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Deloitte finds social ads most influential

Deloitte published its fifth annual report on Australian consumers’ media and digital preferences on Monday, revealing new insights into the impact of advertising on purchase decisions.

For the first time, digital ads, in the form of online reviews and recommendations, are more influential than TV ads. 58 per cent of all respondents reported that reviews and recommendations from someone within their social circle had a high or medium impact on their buying decisions, compared to 55 per cent who said the same for TV ads. The difference was much greater for Millennials: 75 per cent and 61 per cent, respectively.

Reviews are essentially the online version of word-of-mouth advertising, which is still the primary factor in shoppers’ purchase decisions. Other forms of digital advertising, such as social and search, have also gained influence since Deloitte first started measuring consumer preferences, while the impact of TV ads has fallen.

Deloitte researchers point to the rise of streaming and subscription video on demand services, which have made consumers, and Millennials in particular, less tolerant of ad breaks. At the same time, they say, companies have embraced the language and tone of social media, making their engagement with customers more authentic and effective.

Over 50 per cent of respondents said that companies’ use of social media has improved their view of those companies, and 48 per cent said that it positively impacts their decision to buy products or services.

Here are other key findings from the 2016 Deloitte Media Consumer Survey:

  • Trailing Millennials (aged 14-26) and Leading Millennials (aged 27-32) found social advertising the most influential form of all digital advertising, with 49 per cent and 43 per cent respectively, ranking it in their top three.
  • Matures (aged 69+) found search advertising the most influential form of all digital advertising with 53 per cent ranking sponsored search and 51 per cent ranking unsponsored search in their top three.
  • 40 per cent of all survey respondents ranked sponsored search results in their top three most influential forms of online ads, a 9 per cent decline since 2012.
  • 34 per cent of all survey respondents said ads delivered through social media channels have a high or medium influence on their buying decisions, a 17 per cent increase since 2012.
  • 59 per cent of all survey respondents said that social media enables them to be aware of products and services.
  • 46 per cent of Australia’s $6 billion digital advertising market is spent on search advertising.
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