If you use advertising to get out the word about your business, you've got some complex and important decisions to make -- particularly when it comes to deciding where to place your advertisements. Should you stick with the traditional paid media (television, magazine and newspaper ads), or jump on the earned media (word-of-mouth and recommendations from friends and family) bandwagon? Or maybe a combination of both? Before you decide, you should know something about current trends affecting the effectiveness of each of these approaches.
The Nielsen Company (yes, the same folks who have been producing television show ratings since the 1950s) recently completed a comprehensive look at the relative effectiveness of each of these approaches, and the trend is clear: paid media is losing the battle for the hearts and minds of consumers worldwide, while earned media is making significant gains.
Nielsen’s 2012 Global Trust in Advertising Survey of more than 28,000 Internet respondents in 56 countries shows that while nearly half of consumers around the world say they trust television (47%), magazine (47%) and newspaper ads (46%), confidence declined by 24 percent, 20 percent and 25 percent, respectively, between 2009 and 2011. However, according to Nielsen, 92 percent of consumers around the world say they trust earned media, such as word-of-mouth or recommendations from friends and family, above all other forms of advertising—an increase of 18 percent since 2007. Online consumer reviews are the second most trusted source of brand information and messaging, with 70 percent of global consumers surveyed online indicating they trust messages on this platform, an increase of 15 percent in four years. There is a ton of useful data available in the Nielsen report, and if you spend any significant amount on advertising, it's worth a look.
In the meantime, here's a great graph from the Nielsen report that answers the question "To what extent do you trust the following forms of advertising?"