53% of consumers more likely to purchase from brands that are transparent on social media

Dive Brief:

Eighty-six percent of surveyed consumers think transparency from businesses is more important than ever, and 40% attribute the importance to the influence of social media, according to findings from a new report by Sprout Social made available to Marketing Dive. Only 15% of respondents think brands are currently "very transparent" on social.
More than half of consumers, or 53%, said they would be more likely to consider brands that are transparent on social media for their next purchase, while a lack of transparency might lead 86% to purchase from a competitor. Consumers place a higher standard on businesses than politicians, nonprofits, friends and family and themselves. However, about nine in 10 consumers said they are more willing to give brands a second chance after a bad experience, and 85% say they will stick with brands during a crisis when they are more transparent overall.
One-third of respondents would purchase more from brands if their CEO demonstrates transparency on social media, and 63% said CEOs with their own profiles are better representations of companies. Seventy percent of millennials want CEOs to have a personal profile on social, and millennials said social media is the top communication channel where they want brands to be transparent.

Dive Insight:

Transparency has been a running theme in the marketing world for years now, but the Sprout Social report emphasizes how many marketers are still coming up short in terms of how honestly they present their businesses and brands to consumers online. Concerns over a lack of transparency are likely heightened in 2018 amid growing controversies over the role social media plays in spreading fake news and collecting data on users, such as through Facebook's Cambridge Analytica scandal.

Overall satisfaction with social media dropped 1.4% in the American Customer Satisfaction Index’s 2018 E-Business Report released last month, making it the lowest ranked among e-businesses. Marketers that are not transparent on social media also risk losing key groups of younger consumers. More than one-third of surveyed Gen Zers have said they plan to leave social media, citing privacy concerns and negative content among the top reasons, according to findings from Hill Holliday's in-house research group Origin.

Marketers wanting to win over Gen Zers and similar, digital- and mobile-first demographics like millennials might think about taking a people-based approach to their social strategies. Millennial-focused campaigns, in particular, might put a human face on the brand that can foster transparency given the Sprout Social findings around positive responses to CEOs having personal profiles for communications purposes.

Sprout Social's insights around CEOs' profiles support other recent research around millennial preferences. Women in the age segment seek out brands that they can be proud to support, and more than 40% know their favorite brand's origin story, know who founded the brand and follow someone affiliated with the brand on social media, per a study published by Merkle and Levo earlier this year.