Everyday people talk about products they use and what things they like and/or dislike about them. The medium for these conversations varies and could be anywhere from a blog to a chat room to a face to face conversation. But when it comes time for a consumer to actually purchase a product, whose recommendation are they most likely to trust?

Mintel recently conducted a survey to find out just who the most influential recommendations come from. According to their data, 34% of U.S. Internet users who bought a product or service because of a recommendation, were told about the product/service by a friend or relative. 25% of those surveyed received the recommendation from a spouse or domestic partner. Interestingly, only 10% of people said that the recommendation came from a blogger or a chat room. This data shows that a personal recommendation from someone you know and trust is still extremely valuable.

There is also the question of what motivates people to recommend a product or service to others. As seen in the chart below, the number one reason is price.

Word-of-mouth marketing can be extremely beneficial for the right product or service. But to do it successfully you need to have a high quality product and provide a mechanism that allows people to quickly and easily tell others about it.

The FTC has proposed to add additional hypotheticals to to their guide concerning the use of endorsements for advertising purposes.  The Commission’s general principle applies that any material connections between the endorser and the advertiser should be disclosed to several new forms of marketing, namely blogs, discussion boards, and “street teams.” For example, if a blogger receives a free game system and then posts a favorable review of it on his blog, he should clearly and conspicuously disclose that he received the gaming system free of charge. If an employee of an MP3 manufacturer posts positive comments about his company’s device on a message board, he should clearly and conspicuously disclose his relationship to the company. If members of a “street team” are compensated for talking about a product with their friends, they should disclose this fact.

Given the prevalence of these advertising practices and the number and scope of the proposed substantive changes to the Guides, it is likely that most companies’ marketing campaigns will be affected. Companies seeking to stay ahead of the regulatory curve are well-advised to stay informed of these proposed changes and formulate a strategy to address the new FTC guidlines.  For more information on these FTC changes – CLICK HERE. 

With summer comes family vacations, and according to a recent study conducted by OTX, families are using the Internet to make travel plans more often then not. Over 70% of those surveyed planned on taking a family trip this summer, and about 75% of those same people will be using the Internet to make their plans. With the economy struggling, consumers are likely to focus on price, which is exactly what advertisers in the travel industry should emphasize.

When deciding where to take their vacation, families in the U.S. rely on a few sources for information. About 50% of respondents referred to friends and family for recommedations and information, while only 21% used travel books. For those that use the Internet when looking for a destination, 72% use search engines, 58% use online booking sites, 26% use consumer testimonial sites, and 19% use travel information sites.

As seen in the chart below the number of consumers who use the Internet to make travel plans has been increasing since 2000. 

TNS Media Intelligence/Cymfony recently surveyed senior marketing executives worldwide and released study in with some very interesting findings with regard to social media. Below are some of the findings.

• 49% of senior marketing executives believe that social media should be monitored at the executive level and be allocated significant resources
• 30% of senior marketing executives agreed that social media is an unconventional new opportunity that businesses must grasp with a sense of urgency
• 95% of senior marketing executives think that social media will grow significantly during the next five years
• Uses of social media: 37% said to gain consumer insight, 21% said to build brand awareness, 18% said to increase customer loyalty
• 88% of U.S. senior marketing executives (65% global) agreed that reading and analyzing social media to understand unfiltered consumer perceptions would have the most impact on the future of their businesses
• Word-of-Mouth campaigns had second highest impact
• 50% of senior marketing executives said creating a user community of bloggers to provide user feedback is the most effective use of social media
• 47% of senior marketing executives said using social media vehicles to generate a viral campaign would also be very effective in a product launch