Consumers Know Best Research Presentation

1Proprietary and Confidential. ©2011 All Rights Reserved.

What Consumers’ Information

Needs Mean for Brand

Engagement

CONSUMERS KNOW BEST

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The changing role of older media and the emergence of newer

ones extend the marketer’s role well beyond the allocation of

budgets and channels.

Marketers today require a deep understanding of how

consumers engage with different types of media at each stage

of the journey toward a purchase decision. What’s more, these

different kinds of media are related and interact with one

another, so marketing plans and capabilities must adapt and

evolve.

The Changing Media Landscape

David Edelman and Brian Salsberg,McKinsey Quarterly, 2010

As the media landscape has become more complex, so, in turn, has effective brand

strategy. And the cost of getting it wrong is higher too – consumer feedback now has

more reach and greater weight than ever. Yahoo! undertook this research to understand

what consumers do on the path to purchase, and what this means for brands.

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Quantitative

Quantitative survey of online Canadians to

delve into the key themes arising from the

qualitative sessions, and understand key

audience segments.

Demographically nationally representative

sample of 2000 respondents.

January-February 2011

The ResearchQualitative

Week-long qualitative online discussion

board about attitudes and behaviours

around brands, purchasing, and social tools.

In-depth ethnographic interviews with

select participants.

November 2010

NB: Blind study (participants not aware of Yahoo!’s involvement)

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Savvy Shoppers Are in the Know

Like never before, consumers connect with multiple

trusted sources in search of product and pricing

information, and guidance and reassurance from

friends and experts.

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Consumers Do Their Homework

68%of consumers have looked for more

information about a brand or product

after seeing an ad

58%conduct research before

buying something

40%say it’s stressful trying to

find the right product or

brand

These figures are for purchases across all categories: CPG to finance,

technology to travel, and autos to retail. In more involved purchases, we might

expect the proportion conducting research to be even higher.

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They Seek Knowledge and Assurance

60%What does the item

DO or comprise?

42%Manufacturer info

about the product

What the product

looks like41%

65% How does it compare

to the alternatives?

50%Comparisons with

alternatives

Expert reviews46%

79% Is it right for ME?61%

Problems users

have had

Reviews from users58%

80% Where can I buy it

most cheaply?

72% Price comparisons

Where to buy55%

PRODUCT

INFORMATION

EXPERT

VIEWS

CONSUMER

EXPERIENCES

BUYING

INFORMATION

The information that consumers seek on the path to purchase breaks down into

four broad themes.

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84%

73%

67%

44%

8%

54%

19%

12%

4%

3%

Internet

Talking to friends, family via any means

Going to a store

Magazines, newspapers or books

Some other sourceUse for information

Turn to first for information

Internet, Friends and Retail Stores Are

Key Information Sources


Paid, owned and earned media are distinct and

complementary in consumers’ eyes. Each

channel fulfills different information needs, and all

are imperative along the consumer’s path to

purchase.

Paid, Owned and Earned Media

Are Distinct and Complementary

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Paid, Owned and Earned Defined

PAIDAdvertising

Broadcast

Print

Online Display Formats

Search Marketing

Promotions

EARNEDTalking to Friends

Consumer Reviews

Online Consumer

Discussions & Forums

Expert Views & Reviews

Editorial Coverage

OWNEDBrand Website

Brand Social Outreach

Facebook Page

Twitter Feed

Official Blog

Paid media is straightforward, but it’s worth noting that consumers see brands’ social

outreach as owned, not earned, space. Earned media is also well-understood as being

‘everything else’, encompassing consumer and expert sources.

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FIRST AWARENESS

Steps on the Path to Purchase

DISCOVERY

INFORMATION

RECOMMENDATIONS MORE INFORMATIONABOUT THE BRAND/ PRODUCT

CONFIDENCEPRODUCT IS RIGHT FOR ME

TRUSTWORTHY

RECOMMENDATIONS COMPARE PRODUCTS

There are many different interpretations of the path to purchase, but respondents

identified five steps that they go through before making a purchase decision.

Consumer Needs

Product Information

Expert Views

Consumer Experiences

Buying Information

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DISCOVERY

INFORMATION

RECOMMENDATIONS


TRUSTWORTHY


Early on, it’s about discovery, and the research shows that consumers still see advertising

as their main source for this. They expect it, they’re attuned to it, and they like being

shown the product in the best possible light – as only advertising can.

Advertising Is the Primary Channel for

Product DiscoveryPAID

MORE INFORMATIONABOUT THE BRAND/ PRODUCT

Advertising 38%

Sales Assistant 41%

Brand Website 45%

Subject-specific forums 37%

FIRST AWARENESSAdvertising 43%

Store Promotion 36%

Mention on TV 38%

Mention in Print 35%

Consumer Needs

Product Information

Expert Views


Buying Information

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DISCOVERY

INFORMATION

RECOMMENDATIONS


TRUSTWORTHY


Owned media are also key – the brand’s official website is the number one destination for

consumers seeking more information about a product or brand they’ve seen advertised.

While a brand’s social outreach is also owned media, consumers didn’t identify it as

important in the path to purchase.


Mention on TV 38%

Store Promotion 36%



Brand Website 45%

Sales Assistant 41%

Advertising 38%


A Brand’s Website Is the #1 Source for

More InformationOWNED

Consumer Needs

Product Information

Expert Views


Buying Information

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DISCOVERY

INFORMATION

RECOMMENDATIONS


TRUSTWORTHY

RECOMMENDATIONS

COMPARE PRODUCTS

Editorial sources are important in product discovery; for example, Oprah talking about a

new product, or a travel website recommending a particular resort. Later, experts provide

the impartial knowledge and guidance that’s crucial for comparing alternatives and

building confidence in a particular purchase choice.

