Damien Venuto: The industry consumers simply don't trust

Revelations about Trivago could have a much broader impact. Photo / File

COMMENT:

Revelations this week that a major online company had misled and deceived customers weren't altogether surprising.

Anyone who had recently logged in to Trivago would have felt that familiar uncertainty about whether they really did get the best deal available. It turns out that our intrinsic Spidey sense was onto something, and a careful look under the hood has revealed a clever ruse to extract as much commission as possible from hotels.

The reputational damage done here goes way beyond Trivago. The company's sneaky moves have cast doubt over the whole idea that comparison and search engines do in fact churn out the best results for consumers. It has given a smoking gun to anyone who believes you can't trust anything you see online.

"Consumer trust is critical as it provides a licence to operate," Association of New Zealand Advertisers (ANZA) chief executive Lindsay Mouat tells the Herald.

"Anything that undermines that trust damages not only the reputation of the brand in question, but weakens the credibility of advertising generally."

Trivago isn't the first online travel organisation to contribute to the degradation of trust online. As far back as 2012, Peter Hook, the self-styled former director of propaganda at Accor Hotels, was outed as having contributed 106 reviews in 43 cities on TripAdvisor. The ones he wrote about Accor establishments were glowing, but competitors weren't quite so lucky under Hook's critical eye.

There are more subtle examples from the online booking industry that also contribute to the growing sense of mistrust. When, for instance, users are slapped with hefty cleaning fees or taxes, an online hotel or bach booking that seemed affordable at the listed "per night" price suddenly feels like a rip-off.

These newsworthy events, combined with countless personal anecdotes about dodgy adverts, have led to overall trust in advertising falling off a cliff, according to numerous global surveys.

The annual Edelman annual trust barometer has put the UK's trust in advertising at around 37 per cent - behind those other much-admired industries banking, energy and telecoms.

Trade publication Marketing Week also points to a US-based study by PwC that saw marketing advertising deliver a rating of just 3 per cent when consumers were asked about the types of industries internet users trust.

Other surveys regularly rank advertising executives behind real estate agents, bankers and politicians in terms of whether they're trusted to tell the truth.

These studies may not isolate the New Zealand results, but ANZA's Mouat believes there's "nothing to suggest that the trend in New Zealand would be different from other markets".

Make no mistake, advertisers have always stretched the truth. In fact, the Advertising Standards Authority's rules allow for a certain degree of hyperbole.

The difference now is that these matters are playing out in a cynical context where the pejorative "fake news" is thrown around with increasing regularity, often casting doubt on anything said online.

The rapid migration of advertising caught us with our pants down. Over decades, we've been wrapped in a false sense of security, driven by the notion that there were rules designed to protect us from falling victim to the dodgiest claims.

Not even the US Government was ready for an age in which anyone with a credit card could log into the world's biggest media channels and distribute whatever they wanted. And the reluctant tech guardians we have now aren't quite as interested in walking the controversial tightrope of separating lies from fiction and determining what we can and cannot say.

"I think it would be wrong to blame all our woes on digital," says Mouat.

"But it has been an enabler by way of formats and access without the traditional gatekeeper role of media owners checking ads before they were published or broadcast."

The question Mouat can't answer is how you go about fixing this problem, with the adman simply saying it's "a challenge the wider industry needs to address collectively".

A Devil's advocate might question how much it matters if people don't trust advertising. How much can it really hurt if consumers disregard every ad they see as "fake news" or a series of lies?

But the reality is that this can hurt the economy. At its core, advertising is simply an attempt by businesses to relay information to their customers. And if every bit of information is picked apart or perhaps even disregarded entirely, it slows down the process of commerce. Trust speeds things up. A marketing message that's trusted will always deliver more value than a blast of a thousand annoying ads from an organisation with a sullied track record.

"Advertising without trust is just noise," said Unilever chief marketing officer Keith Weed in an interview last year.

And if that noise continues to drown out the messages of legitimate businesses interested in trading with consumers, then bit by bit, lost sale by lost sale, this could ultimately hurt the economy.