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Social Media Has Killed Consumer Trust

Social Media Has Killed Consumer Trust Image“People trust people, not brand advertising.” For the last few years, marketing analysts and social media marketers have been sharing copious studies and statistics which reiterate that sentiment. They give credit to social media for this new reality and point to the “wisdom of crowds” effect, which references the observation that people tend to believe what the masses say and share on social media, despite personal experiences or empirical evidence to the contrary. If enough people hold this belief, it must be true.

We trust the wisdom of crowds, despite the fact that we neither know the people who rate restaurants on Yelp! nor have personal relationships with many of the social celebrities who boast insane numbers of followers. Similarly, we don’t personally know many of those in our social circles or the online communities we spend so much time in. Yet, we gladly stepped in line, we trusted.

However, with every passing day, it has become more evident that social media has killed consumer trust.

Pre-social media, we called this phenomenon Bandwagonsim. As defined in the Oxford Dictionary of Psychology, the bandwagon effect is a phenomenon whereby the rate of uptake of beliefs, ideas, fads and trends increases the more that they have already been adopted by others. In other words, the bandwagon effect is characterized by the probability of individual adoption increasing with respect to the proportion of people who have already done so. Social media  amplifies this effect by allowing more people to become content creators and by facilitating more connections to more people.

It’s often said that “marketers ruin everything” and in this case, I tend to agree. I’m picking on marketers here but in reality, the blame could fall squarely on the lap of most businesses who sought to take advantage of social media. In their efforts to earn free media, brand awareness, “Likes,” mentions, and followers, business have attempted to create short cuts that generate faster results for less time and investment.

Social Media’s Dirty Little Secret: Cyber-Shilling

Cyber-shilling has become a lucrative business, offering those with cash the opportunity to receive thousands or tens of thousands of positive reviews, fans, followers, and 5-star ratings. Cyber-shilling continues to make news when businesses are sued for posting fake reviews and social networks are called out for not doing enough to prevent them. Forget social proof; social trust is what businesses should be focused on and that trust is eroding, fast.

Klout became popular for using gamification tactics to create and/or encourage social media “influencers.” In turn, the social scoring platform would sell access to these social celebrities in hopes that they would shill for corporate sponsors who shower them with product samples or free services. Klout is essentially a non-player in today’s social influence marketing game but newer players such as HelloSociety, Niche, and TapInfluence are stepping up. Instead of promoting influence scores, they connect businesses with content creators and help them develop and share the content that is more relevant to their audiences.  Are consumers fooled?

On a more personal scale, “like-for-like” schemes are constantly in play where enterprising individuals work together to bolster each other’s social profiles in order to appear more popular, relevant, and influential.

All this worked – for a while. Businesses earned a lot of free media and brand awareness;  individuals were elevated to social celebrity status. However, it didn’t take the general public long to figure out that cyber-shilling, gamified endorsements, and native advertising   were real, and in no time, the inherent trust we placed in our social communities was lost.

Millennials Trust Real People

The phrase “people trust people, not brand advertising” should be updated to state: “People trust real people and real friends,  not social media and/or brand advertising.” Nowhere is this more evident than among the Millennial generation, who for all their good intentions and social-do-goodness, are less trusting of what they read and see in social media.

An October 2014 Student Monitor survey queried college students about the the media through which they learn about products and services. The number one channel by which students preferred to receive product/service information was good old-fashioned word of mouth (48%). Interesting, “ads on the Internet” was second at 39%, well ahead of “information on the Internet” (21%) and “product reviews online” (18%).

Influence Marketing Social Media Trust Millenials

In fact, when asked specifically about what most influences their back-to-school purchase decisions, the vast majority of Millennials reported that “friend’s recommendation/one-to-one” was “very influential” (58.3%). Compare that to “friends’ recommendations via social media” which was said to be very influential by only 34.1% of respondents or “Pinterest or other visual social sharing channels,” which was said to be very influential by only 18.9%.

Level of Influence College Students Millennials

Social Media Has Killed Consumer Trust

Clearly, the pendulum has swung back to traditional word of mouth and away from “the wisdom of crowds.”

In June of 2013, I wrote that social media has led business astray. For all its promised benefits including faster, more effective access to larger communities, it has forced many marketers down a path that leads to lower business revenue. I speculated that the bigger online communities and our social circles grew, the less influential those communities would be regarding purchase decisions.

There’s no denying that consumers are embracing social networking in greater and greater numbers.  And, you cannot deny that social media is a phenomenon that has fundamentally changed the way humans communicate, learn, and live. Yet businesses and marketers may have killed the promise of riches for businesses embracing advocacy or influencer marketing strategies by their very own actions.

