While the experts argue over the math, I think that UK (and US) advertisers and consumers should celebrate this milestone. While the US Internet-TV ad spending gap is still sizable, the steady migration of dollars over the coming years will drive Internet industry growth and evolution, yes, but also a more customer-centric experience for consumers faced with hard decisions in an increasingly complex economic and marketing environment. Advertiser spending on social marketing/commerce applications is still significantly smaller than the leading categories of Internet ad spending mentioned above. However, as we have witnessed firsthand over the last 4+ years of building Bazaarvoice (and shared on many occasions on Bazaarblog), the social category offers perhaps the greatest opportunity for advertisers to think bigger than clickthroughs and conversion rates and instead focus on wholesale cultural and operational transformation of their businesses using the voice of the customer as a muse.

This news from the UK is timely, as we just wrapped up our second annual Social Commerce Summit in London, the European complement to our US Social Commerce Summit held in Austin every year. We now serve over 120+ customers across Europe, and the London Summit was a sold out event. In the coming days, we will share highlights from the Summit here on Bazaarblog!

Letting customers rate products on e-commerce sites is the top Web 2.0 spending priority, according to online retailers in the US surveyed in August 2008 by Vovici for Internet Retailer. Well over one-half (57%) of online pure plays said customer ratings and reviews were a priority for them.

Internet Retailer said online merchants wanted these features because they drove sales. It also noted that PetsUnited, which operates 10 e-commerce sites, reported a 50% jump in average sales when shoppers ordered right after viewing a video, compared with after viewing just text and pictures.

"Shoppers that view videos and read customer ratings and reviews spend more," said Corbin de Rubertis, president of retail widget developer Qponix, in the Internet Retailer article. "Even in a weaker economy, retailers are going to spend money on better technology if it drives traffic and converts sales."

Emarketer also recites a study we launched with Vizu highlighting the importance of reviews to retailers:

Last year I wrote this article highlighting why ratings and reviews are the highest NPV marketing investment, and why they should get launched before the holidays. Coincidentally I wrote it one year ago yesterday, and it's still as relevant. You've got a few months left. Now is the time to move!

The first was a banner ad from The Home Depot, which promoted two eco-friendly products, encouraging shoppers to "Go Green & Save." 

The second was a catalog from Design Within Reach, which cleverly asked "What is Green?" on its cover and featured, again, eco-friendly products, many manufactured from reclaimed materials. 

The last was a direct mail piece from The Container Store, which featured green products from Umbra, a brand I really like.  

As an eco-conscious consumer, I appreciate any company's genuine efforts to go green.  Ideally, this transformation should start with the company's selection of materials, suppliers, and manufacturing processes, so I'm a bit skeptical when I see green marketing without having any knowledge of the company's environmental track record.  Green marketing elicits a Pavlovian response from many consumers, so the lure of easy money makes me wary of "greenwashing" campaigns.  And I'm not alone.  Just Google "greenwashing" and take your pick of websites dedicated to blowing the whistle on companies that stretch the truth on their environmental resumes.

As a professional working within the word of mouth marketing industry, it struck me that green marketing represents a rare, macro-level opportunity for rapidly building or destroying credibility with a very large number of consumers.  I'm creating terminology on the fly here, so bear with me (BTW, I consulted WOMMA's Terminology Framework but didn't find terminology that describes the "why" of word of mouth). 

I think of micro-level word of mouth as something that companies can create for themselves by developing fantastic products, delivering fantastic service, and doing the right things in their advertising, sales, support, etc. to be memorable to consumers, somewhat independent of the external business and consumer environment (never completely independent, but relatively-speaking).  

Green marketing represents a very different opportunity, because the green trend is an externality.  Virtually every company has an opportunity (not all equal, of course) to benefit from increasing consumer sensitivity to the environmental practices of the companies they do business with, directly and indirectly.  To use a metaphor, green marketing is a big wave that everyone gets a chance to surf.  Some will surf it beautifully (authentically), while others will eat sand, and the majority of those in the latter category probably had no business surfing it in the first place.  Which are you, honestly?   

Coincidentally, the day I decided to write this post, eMarketer's "How Green is the Online Environment?" article appeared in my inbox.  It mentions new green marketing-focused research studies from DoubleClick and eMarketer, which may be worth a read if you are planning a green marketing campaign.  Just this morning, eMarketer followed up with another email newsletter article on green consumer demographics.  In summary, there is a strong positive correlation between environmental sensitivity and online engagement, especially among younger consumers.  "Green teens" indexed well above their non-green peers in multiple forms of engagement, from e-commerce and mobile content sites to using digital photo services and participating in chat rooms.  

