People Trust People More than Brands (Part 1)

General Electric Company's 69th Annual Meeting in 1961

People Trust People More than Brands (Part 1)

It should come as no surprise that we trust friends, family and peers more than we trust companies.

The same goes with our traditional advertising—according to the USA Today and numerous other studies—about nine out of ten people think advertising is a lie. Not just a flexing of the truth—but outright untruth.

Not only do people flee advertising, but those ads that they do see, they view skeptically. Or, as Forrester Research claims, advertising today has “zero effect” on persuading consumers.

The erosion of people’s trust and confidence in marketing is reflective of our society as a whole.

Step back. In the 1960s, people trusted the government, institutions and the brands they watched on nightly TV. The U.S. economy was expanding and was poised to expand some more. Nearly all working Americans were experiencing some form of increase in their standard of living.

But circa 1970s Vietnam and Watergate, collective trust in both public institutions and private enterprise began to erode. As Dylan had already declared, “Even the President must sometimes stand naked.”

The transparency was occluded during the Reagan Era, when, according to Pew Research, “Confidence in government recovered in the mid-1980s before falling again in the mid-1990s.”

Public trust reached its three-decade high shortly after the 9/11 terrorist attacks, but sank again thereafter.

This graph shows the lack of trust in the government since 1958.

Trust in brands has run a parallel track with societal high and lows. In the 1970s, consumerist Ralph Nader highlighted the faults of the Detroit auto industry, the largest in the world.

Consumers started to question brands in earnest. The first Earth Day was in 1970. The Watergate coverup was in 1973. In 1982, Johnson and Johnson recalled it’s Tylenol product due to tampering. Then came Arthur Andersen, Audi, VW, 'natural' foods, etc, etc. Soon after, consumer protection became a “thing.”

No surprise, trust in brands in the U.S. today remains below 40%.

This graph shows the percentage of people that trust brands by country...

However, the positive truth is that people (over ninety percent of them) believe their friends, friends of friends, peers and family members. Word of mouth —whether tucked into reviews, thumbs up emojis, smiley faces or starred ratings, has never been more valued. People like other people and they like to hear what other people have to say.

Here’s a survey showing that people trust their friends and ‘influencers” more than brands.

Humanity in its rawest form favors trust and cooperation—the two foundations of community building and the essence of creating markets. Trust, cooperation—and a third factor—belief, are the tent poles that stand by any meaningful brand.

When these three factors exist, we can expect to attract people—and others like them toward a thriving market. When they don’t, we don’t.

Click here to download the report
Joseph Perello

Joe is the founder and CEO of Props. Previously, he was the first CMO of the City of New York in the Bloomberg Administration, and was recognized by Harvard Business School as the most innovative initiative of any city. Joe founded and bootstrapped an award-winning digital ad agency. He was VP for the New York Yankees, working directly for the late George M. Steinbrenner III, and helped the team break attendance and revenue records. He was an executive with David Bowie’s internet start-up UltraStar and started his career as a direct marketer with credit card pioneer MBNA America. He’s on the board of New York Cruise Lines and Princeton Academy. Joe earned his undergraduate degree in History and Journalism from the the University of Delaware.

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