Sensei Debates

Is there no trust left in online recommendations and ratings?

Has social media killed consumer trust?

As always, we prefer to ask questions so please join the debate in the comments below.

Sam Fiorella
Feed Your Community, Not Your Ego

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18 comments
TonyBennett
TonyBennett 5pts

That's why so many people fail on instagram, IMO, because you're right. It's also why I think twitter is tuned out but I digress. Most IGers loathe salesy stuff... that's why they've abandoned the other platforms. Yet I still see marketers and social media "powerhouses" selling stuff or doing textgrams all day. You have to build trust with your audience there before touting your wares


On a separate note, I found out I am a millennial this year, but my whole life I thought I was Gen X. Talk about an identity crisis. 

berkson0
berkson0 5pts

Hey Sam,

As is often the case, the professionals are early adopters and learn to exploit new communication technology before the consumers catch on. There's a skill which I call "vetting" that is critical for 21st century consumers. I see the contrast in vetting ability when I look at my age group (old!) vs. my teenagers. They are less impacted by traditional marketing and put WAY more credence in their (admittedly smaller) social networks. 

Clever marketers always have an edge, but I think, as with most things, there's a fluency curve where the consumers catch up. 


-Alan

samfiorella
samfiorella moderator 5pts

@berkson0 And by "catch up" you mean their calling BS! :) Fair point.  

From personal experience, I can tell you my son, who was a Millennial, had a very large following on FB but rarely engaged there or wherever there was a ton of people. He preferred smaller groups, especially tech groups. Said he found more useful information and engagement there. Smaller communities is where the pendulum is swinging? 

Danny Brown
Danny Brown 5pts

@samfiorella @berkson0 That makes sense. I've thought for a while that micro-communities within communities is where the "gold" lies. Something I've been discovering as my content approach has morphed in the last 12-18 months. I can see a day, perhaps in the next year or so, where the gated content approach will be more widespread for bloggers, for example, and not limited to brands.

It may not even be premium content that's gated - more, "OK, here's my public stuff, but this little community over here is where we'll really dig in and get to know and support one another."

Mainstream content is disappearing - sure, it'll be there for eyeballs, but the real value is coming from micro.

berkson0
berkson0 5pts

@Danny Brown @samfiorella My kids use Instagram and text messaging (via a massive group chat), and to a lesser extent email to communicate with their peers. And they've been taught (indoctrinated, really) to fear groups of people they don't know and to carefully guard what they share outside a close group of people. 

Time will tell, but I expect these habits to be carried through into their more mature and business relationships. 

So, I agree, micro may be where the value is (and should be?). But the challenge is seeing outside your echo chamber and biases. 

Sam, I met you by sharing and looking for content outside my circle. Lot's of value but a hit-or-miss proposition. Filters will certainly be a challenge for the foreseeable future. 

Danny Brown
Danny Brown 5pts

Hey there Sam,

Great thoughts as usual, and some interesting takeaways. I have my own thoughts on how consumers are equally of guilty at ruining social media as marketers are said to be, but that's for another day.

One thing I would say is, looking at the two charts you share, while word-of-mouth is still #1 in both, it's not as big a deal as seems to be made out by these two reports.

In the first chart, as you point out, ads come in at #2 and #3 respectively, but the #2 doesn't share how the ratio of internet ads (PPC, SEM) compares to social ads (Sponsored Stories, Promoted Tweets). For all we know, the very stuff Millennials say they don't trust could be the stuff they're actually clicking on.

With regards chart two, I notice that #2 and #3 are coupons, with online coupons almost sharing the same percentage as one-to-one recos. So, "we won't trust your ads, but we sure as heck will take your stuff because it's cheaper".

Which kinda negates the #1 reason of influence... ;-)

Sure, crappy marketing and shills have ruined social's potential - but consumers are just as bad at propagating this, because they still take advantage of the very thing they rail against. And so the cycle continues...

samfiorella
samfiorella moderator 5pts

@Danny Brown Cool. As you know, the purpose of our posts here is to create debate/push the discussion forward. Love differing opinions.


 The fact that college students report Internet or TV ads as preferred sources of info (chart 1) does not have a bearing on the notion of trust.  True, ads on the Internet ranks up there at #2 but to me the bigger story is the distance between word of mouth and "information on the Internet" and "online reviews." In terms of trust, which this post is about, that's more telling.

 In fact, I think it supports my argument: I would interpret preferring ads to recommendations or general info on the net as them understanding they need to go find the info themselves instead of relying on the Internet's wisdom of crowds. When social media ads are more important to them than online recommendations - especially for crowdsoursing-happy Millennials - you know there's an issue with trust! 

