Nine out of every ten consumer conversations involving products or services feature at least one named brand, demonstrating the power of consumers as 'brand transmitters' - whether the message is good or bad - according to research by InTV.
The study found that banking and finance is the most talked-about sector among consumers, with 68% of respondents chatting to others on this topic on a monthly basis, and 11% on a daily basis. However, the brands they love to talk about most are in the smartphones/tablets sector, with Apple accounting for 70% of brand conversations in this category, followed by Samsung at 53%.
In the automotive sector the top four most talked about brands are all German, with Audi at 39% of brand conversations in the category, followed by Volkswagen at 35%, BMW at 34% and Mercedes Benz at 32%.
InTV - a cooperative group of independent TV channels comprising BBC World News, France 24, ESPN Classic, euronews, EuroSport, National Geographic, Sky News, CNBC and TV5 Monde - conducted the study into the power of word of mouth (WOM) across major European markets in order to identify what gets consumer conversations started, what influences their attitudes to brands and ultimately to quantify the impact that WOM has on the 'purchase funnel'. The study specifically examined six major advertising product sectors (Banking/Finance, Automotive, Smartphones/Tablets, Travel Destinations, Airlines and Watches).
So who are consumers actually talking to? According to the research only 4% of conversations about products and services are carried out through social media channels, dispelling the misconception that social media is the golden bullet when it comes to generating buzz. Instead, 90% of these conversations actually happen offline in the real world among real people. Some 83% are with family and friends, while a large number are with acquaintances at work (28% with colleagues and 10% with business contacts).
However, while WOM is clearly important, it is equally vital to ensure that when people are talking about your brand it's in a positive way - but it seems that many brands are still not getting to grips with this. While the most regularly talked about sector was banking/finance (which was talked about on a monthly basis by 68% of respondents) some 80% of these conversations including mention of at least one brand. However, the big problem for this specific sector is tone of voice: some 30% of brand-oriented conversations were negative in tone, compared to only 24% being positive in tone. All other categories saw significantly higher positive brand conversations compared to negative. The most positive tone of voice was achieved in the watches sector, followed by automotive.
But what is the real value to brands of these consumer conversations? In 27% of the category conversations examined, consumers believe that they have taught others something new about a certain product or brand, and this rises to 31% for watches and 36% for automotive. More importantly, 8% of these conversations made someone else buy or try a certain brand. For large advertisers, leveraging an additional 8% of sales through WOM could equate to a significant amount of incremental business.
For brands wishing to harness the power of WOM, the key is to identify and target 'Champions' - those consumers with influence, and who talk to a lot of people, who provide lots of information and who have the ability to convince others. The study found that 17% of consumers act as a champion in at least one of the six product categories studied and their influence is far-reaching, having a major impact on the purchase funnel. In fact, champions are more than 40% more likely than average to trigger others to look up information on products or brands, 90% more likely to convince others to choose a certain brand, and 1.5 times more likely than average to get them to buy or try a certain brand. Interestingly, in the automotive sector, champions are 3.0 times more likely than average to influence somebody else's purchase.
"Social media is undoubtedly an important channel for creating brand buzz, but our research showed that these conversations only equate to a small proportion of brand conversations, with nine out of ten happening face to face or on the phone," concluded Belinda Barker, chairperson for InTV. "This validates our view that advertising should be the start of a conversation - a positive conversation about brands and products that creates positive advocacy, drives purchase intention and increases lifetime value."