Back in 2009 the Federal Trade Commission updated its Guides Concerning the Use of Endorsements and Testimonials in Advertising (which hadn’t been updated since 1980) in attempts to wrangle with the explosion of false paid reviews that were proliferating unchecked on consumer review sites like Yelp, Google Local, Insider Pages, and City Search. Despite that move, Gartner reported in September of 2012 that because of greater consumer dependence on social media based reviews we would see “enterprise spending on paid social media ratings and reviews increase, making up 10 to 15 percent of all reviews by 2014.” Gartner analysts also forecasted that building media attention surrounding rampant fake social media ratings and reviews would lead to the prosecution of “at least two Fortune 500 brands” by the FTC.
It was not really a surprise, we all know that for years many SEO firms that offer “reputation management services” have long been violating a principle tenant of the Truth-In-Advertising Act, which dictates that advertisers cannot pass themselves off as non-biased consumers while hyping products.
Some firms even go as far to use IP Proxy services, and other technology devices that disguise computer MAC addresses, to provide back-room managed services that propagate content. I learned this the hard way.
My Encounter with Fake Reviews!
Four weeks ago, I ordered from a “little-known” pizza shop a mile from my condo on Miami Beach. I wondered why I had never heard of this place before, and whether it was worth my $20. Skeptical about the quality given my lack of awareness of it in my neighborhood, I still decided to take the plunge after reading 10 great reviews about the food – the quality and quantity of reviews were impressive for this small business.
The verdict – cardboard pizza. It almost tasted like it was microwaved. And to top it off, 20 hours later, I cancelled my business trip to Chicago two hours before my flight feeling ill from food poisoning.
I wanted justice!
The Hammer Comes Down on Fake Reviews
On September 23rd New York Attorney General, Eric T. Schneiderman, announced that 19 companies have agreed to pay more than $350,000 in fines and renounce the practice of writing fake online reviews for their clients and for themselves. The collective “well if they are doing it, then I am going to do it too” mentality held by SEO companies and their clients that looked the other way, which laid the groundwork for an industry of fictitious online reputation building, just got a reality check.
Unlike the FTC’s 2009 shot across the bow, the precedent setting first strike made by Schneiderman came in the form of a year-long undercover investigation dubbed “Operation Clean Turf.” The operation investigated the reputation management industry and its role in the manipulation of consumer review websites with fake positive reviews, also known as Astroturfing.
“This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution. And companies that continue to engage in these practices should take note: ‘Astroturfing’ is the 21st century's version of false advertising, and prosecutors have many tools at their disposal to put an end to it,” assured Schneiderman.
The Public Still Trusts Online Reviews
In an interesting juxtaposition, several days before the news of Operation Clean Turf broke, Merchant Warehouse published a study that found:
- 72% of consumers trust online reviews as much as personal recommendations
- 44% of consumers base their choice of what business to go to on text reviews
Although Attorney General Schneiderman reiterated that we should take online consumer reviews with a grain of salt, they will nevertheless remain critical especially in the channel dynamic as I mentioned a few weeks ago when I wrote Why Brands Should Support Online Reputation Management of Local Affiliates.
As consumers, we often use substitutes to make decisions about the products or services we buy. The amount of time needed to process information in making a correct buying decision delivers decreasing marginal returns. The most powerful trade-off we use is our perception of a Brand. But in the case of small businesses, often lacking the brand recognition needed for this trade-off, reviews are our next best thing.
As a brand selling through distributed sales channels at the local level, getting the channel partner to promote your brand locally is one challenge. Often they don’t understand that your brand has more weight than theirs.
But perhaps just as important is the need for a reputation management policy through local channel partners.
As we see here, forget about schemes that promise to build online reputation by “generating” positive reviews – it is illegal! Reviews must happened organically, and for that to happen the brand must meet consumers in the digital spaces they frequent AND craft a strategy so that channel partners interact with those same consumers in digital spaces, all in a unified way.
How do you do that? By having a coordinated brand and channel partner social media management strategy. Here are a few helpful tips, through the use of technology, or otherwise, you should employ with your channel partners.
Brand, Lead Your Channel
- First, ensure the proper review site profiles are set-up for each, and optimized for every single local location your brand sells through (which has online visibility implications through local search). Regardless of whether you sell through a single or multi-brand distributor, dealer, agent or franchisee, you need to be helping them get on the map.
- Help your channel partners use their database to encourage their existing customers to write a review. If the channel partner has a retail front, set-up an in-store kiosk to collect this information.
- Place the banners or buttons from review sites on your website and those of channel affiliates so customers have the visual reference and can easily click to a review site
- Filter review responses and post them to a landing page you control. Then set-up rules, through your channel partners, to reply to your strongest advocates by encouraging additional reviews posted directly to the review sites that matter.
- In the event you do get a negative review, teach the right managers at each location to respond promptly. This demonstrates to the entire community that your brand is supported locally by professional partners you choose to do business with. They must convey:
- Put in review monitoring controls/ alerts, or other managed services in place as needed based on budgets, to assist with these efforts.
You don’t need false reviews or quid pro quo incentive offers to build a bank of good reviews across relevant review properties – Astroturfing is dying. If you provide value, meet your customers in the correct spaces, and give them the opportunities to review your product or service you can accrue positive reviews while staying off Attorney General Schneiderman’s hit list.
About the Author
Jared is the Chief Executive Officer of SproutLoud. Since 2006, he has been primarily responsible for strategic direction of the Company, as well as the oversight of SproutLoud's Partner ecosystem. Prior to SproutLoud, Jared worked in Thomas Weisel Partner’s internet and online advertising investment banking practice in San Francisco. He served as the lead analyst on a number of Corporate Finance and M&A deals including Newscorps’ buyout of Intermix Media (Myspace.com). Jared graduated with a B.A. in Finance and Marketing from the McIntire School of Commerce at the University of Virginia. Jared has an MBA from the Kellogg School of Management at Northwestern University and is a member of the Young President's Organization (YPO). Jared has been honored as one of the Top 40 Under 40 Entrepreneurs by South Florida Business Journal and a Top 50 Entrepreneur by Business Leader Magazine. Jared lives in South Florida with his wife and two sons.More Content by Jared Shusterman