Reviews and recommendations by consumers on social networks are now ahead of TV in influencing purchase decisions Deloitte’s latest media consumption survey has found.The report revealed that for the first time the growing impact of social media was having a direct effect on how shoppers made decisions, with TV slipping just behind social media.
And it confirmed the continued reluctance of consumers to pay for digital news, with one-in-five relying on social media as their main news source.
Word of mouth remained the most influential channel for brands to get their message across but the report’s co-author, Niki Alcorn, said that the influence of social media has now reached a tipping point.
“More respondents (58%) have ranked ‘reviews from people within their social media circles’ in their top three influencers for buying decisions than television adverts (55% of respondents),” Alcorn said.
“This is the first time this has happened – and notably the influence of advertising on purchase decisions has fallen for the first time in four years. Adverts on social media are also influencing us more than ever, with a 17% CAGR increase over the last four years in people’s perceptions of them having a high or medium influence on their purchasing decisions.”
Television still remains the first choice for viewing, but the use of streaming video on demand continues to grow exponentially as services such as Netflix, Stan, Presto and others push into the market.
The report said that more people were willing to pay to curate their content in their own time and sidestep advertising.
Deloitte’s financial advisory leader Claire Harding said it was clear that SVOD had reached a level of general acceptance with the number of people paying for services almost doubling to 22%
“It’s still early days for SVOD in Australia, with respondents experimenting with what these subscriptions have to offer,” Harding said.
“In order to access their desired content, 18% of SVOD subscribers have more than one service, with two-thirds of multi-subscribers expecting to maintain two or more services in the future,” said Harding.
People not only want the freedom to choose the content they watch, they are willing to pay for it to enjoy an advert free viewing experience. Almost half of us (48%) would pay to watch movies in exchange for not being exposed to adverts, whilst 43% would pay for TV shows to avoid them,” said Harding.
“When it comes to streaming services, respondents’ willingness to view adverts is diminishing (50% in 2016 down from 58% in 2015), even if it significantly reduced the cost of the subscription. And in the digital domain, ad blockers are giving consumers the power to shut out ‘interruptions,’ with 28% of respondents now using ad blocking software.”
Deloitte telecommunications, media and technology leader, Stuart Johnston said that there were worrying signs for traditional news services as the habit of millennials to rely on social media for news started to bleed into older generations.
“29% of millennials use social media as their primary source of news, compared with only 12% of other respondents,” Johnston said.
“But we’re now seeing this trend play out among other generations, with 20% of Gen Xers using social as their primary news source this year, compared with just 6% in 2015.”