GLOBAL TRUST IN ADVERTISING - Nielsen Global Media

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GLOBALTRUST INADVERTISINGWINNING STRATEGIES FOR ANEVOLVING MEDIA L ANDSCAPESEPTEMBER 2015Copyright 2015 The Nielsen Company1

S TA R T W I T HR E A C H, E N D W I T HREACTIONAROUND THE WORLD2 Branded websites are the second-most-trusted advertising format,behind recommendations from friends and family. Two-thirds trust consumer opinions posted online—the third-mosttrusted format. The proliferation of online ad formats has not eroded trust intraditional paid advertising channels. Roughly six-in-10 say they trustads on TV (63%), in newspapers (60%) and in magazines (58%). Millennials show the highest levels of trust in 18 of 19 advertisingformats/channels, including TV, newspapers and magazines. Humor resonates most strongly in Western markets; health-themedads are rated highest in Latin America, and ads depicting real-lifesituations are most appealing in Asia-Pacific and Africa/Middle East.GLOBAL TRUST IN ADVERTISING REPORT

Three factors form the foundation of a successful ad campaign:Reach, resonance and reaction. Reach the right audience, and ensureyour advertising resonates positively so you can generate the desiredreaction. Simple–right? Wrong.The advertising landscape is evolving at an extraordinary pace as mediaproliferation and technology advances create new ways of connectingwith consumers. We watch videos on phones, stream music on laptopsand read newspapers on tablets—sometimes all at once. Needing toreach, resonate with, and get a reaction from the right audience ina world of choice can make it difficult to decide where to allot one’sadvertising dollars.While there isn’t one simple rule for maximizing advertisingeffectiveness in such a saturated market, understanding how consumersfeel about the ads served on the various media platforms they use everyday is a good place to start.“While advertisers have started to follow consumers online, about a third of onlineadvertising campaigns don’t work—they don’t generate awareness or drive any liftin purchase intent,” said Randall Beard, president, Nielsen Expanded Verticals. “Asconsumers are in control of how they consume content and interact with brandsmore than ever, understanding ad resonance across screens is the only way tosuccessfully drive memorability and brand lift today.”The Nielsen Global Trust in Advertising Survey polled 30,000 onlinerespondents in 60 countries to gauge consumer sentiment about 19paid, earned and owned advertising mediums. The results identify the adformats resonating most strongly with consumers and those that haveroom to grow. Importantly, consumers around the world weigh in on theplatforms most effective in driving action. Consumers also tell us thetypes of messages they most enjoy—and not surprisingly, they differ bygeneration.ABOUT THE GLOBAL SURVEY METHODOLOGYThe findings in this survey are based on online respondents in60 countries. While an online survey methodology allows fortremendous scale and global reach, it provides a perspective onlyon the habits of existing Internet users, not total populations.In developing markets where online penetration is still growing,audiences may be younger and more affluent than the generalpopulation of that country. In addition, survey responses are basedon claimed behavior rather than actual metered data.Copyright 2015 The Nielsen Company3

THE CIRCLE OFINFLUENCE IS WIDEThe most credible advertising comes straight from the people we know andtrust. More than eight-in-10 global respondents (83%) say they completelyor somewhat trust the recommendations of friends and family. But trustisn’t confined only to those in our inner circle. In fact, two-thirds (66%) saythey trust consumer opinions posted online—the third-most-trusted format.“The power of digital ad formats cannot be underestimated, as they offermany advantages for achieving effective reach,” said Beard. “But few brandshave mastered online word-of-mouth marketing techniques, the resultsof which can go viral very quickly. Passionate brand advocates can bepowerful allies to amplify your message, but you need to give them a reasonto talk. Evolve the relationship from a one-way sales pitch to a two-wayconversation. And be transparent and accountable. Online brand advocatescan quickly become adversaries with the power to damage credibility andreputation if things go wrong.”Owned (brand-managed) online channels are also among the most trustedadvertising formats. In fact, branded websites are the second-mosttrusted format, with 70% of global respondents saying they completely orsomewhat trust these sites. In addition, more than half of respondents(56%) trust emails they signed up for.EARNED AND OWNED MEDIA REMAIN THE MOST TRUSTED AD FORMATSPERCENT OF GLOBAL RESPONDENTS WHO COMPLETELY OR SOMEWHAT TRUST ADVERTISING FORMATEARNEDOWNED2015Recommendations from people I knowDIFFERENCEFROM201383%Branded websites70% 1%Brand sponsorships-2%Editorial content, such as newspaper articles66%DIFFERENCEFROM2013-1%Consumer opinions posted online66%201561%0%Emails I signed up for-1%56%0%Source: Nielsen Global Trust in Advertising Survey, Q1 2015 and Q1 20134GLOBAL TRUST IN ADVERTISING REPORT

