Thai consumers trust who?
Earned media, such as word-of-mouth and recommendations from friends and family, is the most trusted form of advertising for Thai consumers, while advertisements placed in traditional media are taken with a pinch of salt, according to a new study from Nie
Nielsen’s Trust in Advertising Survey indicates that the most trusted forms of advertising in Thailand are a mixture of "earned media" and "owned media". Recommendations from friends and family is a clear leader in terms of perceived trustworthiness (86 per cent), followed by messages on companies’ official websites (63 per cent), and consumers' opinions posted online (60 per cent). However, when comparing consumers' sentiments towards advertisements in 2009, the study shows a significant decline in terms of trust across both traditional and online Media.
“The decline in Thai consumers' trust in advertising is not necessarily a bad sign,” commented Suresh Ramalingam, managing director of Nielsen Thailand. "It simply sends a signal that the Thai market has developed and grown more mature over the years. Consumers in developed markets tend to be more cautious and are no longer easily convinced by a single source of information.”
Despite a 20 per cent decline consumers’ level of confidence in paid advertising on television compared to 2009, more than half of Thais (53 per cent) still trust the ads. A similar trend is also observed in other forms of traditional media. Four out of ten Thai consumers believe in advertisement in newspapers (47 per cent), magazines (46 per cent), and radios (40 per cent), but all have suffered big confidence declines compared to 2009 by 23 percent, 24 percent, and 17 percent respectively.
Online Media does not fare much better than the old giant does: 60 per cent of Thai consumers, the same percentage as 2009, still trust online consumer reviews, but advertisements viewed in search engine results experience a 20 per cent confidence decline from 60 per cent to 50 per cent in a span of three years. Advertisements on social networking sites are convincing to four out of ten consumers while only 30 percent said they find advertisement banners on websites trustworthy. Moreover, companies’ official websites, the second most trusted form of advertising according to the study, also suffer an 11 percent decline in terms of trust compared to 2009.
A decline in trust, however, has not affected advertising spending, which increased significantly in the first quarter of 2012. The majority of advertising dollars continue to be spent on television, which posted an impressive 25 percent increase to Bt15.9 billion compared to the fourth quarter in 2011, followed by print media at Bt6 billion, and radio at Bt1.5 billion. Advertising spend in Online Media also reported a 20 per cent boost from the fourth quarter, clocking in at Bt137 million in the first quarter of 2012.
"Despite the decline in how much consumers trust online advertising, social media is still one of the most effective channels to get consumers talking and sharing opinions. Many companies are already increasing their paid advertising activity on social networking sites, in part due to the high level of trust consumers place in friends’ recommendations and online opinions. Brands should be watching this emerging ad channel closely as it continues to grow,” commented Suresh.
Nielsen’s survey also found an increase in consumer fragmentation in terms of media preferences. Although six out of ten indicate that they relate better to the advertisements shown on television than in other forms of media, the runner-ups, ranging from trendy online advertisements to traditional old-school newspaper ads or radio spots, are lumped together between a 40 to 50 per cent range with no notable differences.
"The high cost of advertising in today’s fragmented media world forces marketers to strive for the most effective and efficient ads to boost advertising ROI,” commented Suresh. “A decline in trust in advertising and an increasing fragmentation clearly will make it more difficult for advertisers and manufacturers alike to decide where their advertising dollars should be spent. However, Nielsen’s survey shows that there is a great potential for marketers who can tailor their marketing mix to reach the right audience through the right means with the right message, which, ultimately, will result in a coveted ability of paying the right price for the right return.”
According to Nielsen's “Surviving the Media Spending War” report, media in Thailand has grown increasingly fragmented in the past five years. While the trend is clearly observed in all types of media, magazines are the most fragmented traditional media with 232 brand offerings in 2011. The staggering fact is that despite its 20 percent increase in the number of publications from 2006, 29 percent of these brands also died during the same period of time.