FIRST AWARENESSMention on TV 38%


Advertising 43%

Store Promotion 36%


Sales Assistant 41%

Brand Website 45%

Advertising 38%


Expert Sources Provide Independent

Guidance at All StagesEARNED

Price comparison sites 45%

Consumer reviews 41%

Expert Reviews 39%

Sales Assistant 33%

Expert Reviews 32%

Sales Assistant 21%

Talking to friends 42%


Expert Reviews 24%

Sales Assistant 18%


Consumer reviews 21%Consumer Needs

Product Information

Expert Views


Buying Information

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Consumer Needs

Product Information

Expert Views


Buying Information

DISCOVERY

INFORMATION

RECOMMENDATIONS


TRUSTWORTHY

RECOMMENDATIONS

COMPARE PRODUCTS

Consumer-to-consumer sources are also vital in building confidence. Consumers see

talking to friends and aggregated reviews online as complementary, providing personal

feedback and a breadth of experience from ‘people like me’.


Mention on TV 38%

Store Promotion 36%



Sales Assistant 41%

Brand Website 45%

Advertising 38%


Consumer Reviews and Talking to

Friends Instil Trust and ConfidenceEARNED



Expert Reviews 39%

Sales Assistant 33%



Expert Reviews 32%

Sales Assistant 21%



Expert Reviews 24%

Sales Assistant 18%

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Consumer Needs

Product Information

Expert Views


Buying Information

DISCOVERY

INFORMATION

RECOMMENDATIONS


TRUSTWORTHY

RECOMMENDATIONS

COMPARE PRODUCTS

Bringing the paid, owned and earned sources together, we can see why all are important

in a comprehensive brand strategy: consumers use them at different times and for

different reasons on the path to purchase.

FIRST AWARENESS


Connecting the Journey: Paid, Owned

and Earned



EARNEDOWNEDPAID

Expert Reviews 39%

Sales Assistant 33%

Advertising 43%

Mention on TV 38%

Store Promotion 36%


Brand Website 45%

Sales Assistant 41%

Advertising 38%



Expert Reviews 32%


Sales Assistant 21%


Expert Reviews 24%


Sales Assistant 18%

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Understanding the Differences Within

Paid, Owned and Earned Media

There are important nuances within paid, owned

and earned media – and smart brands harness

these distinctions to know where, and where not,

to engage with consumers.

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INFORMATIVE40%

Brand Website

26%Brand’s social profile or Blog

OWNED

A Brand’s Website Is More Informative

Than Its Social Media Profile

“I went to the Facebook page of one of my favourite brands. While it may

have been interesting to see some vintage product photos or see ads about

upcoming products...it would definitely not be part of my purchase path. I

actually prefer their corporate website, which is nicely laid out, and easier to

access and navigate.”

A brand’s official website plays an important role for consumers that is not replicated by

its blog, Twitter feed or social networking profile. 42% trust a brand’s website more than

its Facebook page, and a brand’s website is regarded as the most informative media

channel.

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“I'm more inclined to see reviews completed by established publications

or specialists as being "reliable" than the opinion of someone who rates

a product online, simply because they [consumers] have the ability to

freely express their opinion without any real expertise or knowledge.”

Expert Sources Are Irreplaceable for

Credibility and ConfidenceEARNED

Expert reviews are the #1 source for being well-informed

…and the second most trustworthy source, after talking to friends

Expert sources are unlike any other for consumers, due to being independent but well-

informed. They include store assistants, expert reviews and articles and editorial

mentions on TV, in print or on respected websites.

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Not All Consumer Sources Are Created

Equal

PROVIDES TRUSTWORTHY RECOMMENDATIONS

42% Conversations with friends about a brand

31% Consumer reviews

EARNED

18% Subject-specific forums

15% Reading discussions on social networking sites

Friends’ opinions and consumer reviews are also used extensively on the path to

purchase, discussions on forums and social networks less so. To some extent this is due

to consumers’ perceptions of convenience and the relevance of the information available.

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PAID

Advertising Is Most Engaging in

Premium and Respected Environments

Informative

Well-informed

Trustworthy

Helpful

Ads on Yahoo!, MSN

or Globeandmail.com

are regarded as more

...than ads on social

networking sites

“If it's a trusted site, the advertising becomes more effective

because I will be more inclined to pay attention to the ad and to

invest the time into finding out more.”

As with expert reviews, advertising’s value stems in part from the authority and

appropriateness of the channel on which it appears. Respondents consistently stated that

they feel ads on premium content sites are more relevant than those on social sites.

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The Implications for Brands: Integrated

Planning

EARNED• Proactively seek a

presence in expert

reviews and articles

• Encourage loyal

customers to share their

experiences

• Be an active listener and

respond if and when

appropriate

OWNED• Feature an official brand

site that delivers on

consumers’ information

needs

• Establish a brand

presence on social

platforms for customers

who want to interact and

engage with the brand or

each other

PAID• Engaging and

informative ad campaign

• Consistent messages

across respected online

and offline channels

• Directing consumers to

the brand Website

To remain relevant all along the path to purchase, brands’ strategies must encompass

ALL of these channels. Particularly in earned media, where brand involvement is difficult,

understanding consumers’ behaviours and needs is key.


For more information about the research and its implications

for brands, or to find out how Yahoo! can help, please contact

your Yahoo! rep or call 1-888-924-6620.

Consumers are more discerning than ever before in how

they use multiple sources of information on the path to

purchase, and brands must understand what they want, and

where they want it, in order to stay relevant and engaging

along this path.

Consumers Know Best

Consumers Know Best Research Presentation

Business

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