Danny Brown
Danny Brown 5pts

@samfiorella To a degree, yes. But it begs the question again, how are ads being defined? Are advertorials posited as recommendations from trusted peers included? Disclosure comes down to the individual, unfortunately, and we both know from personal experience there are some crappy individuals out there posing as friends and trusted peers.

Not dispelling the notion that trust is eroded - I just find it hard to accept it as a key loss, when the same folks are happy enough to take free or discounted products and offers because a coupon is attached.

Let's say Friends A and B say, "Don't buy McDonalds, their products are pink slime", but Friend C buys anyway because they're running a two-for-one offer at Mickey D's that week. When morals go out the window for the sake of $5, it makes you question the validity of the information being given to the data collectors by the interviewees.

samfiorella
samfiorella moderator 5pts

@Danny Brown Hmm...sounds like "sitautional factors" intersecting "influence marketing" to me.  Someone should write a book about that. ;) 

samfiorella
samfiorella moderator 5pts

@Danny Brown Or is that a case of college students simply being broke? We know Raman noodles are full of MSG but we ate it by the case load in university cause it's all we could afford. 


JillKroppManty
JillKroppManty 5pts

@samfiorella @Danny Brown It would seem to me that if they're basing purchasing decisions on ads, that still means they're placing trust in those ads. I guess it depends whether ads give them a starting place for research, or whether they read an ad and make a purchasing decision based strictly on the ad.

samfiorella
samfiorella moderator 5pts

@JillKroppManty  FYI: The survey question was through which methods do you prefer to get information about products and services, which is different that how do you make purchase decisions. 

Liz
Liz 5pts

Sam - interesting premise but I interpret the findings a bit differently. Is it possible that overreliance on social channels and ignition has made marketers ignore the basic facts that it's not just sharing that leads to more of a return on investment BUT sharing by trusted colleagues and friends? To me, that's the takeaway. Hence, consumer trust is not diluted by rather, misinterpreted or misconstrued. 

Latest blog post: Safety first!

samfiorella
samfiorella moderator 5pts

@Liz There's no doubt that marketers, for the most part, have misunderstood that real influence is based on commentary by trusted individuals, not social celebrities, etc.@dannybrown and I explored this at great length in our book. There's a difference between the earned media (brand awareness) that is generated by social celebrity/talking heads and customer acquisition and customer lifetime value generated when trusted colleagues, in the right circles share relevant content. 

That said, isn't misinterpreted/misconstrued trust the same in the end?  Will it not eventually lead to a break in trust between consumers and the masses? Thoughts? 

Liz
Liz 5pts

@samfiorella @Liz @dannybrown What ultimately breaks trust is the failure to return on the investment, regardless of whether or not it's monetary or something else. True, when trust is broken, it is broken. But, does it lead to a break between the customers and the masses or in the case of millennials, a break between trusted friends and colleagues. If it's the latter, then the value proposition and ramifications are even greater, no?

Latest blog post: Safety first!

Trackbacks

  1. […] The phrase “people trust people, not brand advertising” should be updated to state: “People trust real people and real friends, not social media and/or brand advertising.” Nowhere is this more evident than among the Millennial generation, who for all their good intentions and social-do-goodness, are less trusting of what they read and see in social media.An October 2014 Student Monitor survey queried college students about the the media through which they learn about products and services. The number one channel by which students preferred to receive product/service information was good old-fashioned word of mouth (48%). Interesting, “ads on the Internet” was second at 39%, well ahead of “information on the Internet” (21%) and “product reviews online” (18%)….  […]

  2. […] Social Media Has Killed Consumer Trust. The public has figured out that cyber-shilling, gamified endorsements, and native advertising are real.  […]

  3. […] The phrase “people trust people, not brand advertising” should be updated to state: “People trust real people and real friends, not social media and/or brand advertising.” Nowhere is this more evident than among the Millennial generation, who for all their good intentions and social-do-goodness, are less trusting of what they read and see in social media. An October 2014 Student Monitor survey queried college students about the the media through which they learn about products and services. The number one channel by which students preferred to receive product/service information was good old-fashioned word of mouth (48%). Interesting, “ads on the Internet” was second at 39%, well ahead of “information on the Internet” (21%) and “product reviews online” (18%)….  […]

  4. […] Pre-social media, we called this phenomenon Bandwagonsim. As defined in the Oxford Dictionary of Psychology, the bandwagon effect is a phenomenon whereby the rate of uptake of beliefs, ideas, fads and trends increases the more that they have already been adopted by others.  Read more… […]

  5. […] What consumers do trust is other consumers. We trust reviews we find on websites like Yelp, recommendations from our friends that we see on Facebook, and advice from independent reviewers in communities like Tumblr. […]


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