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There is a Viral Going Around That Marketers Will Want to Catch

Compete Study Reveals Consumer Generated Media Causes Buyers to Change Their Purchase

Boston – December 13, 2006 – Compete, Inc. today announced findings from its latest Spark! “Embracing Consumer Buzz Creates Measurement Challenges for Marketers.” The findings reveal that nearly one quarter of automotive and travel buyers surveyed changed their mind about their reservation or purchasing due to consumer generated media (CGM).  The study illustrates a new marketing paradigm in which the opinion of other consumers is an influential source on consumers’ buying decisions, beginning to drown out the voices emanating from brands and Madison Avenue.  To download the study in its entirety, go to http://www.competeinc.com/research/spark/

To isolate the effect of CGM, Compete surveyed automotive and travel buyers who had made a purchase within the past six months and who had visited a blog, review site, message board or online community during the past 60 days.  According to the study, 51% of auto and travel buyers turn to consumer generated media to narrow their purchasing decision, nearly one quarter say that consumer review sites influence their purchase decision; and 24% change their mind about the type of vehicle/travel reservation they end up purchasing as a result of CGM influence.  Additionally, consumers influenced by CGM have a major viral effect on other buyers, with 68% influencing friends and family post-purchase and magnifying the overall impact. 

Other key findings from the study include:

  • 71% of auto and travel buyers influenced by CGM say that CGM is credible. Only 35% of these consumers find brands credible.
  • About one third (35%) of auto buyers say that consumer reviews and ratings sites influence their decision, more than company websites (32%) and car dealers (32%). One in five says that advice from other consumers online is an influence.
  • Two thirds of travelers say CGM impacted their purchase decision.  At an average of $500 per booking, Compete estimates there is more than $2 billion in travel impacted by CGM each year. 

Clearly, as consumers have become increasingly involved in brand conversations, measuring the impact from CGM has become more complex and more important in building customer loyalty, and creating brand advocates.  Accordingly, brands and marketers must begin measuring new marketing approaches that fuse elements of social computing with selling and improve their visibility within CGM.

“CGM is money in the bank for marketers who know how to tap into the new currency around CGM,” said Cynthia Stephens, director of marketing at Compete, Inc.  “Marketers will need to go beyond buzz-tracking tools to analyze and connect with in-market consumers in a new landscape.  Companies that follow this course have nothing to fear about losing control of the marketing message.”

According to Compete, the first step in determining the influence of CGM is to quantify the impact of CGM on an individual buying decision.  Here’s how to begin:

  • Analyze In-market Consumers: Simply monitoring digital mentions isn’t enough.  Analyze in-market consumers who are close to the point of purchase to better understand how CGM fits into their lives and the role it plays.
  • Behavioral and Qualitative: Implement both behavioral and qualitative monitoring programs.  Examine in-market consumer behavior online and conduct a behaviorally targeted survey of connected, in-market consumers to understand the impact CGM has on product preferences and motivations.
  • Measurement: Quantify how many in-market consumers changed their minds about the products they purchased, as a result of CGM.  Measure CGM-influenced buyers’ engagement with your brand online.

About Compete, Inc.
Compete, Inc. is the only online market research firm that creates value for both consumers and marketers. Compete’s research is powered by millions of people who share their online behavior to create a more trusted, transparent, and valuable Internet. Consumers use Compete to stay safe when they surf, save when they buy, and discover the best new websites. Leading companies turn to Compete to understand how these consumers consider, buy and engage with their own and rival brands. Carlson Hotels Worldwide, Esurance, Hyundai Motor America, Upromise, DaimlerChrysler, Verizon Wireless and other innovative companies rely on Compete’s real-time insights to improve the return on their marketing investments.

Compete is headquartered in Boston, Massachusetts, with offices throughout the US. For more information, please visit http://www.competeinc.com.