Despite all the attention given to social networks, the medium doesn't appear to be driving consumer purchases yet. According to a survey of consumers by Mintel, only five percent bought something based on the recommendation of a blogger or a chat room. Leading was the referral from a friend or relative (34 percent) or spouse/partner (25 percent).
"People aren't going online to get a recommendation from a blogger or a social network," Chris Haack, senior analyst at Mintel, told MediaPost's Marketing Daily. "It's probably a bit of a trust issue. You can't have the same level of intimacy online as you can in person."
The study found that young adults who are more likely to use social networks are not surprisingly more likely to use the internet for advice and referrals. It also found that Asian and Hispanic consumers - also more active in social networks - were more influenced by bloggers to purchase a product or service, at 14 percent and 10 percent, respectively. But personal recommendations still held more influence across demographics by a wide margin.
"The sheer number of people that purchase based on recommendations proves marketers need to pay attention to word of mouth," Mr. Haack said in a statement. "It's becoming easier for businesses to lose control of their marketing messages, so companies need to carefully monitor and respond to consumer conversations about their brands."
Despite the power of person-to-person recommendations, Mr. Haack told Marketing Daily that the internet's social tools shouldn't be ignored. The most active people in the social networks tend to also be the "influentials," who are more likely to recommend products and services, Mr. Haack noted.
"It's definitely worth reaching out to them," he said. "For the first time in history, marketers can have a real-time tracking of their dialogue with consumers. It would be [foolish] not to take advantage of it."
Discussion Question: Given the trust issues, are marketers overestimating the potential of consumer blogs and social media to drive purchases and build brands? What can retailers do to drive more offline WOM?