Valeria Maltoni recently posted on Conversation Agent about – among other interesting things – relevance and authenticity. It’s something that we think about a lot here at Zavee because we believe that consumers demand both from an online marketing platform such as a review site.

However, Valeria talks about these concepts in the context of in-stream advertising on Twitter:

Will relevance trump authenticity? Do you care if your friend truly believes in something he advertises if it’s relevant to you? This question goes to the heart of behavioral science and trust – you might want to think about it more than just a little.

Relevance matters because consumers demand the responsiveness brands are capable of providing. Brands are learning about their audiences and either developing products to meet their needs or finding the best audience for the products they have. McDonald’s has added new products and changed others to respond to the needs of an audience it now understands better than before. Cadillac realized that there was an audience for upscale American cars that was younger, more active and more diverse than the stereotypical Cadillac owner, and created fresh (if not perfect) new vehicles for that new market. Social media is an efficient way to promote relevance, because brands can respond to consumers in near-real time. This has captured the attention not just of brands such as Best Buy, with its twelpforce program that uses Twitter to engage customers, but also of brands such as … McDonald’s and Cadillac.

Effect of In-Tweet Ads?

Authenticity matters because, if consumers are going to be influenced in their purchase decisions they want to be able to trust the source of that influence. It isn’t surprising that personal recommendations are more powerful drivers of consumer behavior than brand messages. If we trust recommendations from peers it isn’t just because they know what we like, or even that they know what they’re talking about, it’s because we trust them not to screw us when they recommend a product or brand.

We don’t think the long-term risk from sponsored recommendations is that consumers will be screwed, especially if those making recommendations both disclose that they are being compensated and are truthful in their suggestions. We think the greater risk is that consumers will become less trusting of social media generally and will require a deeper or longer relationship before relying on any online recommendation. That would be bad news for brands, because making consumers more cautious about relying on peer recommendations should be the last thing brands want to do. Their strategy should be to increase both the number and influence of their brand advocates. Sponsoring tweets and blog posts could be one of those strategies with short term benefits but long term costs.

Update (1/26/10): Fixed typo in last paragraph.