Much to the chagrin of retailers, a marketing services consultancy revealed a report last month that states consumer trust is at an all-time low.
"The trust is at the floor. We continue to see unimaginable things happening, such as the surreal attacks of 9/11, the unimaginable betrayal of Catholic priests and molestation scandals, the corporate betrayals of Enron and the like, Martha Stewart's insider trading and Sammy Sosa's corked bat. Everywhere we look we see deceit, mistrust and dishonor. It's so pervasive," says Craig Wood, president of the MONITOR division of Yankelovich Partners in Chapel Hill North Carolina and author of the study, called The State of Consumer Trust Report.
Wood fears that the aforementioned list of malfeasance has negatively affected consumer sentiment toward big business, particularly retailers. To make matters worse, the overwhelming amount of consumer marketing campaigns compounds the problem, he says. Consumers are inundated with marketing material on television, radio, magazines, newspapers, the Web, the telephone, in their mail and e-mail accounts, and in the street. Yet, of the 2,500 U.S. respondents in the study, an overwhelming 86 percent feel retail businesses do not use personal information to send advertisements or marketing materials that are relevant to their wants or needs. This is weighing heavily on consumers' views of marketing and advertising. According to Wood, 60 percent of respondents say their opinion of marketing and advertising is worse than it was a few years ago. It's gotten so bad that 45 percent say that marketing and advertising detracts from the experiences of everyday life and 69 percent stated they are interested in products that either bypasses or blocks marketing and advertising campaigns such as TiVo for television commercials and TeleZapper for unwanted telemarketing calls.
"Yet we continue to bombard people with 30-second ads on TV and radio. We are saturating the market with advertising because we're meeting resistance and the traditional marketer's approach to that is more marketing, but the result is that consumers stop spending. So spending on marketing has gone up but close rates have gone down," Wood says.
To improve marketing productivity, Wood suggests that marketers combine precision with relevance, making fewer, yet targeted, marketing and advertising campaigns that emotionally resonate with consumers. He adds that marketers should empower their customers - the only way to get control of the relationship is to give up control of the relationship, he says. "More of our trend data shows that people want to be put in control of the data. That's why you see the rise of TiVo and iPod. It's amazing to me that people can listen to a record in any way they want, not in an order the artist intended. That's the kind of control people are looking for."
Ebay is a good example of empowering consumers, he states, because it provides a rating system for buyers on the business integrity of the sellers, which builds trust and comfort levels before making the purchase.
The final piece, he concludes, is reciprocity. "More people want to be rewarded for their interaction with you, maybe by giving them information, entertainment, more value or more time."
Mastercard and Citibank do this well, he maintains. Mastercard's "priceless" campaign, featuring ads that play up the value of building relationships with family members and Citibank's "live richly" campaign have warmed consumers. "These campaigns were wildly successful," Wood says, namely because of the focus on the intangibles, the things that money can't buy.
The bottom line is that customers are changing their buying behaviors. "People are rooted less in quantity, tangibles and money and rooted more in quality, intangibles and time," says J. Walker Smith, president of Yankelovich Partners. "So life is not about more and more stuff. That is what life has been about over the last 20 to 30 years. Baby Boomers are now in their late 40s and 50s and they are thinking more about nonmaterial things, they bought all the stuff they need. Even generations behind Boomers are not as materialistic. Families are a lot more important to 30-year-olds than when Baby Boomers were 30. The height of the rise of divorce occurred when Boomers were in their 30s and 40s, today's 30-year-olds have lived through the worst of those family experiences and want to create something different."
For a full copy of the report, visit the
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