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Social buzz isn't what it once was
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Steve Chiotakis: Word of mouth has long been one of the most effective ways for businesses to get their names out. These days, social media Web sites such as Facebook and Twitter are taking word of mouth to a new level. But as Marketplace's Jeff Tyler reports, a new study finds the "buzz" generated
in social circles isn't worth what it once was.
Jeff Tyler: If someone like you gave you information about a company, would you believe it?
Richard Edelman: Trust in a person like yourself actually plummeted this year.
That's Richard Edelman, CEO of the Edelman PR company. Two years ago, almost half of those surveyed said they trusted friends and peers as a source of information about companies. This year, it's down to 27 percent.
Why? Edelman says people may be once bitten, twice shy.
Edelman: Advice they got from their friends to invest in some of those companies was sort of a dud.
In terms of marketing, Edelman says that a single recommendation is no longer enough to sway jaded consumers.
Edelman: People have to hear something somewnere between three and five times, from different people and different places, in order to believe it now. Because we're in a time of skepticism.
Selective skepticism. The same survey showed an increase in our trust of CEOs.
In Los Angeles, I'm Jeff Tyler for Marketplace.
I’m not sure skepticism is more prevalent now. How would that hypothesis be tested? The dramatic drop in trust is probably partly a function of the very means used to get the word out. The easier it is to get the word and the more frequently words get out the less effective getting the word out is likely to be. After all, there is only so much any one person can keep up with before becoming overwhelmed.
“Social networking†techniques like the aptly named ‘Twitter’ are more about announcing one’s presence like a bird rather than communicating significant messages. The announcement or the act of communication is more important than what is communicated. As such they facilitate one’s sense of being part of a group or flock. That’s largely what’s going on with gossip and rumor. But by proliferating both “social networking†techniques undermine their effectiveness as marketing tools. One area where rumor may be valuable is in buying and selling stocks where one buys on the rumor and sells on the news. Maybe that explains part of the appeal of the Blackberry?
