Marketers Beware: Reviews Work Wonders, but Should Not Be Faked
September 10, 2012Tags: Amazon, Edward Keller, expedia, Keller Fay Group, open table, Reviews, trip advisor, WOM, WOMMA
By Ed Keller
A recent article in the New York Times caught my eye. Entitled “The Best Book Reviews Money Can Buy,” the article says there is a growing practice of authors who commission reviews for their books, rather than letting them spring up organically on online sites such as Amazon.com or BN.com.
It’s not just authors who crave positive reviews. The products and services from businesses of all sizes and sectors are now being reviewed online, whether on Amazon, or travel sites such as Trip Advisor or Expedia, or restaurant sites such as Open Table, or sites relating to local service providers, like Angie’s List and Yelp, or the many retail and manufacturers that offer online ratings on their websites.
The growth of ratings and reviews makes perfect sense. The research is very clear that online reviews are popular with consumers and are a powerful driver of online (and offline) commerce. According to Google’s widely quoted ZMOT (zero moment of truth) report, 70% of Americans say they look at reviews before taking the next step to purchase products. And according to a 2012 global study by Nielsen, online consumer reviews are the second most trusted form of advertising with 70 percent of global consumers surveyed online indicating they trust this platform, an increase of 15 percent in four years; only word of mouth recommendations directly from friends or family is more trusted. The Times article quotes professor Bing Liu from the University of Illinois who says “The wheels of online commerce run on positive reviews.”
The troubling part about the Times article is the underlying premise that people with something to sell feel so strongly motivated to get positive reviews that they would fake it by writing them themselves or paying people to write positive reviews, rather than building up a stable to authentic reviews from customers. This is a bad business practice on two counts.
First, the marketplace is too wise to let fake reviews go unnoticed, and there is a very good chance the people who do so will be “smoked out” and publicly embarrassed, thereby negating whatever benefit they might have otherwise achieved. Second, it is potentially against the law and many businesses do not realize that. A few years ago the Federal Trade Commission issued new advertising guidelines that cover social media and word of mouth marketing. The guidelines make clear that companies are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose a material connection between themselves and their endorsers.
In one of the first cases the FTC brought under these new guidelines, a PR agency, Reverb , was charged with having engaged in deceptive advertising by having employees pose as ordinary citizens while posting game reviews online and not disclosing that the reviews came from paid employees working on behalf of the game developers. In the press release announcing the action, Mary Engle, the Director of the FTC’s Division of Advertising Practices stated: “Companies, including public relations firms involved in online marketing, need to abide by long-held principles of truth in advertising. Advertisers should not pass themselves off as ordinary consumers touting a product, and endorsers should make it clear when they have financial connections to sellers.”
If you’re unsure what constitutes ethical business practices in this area, you might want to check out the Word of Mouth Marketing Association. The WOMMA Ethics Code provides a strong guidepost to help businesses, whether large or small, plan your social media disclosure activities. (Disclosure: WOMMA recently partnered with social software company Bazaarvoice to develop new industry standards to strengthen the integrity of consumer-generated review content. Brands around the globe recognize that the authentic voice of consumers drives business – and consumers trust these opinions over other forms of content including advertisements and editorial reviews. In a recent comment on this subject, Bazaarvoice CEO Brett Hurt said, “Through a combination of device fingerprinting, fraud management rules, and proprietary algorithms, we can readily identify potentially fraudulent content.” The new standards ensure social content is free from fraud and SPAM; free from edits, classifications or alterations; and is transparent. (Disclosure: I am on the Board of Bazaarvoice. My business partner, Brad Fay, is on the WOMMA Board of Directors and I am a former President of the association.)
In terms of transparency, WOMMA says that any word of mouth or social media marketing should include:
• Disclosure of identity: Make meaningful disclosures of your relationships or identities with consumers in relation to any marketing initiatives that could influence a consumer’s purchasing decisions.
• Disclosure of consideration or compensation received: Do not engage in marketing practices where the marketer/sponsor or its representative provides goods, services, or compensation to the consumer as consideration for recommendations, reviews, or endorsements, unless full, meaningful, and prominent disclosure is provided.
• Disclosure of relationship: Any brand or representatives involved in a word of mouth initiative on their behalf should disclose the material aspects of their commercial relationship with a marketer, including the specific type of any remuneration or consideration received.
What it all comes down in the end is that there should be genuine honesty in communication. That’s what makes consumers turn to word of mouth and social media for advice, recommendations, and help in making product choices. If you’re honest, your efforts will be rewarded. If you’re dishonest, it will be come back to haunt you.
The bottom line for all businesses is that your reviews are being read and are moving your business forward. Embrace that. But also, you are being watched, both by the FTC and also by consumers who have an uncanny sense of smell for what’s real and what’s fake. Don’t kill the goose that is laying the golden eggs.
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