TRUST INTRADITIONALADVERTISING ISSTILL STRONGDespite continued media fragmentation, the proliferation of onlineformats has not eroded trust in traditional (offline) paid channels. TV,newspapers and magazines remain trusted advertising formats. Morethan six-in-10 global respondents say they completely or somewhat trustTV ads (63%), up one percentage point from 2013. Slightly fewer trustads in newspapers (60%) and magazines (58%), which fell one and twopercentage points, respectively, from two years ago.Trust in paid online and mobile ads has stayed relatively consistentsince 2013. Almost half of global respondents say they completely orsomewhat trust online video ads (48%, no change from 2013), adsserved in search engine results (47%, down one percentage point) andads on social networks (46%, down two percentage points). About fourin-10 global respondents trust online banner ads (42%, no change) andmobile advertising (43%, down two percentage points). Just over onethird say they trust mobile text ads (36%, down one percentage point).“Brands have been steadily increasing their digital ad spend as they getincreasingly comfortable with digital advertising and measurement, but TVformats still deliver the highest unduplicated reach (i.e., the ad reaches eachaudience member only once) of 85%-90%,” said Beard. “While digital ads can offerconsiderable benefits—such as precision-focused campaigns, in-flight adjustmentsand more creative options—moving from TV to an all-display digital plan is a boldmove for any marketer. Consider a mix of both offline and online channels for thebest ROI.”Copyright 2015 The Nielsen Company5

TRUST IN TRADITIONAL AND DIGITAL AD FORMATS REMAINS STABLEPERCENT OF GLOBAL RESPONDENTS WHO COMPLETELY OR SOMEWHAT TRUST ADVERTISING FORMATPAID - ONLINE/MOBILE2015PAID - TRADITIONAL2015DIFFERENCEFROM2013Ads on TV63%DIFFERENCEFROM2013Online video ads 1%Ads in newspapers48%0%Ads served in search engine results60%-1%Ads in magazines47%-1%Ads on social networks58%-2%Billboards and other outdoor advertising56%-2%Ads on mobile devices-1%TV program product placements55%46%43%-2%Online banner ads0%Ads on radio42%0%Text ads on mobile phones54%-3%54%-2%36%-1%Ads before moviesSource: Nielsen Global Trust in Advertising Survey, Q1 2015 and Q1 20136GLOBAL TRUST IN ADVERTISING REPORT

O N L I N E F O R M AT SMAKE IT EASY TOTA K E A C T I O NTrust is one thing. Action is another.Trust and action are clearly linked, but is credibility a prerequisite topurchasing? The data suggests not always: Even lower-trust formats canbe extremely effective in driving consumers to the point of purchase.The same percentage of global respondents that trust the opinions offriends and family say they take action on these opinions at least someof the time (83% each). Similarly, self-reported trust and action are thesame for branded websites (70% each).For many paid advertising formats, however, self-reported action actuallyexceeds trust. That is, more consumers say they take action than find thead trustworthy. This is particularly true for online and mobile formats.Self-reported action exceeds trust by more than double digits for adsserved in search engine results (47% trust; 58% take action), ads onsocial networks (46% trust; 56% take action) and text ads on mobilephones (36% trust; 46% take action).“The formats where action exceeds trust by the greatest margin share a commonattribute: Easy access to products/services,” said Beard. “You like it, you buy it.Online and mobile formats make it exceptionally easy for consumers to live in themoment and take quick action on the advertisement. Often, consumers simplyclick a link and they’re directed to a place where they can receive more informationor purchase the item.”Copyright 2015 The Nielsen Company7

ACTION EXCEEDS TRUST FOR MANY ADVERTISING FORMATSPERCENT OF GLOBAL RESPONDENTS WHO COMPLETELY OR SOMEWHAT TRUST ADVERTISING FORMATPERCENT WHO ALWAYS OR SOMETIMES TAKE ACTION ON FORMATTRUSTACTIONACTION EXCEEDS TRUSTADS ON TVCONSUMER OPINIONSPOSTED ONLINEADS IN NEWSPAPERS66%63%69%69%BRAND SPONSORSHIPSADS IN MAGAZINES60%63%TV PROGRAM PRODUCTPL ACEMENTS55%59%58%62%61%62%ADS SERVED IN SEARCHENGINE RESULTS47%58%46%56%ADS ON MOBILEDEVICES56%63%BILLBOARDS AND OTHEROUTDOOR ADVERTISING56%58%ONLINE BANNER ADSONLINE VIDEO ADSADS ON SOCIALNETWORKSEMAILS I SIGNED UP FOR48%53%42%50%TEXT ADS ON MOBILEPHONES43%50%36%46%ACTION IS CONSISTENT WITH TRUSTBRANDED WEBSITESRECOMMENDATIONSFROM PEOPLE I KNOWADS ON RADIO70%70%83%83%ADS BEFORE MOVIES54%54%54%54%TRUST EXCEEDS ACTIONEDITORIAL CONTENT,SUCH AS NEWSPAPERARTICLES66%63%Source: Nielsen Global Trust in Advertising Survey, Q1 20158GLOBAL TRUST IN ADVERTISING REPORT

