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Very Early Stage Technology Investing

Reliability, trust and social media…

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Trust and reliability are not the same thing.  This thought occurred to me in a meeting at which consumer behavior on a media site was discussed.  Trust requires reliability, but it is more enduring, elastic, and subjective than reliability.  Brands are trusted.  Products are reliable.

If you don’t think there is a difference, consider two identical products that are equally reliable:  generic and name versions of the same drug.  There is simply no rational reason for someone to pay more for a drug of equal reliance.  Yet the brand affinity lingers somewhere in the value chain of patent-holder to doctor to patient.  Some patients will swear that they can tell a difference between equally efficacious versions of the same medication.

Brands are built to drive higher prices, and thus higher gross margins, even where noticeable differences are illusory in terms of reliability.  Brand builders must build associations for a product that extend beyond the utilitarian elements of problem/solution.  Traditional advertising builds brands, TV being the most obvious and historically important platform for building the brand image.

As marketers began to build behavioral databases of consumers in the ’80s and ’90s, they were able to identify more granular profiles that could be aligned with companies’ impressions of product brand imprints.  This was the purpose of all of those annoying check boxes about age and income and habits on warranty cards.  Granular understanding of consumer habits led to analytic systems that were able to target consumers directly with mailings or telemarketing.

Then came the Internet, direct mail opt out, do not call registry, and analytic parity among direct-mail marketing businesses.  Consumers retreated behind their doors, moved to cell phones, and began consuming media in ways outside traditional channels and methods.  Brand build and reinforcement is increasingly difficult.  Consumer activation through direct mail and telemarketing is fading fast.  And despite the concerns of privacy advocates, Web targeting efforts remain primitive compared to the glory days of direct mail.

Consumers of all ages are more selective, secretive, and elusive.  Media interaction – social and traditional – is a fragmented, continuous experience.  And social media, broadly cast, is becoming the lead channel.  It is a channel that we tune into, including email, social media, twitter, and SMS all day long.  It spans business and personal lives, work and family, parents and children.  This channel is evolving into the most trusted media channel of all, displacing the traditional channels that conveyed brand messages.  Brand companies are attenuated to social media for that reason.

Unfortunately for brand advocates, consumers are being conditioned to reliability first, trust second.  This evolution of the consumer is very difficult to imprint with brand associations that are enduring.  Enduring brand association creates brand loyalty, which is arguably the repeat purchase of high-priced alternatives for other than functional reasons.  The influential elements of social media carry a different currency of trust than a brand.

In fact, consumers of social media referrals value objectivity and innovation first.  Any hint of payola or favoritism undermines consumer trust.  Rather, they want a referral to a reliable product/experience, regardless of brand.  As such, reliability is the currency of trust that the product/movie/experience reviewer deals in.  Brand affinity may undermine the trust between a consumer and a social media source.  How that drives the future of brand marketing is unwinding before our eyes.

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Written by Mike Venerable

October 28, 2009 at 10:00 am

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