Clearly, the green segment is a valuable one to target both online and off.  But before doing so, marketers should get comfortable with complete transparency.  The reputation risk of less than authentic green marketing is high, and as we've seen too many times in the recent past, today's online consumer is very adept at uncovering the truth in just a few Google searches.  On the flip side, if your brand has long upheld the green values that mainstream consumers are only now beginning to appreciate, you should absolutely consider using word of mouth marketing tactics to reach new consumers through the experiences, opinions, and recommendations of your satisfied customers.  

eMarketer's insights complement findings from a joint research study conducted by Bazaarvoice and Keller Fay Group late last year: 

Sixty-six percent of respondents that had posted feedback online about a product or service had done so at a retailer website for a purchase made offline.  

It seems that "online product reviews" are far more reflective of offline purchase decisions than online, a fact that should help e-commerce teams command a bit more attention and budget from their brick & mortar counterparts.  With the adoption of ratings & reviews, product questions & answers, and customer stories (read about our latest product, Bazaarvoice Stories) about brands themselves, e-commerce websites are now competing with each other not just on price and product selection but on the quantity, quality, authenticity, and relevance of the information they offer to help shoppers make a purchase, regardless of channel.  

As more of our multi-channel customers begin to leverage their customer-generated content beyond their websites, in catalogs, retail kiosks, in-store signage, and other offline marketing vehicles, the Web's influence on offline purchasing could outpace even the rapid growth of online spending.  

I single it out not because I hate critics but because it was voted 'helpful' by 205 out of 236 people.  In other words, this reviewer is speaking for a population of customers who simply ignore critics and trust each other instead.

Consider this ground-zero proof on a trend that continues to take hold.  We have briefed you on research about trust many times, and here are five of the 'most helpful' Bazaarblog posts on this topic:

1. Customer Recommendations Are Most Trust Forms of Advertising
2. 80% of Online Customers Trust Brands More with Reviews
3. 84% Trust User Reviews Over a Critic (MarketingSherpa)
4. 78% of Online Consumers Have More Trust for Brands with Reviews
5. Can Customers Trust Online Reviews?

Regardless of whether you trust them or not, critics do make us laugh with their witty writing style.   I got a chuckle out of Chris Farnsworth's quote on the movie, "Stallone looks like an overcooked Ball Park frank".  The lay customer may not be as witty, but they may be more trusted and therefore more influential at driving box office sales – and that's what really counts.

• Avenue A | Razorfish reports in their "Digital Consumer Behavior Study" that 55% of surveyed Internet users check other people's opinions online when researching products, topping product comparison charts (22%), expert reviews (21%), and shared shopping lists (1%).  If you are currently evaluating site feature investments for 2008 and beyond, get your hands on this report and read more about why you should invest in ratings and reviews. 
• Internet Retailer reports in "Web Site Design, Content and Rich Media" that consumers that read product reviews are likely to spend more online.  The largest group of surveyed users, 27.1%, reported spending 5-10% more, while almost 7% reported spending 20%+ more!  Need a business case for reviews?  Do the back of the napkin math for your business.  For a $25MM online retailer, if 7% of buyers spent 20% more, a reviews solution would pay for itself multiple times and easily fund investments in other site features.  
• Deloitte & Touche USA reports on the influence of reviews on purchase decisions by category.  Every listed category shows significant influence, from electronics (45% of respondents influenced) down to motor vehicles (13%, the lowest, but still significant).

While the highly sought after "Influentials" segment garners much of the focus of word of mouth marketers, Forrester's findings provide ammunition for more broadly focused approaches to enabling and capturing word of mouth.  Rather than thinking in campaign terms, brands should be seriously evaluating tools and technologies that can widely capture consumer opinions, enable deep analysis of what these opinions reveal about brand strengths and weaknesses, and facilitate the distribution of word of mouth to those who actively seek it, from the brand directly or from other sources.  

Fortunately, marketing spending trends suggest that this is in fact happening.  The eMarketer brief also states that spending on word of mouth marketing totaled $1 billion in 2006.  Small by traditional marketing standards but quickly growing, with 2006 spending representing a 36% increase over 2005.   

What's even more interesting to me is that "traditional" forms of advertising, like TV and radio, scored significantly higher than the predominant forms of online advertising – search and banner ads – in spite of the sophisticated targeting capabilities of search and display.  After all, isn't the goal of online ad targeting – behavioral, contextual, etc. – to provide a level of relevance and utility that excuses the intrusion of advertising?  Trust would seem to follow, but not so.  Consumers know the difference and they put their faith in each other first and foremost.      

These findings may explain the stellar case study results we've seen from several of our clients – higher conversion rates and significantly lower return rates on products that have customer reviews.  We are seeing similar results from our Ask & Answer solution, not to mention significant reduction in call center volume and costs!  In addition to selling each other, customers are also highly effective at servicing and supporting each other with product expertise and answers to tough "buy or bail" questions that arise when shopping online.  Can other forms of advertising do that?