The fierce competition for a positive online reputation has led many companies to fake their way to the top on Google Places, Yelp, Tripadvisor and other popular social media destinations.
New York, New York (PRWEB) September 27, 2012
By 2014, 10% to 15% of social media reviews will be fake and paid for by companies, according to a new study by Gartner, a leading technology research and advisory company. “This study confirms what reputation management experts have known all along -- the fierce competition for a positive online reputation has led many companies to fake their way to the top on Google Places, Yelp, Tripadvisor and other popular social media destinations,” says Todd William, founder and CEO of Reputation Rhino, a top-rated reputation management company in New York City.
From Fortune 500 brands to local stores and restaurants, consumers are looking at online reviews before deciding whether to purchase a particular product or service and a single star can make a difference. A 2012 study by Weber Shandwick found that 83% of consumers say online reviews influence their perception of a company.
Brands are pouring billions of marketing dollars into Facebook, Twitter and YouTube to attract fans and followers and establish valuable social connections with customers, but some companies are taking advantage of review sites which allow anonymous posts with little more than an email address.
While online reputation management companies help businesses deal with negative reviews and the damage that results from online complaints, fake or paid online positive reviews is emerging as a serious business risk as unethical marketing practices by companies come under increased scrutiny by government regulators.
In 2009, the U.S. Federal Trade Commission (FTC) issued guidelines on how companies and bloggers should address paying for blog coverage or online reviews. The FTC’s revised guidelines on endorsements and testimonials, issued in 2009, explain when the agency may find endorsements or testimonials unfair or deceptive. Under the guidelines, a positive review by a person connected to the seller – or someone who receives cash or in-kind payment to review a product or service – should disclose the material connection between the reviewer and the seller of the product or service.
In April 2010, the FTC investigated retailer Ann Taylor, but didn’t issue a fine. In August 2010, Reverb Communications settled with the FTC after posting fake online reviews. In March 2011, the FTC fined Legacy Learning Systems $250,000 to settle charges that it deceptively advertised its products through online affiliate marketers who falsely posed as ordinary consumers or independent reviewers. Increased regulatory scrutiny and widespread media attention is creating new business opportunities for companies like Reputation Rhino.
“While our primary focus is helping businesses improve their online reputation and owning page one of Google,” says William, “we have the tools and talent to take down fake or paid reviews by our client’s competitors who have forgotten the importance of ethics and trust in brand management.”