The Power of Word-of-Mouth
Even with the heaps of money that American firms spend on TV ads, print ads and such each year (in 2010 American firms spent more than $94 billion in 3 quarters! See the article here http://www.good.is/post/transparency-which-companies-spent-the-most-on-advertising-last-year/), nothing beats word of mouth advertising.
People are becoming savvier consumers and are tightening their wallets in the midst of the financial uncertainty. Do such forms of traditional advertising really convince a substantial number to go out and purchase their product? These days, we are so constantly bombarded by the ads we see each day that we tend to tune them out. How many advertisements do we actually take note of?
Recently I’ve been shopping around for a new laptop. I was seriously considering a particular brand but a close friend of mine, who owned one previously, strongly recommended against it. This brand was instantly crossed off the list for me. Any previous advertisement I had seen, the beautiful design of their stores and just the product itself made no difference at all when a trusted friend had so much harsh criticism for them.
On the other end, nearly a dozen friends recommended Apple laptops. They were not just Apple advocates – they were Apple fanatics! Listening to them, one can tell Apple has really worked hard to build their customer equity. I was quite easily swayed to purchase one.
And that’s not just me. In a survey with over 25,000 respondents, 90% stated that they had some degree of trust in recommendations from people known. That’s 28% more than TV advertisements!
http://www.designinc.co.uk/design-blog/advertising-and-consumer-trust/
In short, yes, raising awareness of your product is vital, but even more so is to deliver value, not just in flashy advertisements or fancy packaging but in the product itself and in delivering customer service. Satisfied customers go a long way in bringing more satisfied customers.
Upper year marketing classes have discussions addressing your very question- does advertising actually make you go out and buy the stuff? When it comes down to it, I think a large component of it is the mere exposure. Really interesting articles you refer to, great commentary!