TRUST ANDACTION LEVELSARE HIGHESTIN DEVELOPINGREGIONSAround the world, trust levels for each type of advertising formatare highest in developing markets. Latin America leads the way,demonstrating the highest levels of trust for 10 of 19 advertisingformats, with many of these representing traditional formats. Africa/Middle East shows the highest reported levels for seven of 19 formats,with these representing a mix of both online and offline formats.Finally, Asia-Pacific reports the highest levels of trust for three formats,including both ads on mobile devices and mobile text ads. Respondentsin these regions were also more likely to say they take action onadvertising formats at least some of the time.European respondents are most skeptical about advertising, with thelowest reported levels of trust for all 19 formats. They’re also least likelyto say they take action on nearly all (18 of 19) advertising formats.In North America, the results are mixed. While respondents in the regionreport trust levels below the global average for nine of 19 advertisingformats—including, most notably, branded websites—they actuallyexceed the global average for nearly as many channels (eight of 19). Andthis is the only region where trust is consistently (and considerably)higher than self-reported action.Copyright 2015 The Nielsen Company9

REGION WITH HIGHEST LEVEL OF TRUST IN SPECIFIED ADVERTISING FORMATFORMATASIAPACIFICAFRICA/MIDDLE EASTaRECOMMENDATIONS FROM PEOPLE I KNOWBRANDED WEBSITESaaCONSUMER OPINIONS POSTED ONLINEaaEDITORIAL CONTENT, SUCH AS NEWSPAPER ARTICLESADS ON TVaBRAND SPONSORSHIPSaaADS IN NEWSPAPERSADS IN MAGAZINESaBILLBOARDS AND OTHER OUTDOOR ADVERTISINGEMAILS I SIGNED UP FORaTV PROGRAM PRODUCT PLACEMENTSADS ON RADIOADS BEFORE MOVIESaADS SERVED IN SEARCH ENGINE RESULTSaADS ON SOCIAL NETWORKSaaONLINE BANNER ADSTEXT ADS ON MOBILE PHONESaaaaaONLINE VIDEO ADSADS ON MOBILE DEVICESLATINAMERICAaSource: Nielsen Global Trust in Advertising Survey, Q1 201510GLOBAL TRUST IN ADVERTISING REPORT

TRUST IS HIGHEST IN DEVELOPING REGIONSPERCENT OF RESPONDENTS WHO COMPLETELY OR SOMEWHAT TRUST ADVERTISING FORMAT BY REGIONASIAPACIFICEUROPEAFRICA/MIDDLE EASTLATINAMERICANORTHAMERICARECOMMENDATIONS FROM PEOPLEI KNOW85%78%85%88%82%BRANDED WEBSITES78%54%76%75%61%EDITORIAL CONTENT, SUCH AS NEWSPAPERARTICLES71%52%71%74%63%CONSUMER OPINIONSPOSTED ONLINE70%60%71%63%66%ADS ON TV68%45%70%72%63%BRAND SPONSORSHIPS67%43%73%70%57%ADS IN NEWSPAPERS63%44%69%72%65%ADS IN MAGAZINES62%43%65%70%62%BILLBOARDS AND OTHER OUTDOORADVERTISING60%40%64%63%57%EMAILS I SIGNED UP FOR60%41%59%65%64%TV PROGRAM PRODUCT PLACEMENTS60%35%64%64%53%ADS BEFORE MOVIES59%38%57%62%56%ADS ON RADIO54%41%62%68%60%ONLINE VIDEO ADS53%33%55%52%47%ADS ON MOBILE DEVICES50%26%49%48%39%ADS ON SOCIAL NETWORKS50%32%57%54%42%ADS SERVED IN SEARCH ENGINE RESULTS50%36%52%58%49%ONLINE BANNER ADS48%27%49%46%41%TEXT ADS ON MOBILE PHONES42%22%41%39%37%Source: Nielsen Global Trust in Advertising Survey, Q1 2015Copyright 2015 The Nielsen Company11

TRADITIONALF O R M AT SR E S O N AT ES T R O N G LY W I T HMILLENNIALSHow does age impact trust and willingness to take action? Not in theways you might expect.Not surprisingly, Millennials (age 21-34), who came of age with theInternet, have the highest levels of trust in online and mobile formats,followed closely by Generation X (age 35-49). But it’s not just onlineand mobile advertising formats where Millennials exceed the average.They also show the highest levels of trust in 18 of 19 advertisingformats/channels, including TV, newspapers and magazines, andthey’re also the most willing to take action on 16 of 19 formats.“Millennials consume media differently than their older counterparts,exercising greater control over when and where they watch, listen andread content—and on which device,” said Beard. “But even if theyrely less heavily on traditional channels, their trust and willingnessto act on these formats remains high. While an integrated, multichannel approach is best across all generations, it carries even moreimportance when reaching Millennials.”12GLOBAL TRUST