Companies’ spending on paid-for positive reviews and social media ratings will increase, making up 10 to 15 percent of all reviews by 2014, says a new study.
A Rising Trend
The news from Gartner, Inc., comes as analysts predict that the increased media attention on fake reviews will result in the U.S. Federal Trade Commission (FTC) suing at least two Fortune 500 brands over the next two years, thanks to a 2009 ruling that deemed paying for bogus reviews false advertising.
“With over half of the Internet's population on social networks, organizations are scrambling for new ways to build bigger follower bases, generate more hits on videos, garner more positive reviews than their competitors and solicit ‘likes’ on their Facebook pages,” says Jenny Sussin, senior research analyst at Gartner. “Many marketers have turned to paying for positive reviews with cash, coupons and promotions including additional hits on YouTube videos in order to pique site visitors' interests in the hope of increasing sales, customer loyalty and customer advocacy through social media ‘word of mouth’ campaigns.”
Truth in Advertising?
Small businesses won’t be immune to FTC scrutiny: In 2010, a public relations agency called Reverb Communications settled with the FTC on charges it had employees pose as ordinary consumers posting game reviews at the online iTunes store.
"Companies, including public relations firms involved in online marketing, need to abide by long-held principles of truth in advertising,” Mary Engle, director of the FTC’s Division of Advertising Practices, said at the time. “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.”
Gartner vice president Ed Thompson said companies hoping to improve their brand’s reputation on social media by paying for it would have to weigh the potential fallout on company reputation and profitability.
Businesses, he says, “will need to weigh the longer-term risks of being caught and the associated fines and damage to reputation and balance them against the short-term potential rewards of increased business and the prevailing common business practice in their market, often regardless of ethics.”
Gartner predicted an FTC crackdown would create a market for a new kind of reputation management company—reputation defense instead of buzzmakers. Instead of paying for fake favorable reviews, instead you’d pay for a company to figure out which reviews are fake negative ones and request the reviewers remove them or face legal action.
Would you (or have you) paid for positive reviews?