer Mind-Set Metrics and Shareholder Value through Social Media: The Different Roles of Owned and Earned,” analyzed the difference between messages delivered by “owned social media,” referring to the company’s own branded social channels, and “earned social media,” referring to messages shared between consumers.

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The study tracked sentiment across social media for 45 brands across almost two dozen categories, as a way of gauging social media’s impact in brand awareness, purchase intent and customer satisfaction, using sentiment data from platforms including Twitter, Facebook and YouTube.

The research further correlated these measures with stock prices to show the link between brand success and shareholder value.

Overall, the study found that messages delivered via owned social media were less likely to increase purchase intent than messages delivered via earned social media. Owned social media was effective in raising brand awareness and customer satisfaction.

Thus, a 10% increase in earned social media activity, as measured across a brand’s total social following, produced a 6% increase in purchase intent. An increase in direct communications delivered via owned social media actually resulted in a slight decline in purchase intent, depressed -3%. 

On a more positive note, a 10% increase in owned social media activity was associated with a 7% increase in brand awareness and a 4% increase in customer satisfaction. But earned social media once again enjoyed a substantial advantage in awareness: a 10% increase in earned activity was associated with a 12% increase in brand awareness and a 3% increase in customer satisfaction.

Speaking to Physio.org, Northeastern marketing professor Koen Pauwels summed up the study’s implications for social-media marketing: “Rather than spending marketing dollars on owned social media to persuade customers to buy their products, marketers and social-media managers should craft their OSM messages to target customers to improve brand awareness and customer satisfaction.

"Due to the value-relevance of customer satisfaction, OSM that is targeted toward helping customers post-purchase, addressing their concerns, and reinforcing their purchase decisions is much more valuable than OSM crafted to persuade customers to buy the firm’s products.”

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