It’s easy for marketers to think that large numbers of consumers reached equals success, especially with the Internet, where the traffic is potentially huge. It’s the same fallacy that bedevilled the direct mail industry for years.

This is becoming an issue again with the revelation that trust in friends and peers is declining. According to Edelman’s 2010 Trust Barometer, published last month, the number of people who view their friends and peers as credible sources of information about a company has dropped from 45% in 2008 to 25% this year, a big decline.

This is attributed in large part to the growth of social media networks, and the exposure consumers are getting to all kinds of recommendations that in reality they have little interest in pursuing. The bigger the networks get, the more the commodity of ‘trust’ becomes eroded. It may also have something to do with the increasing business penetration of social media, and the increase in the number of marketing messages flying around.

If trust is declining, does that mean the channel is becoming less relevant for businesses? Not necessarily. Referrals from friends still matter.

But the whole idea of ‘friends’, as hyped by Facebook in particular, is not what one would customarily associate with the term. I was shocked by the ‘scientific findings’ back in January that 150 friends is the most that one person can typically manage, not because it was a vastly smaller number than the thousands that one can theoretically communicate with on Facebook, but because it’s still so large. My guess is that most people’s meaningful relationships number 20 or 30 at most, and for some it’s a dozen or so, if that. These are the people one really trusts.

For a business, there’s an analogy here. It’s the difference between advertising on the one hand, and developing relationships on the other.

If a business treats social media as an advertising channel, a way of getting a message out, the effect will be heavily diluted, because any ‘recommendations’ will be treated with scepticism. If, instead, it searches out those consumers who have a real or potential interest in its product or service, and develops a dialogue with them, it is far more likely to benefit.