FTC ruling does little to stem fraudulent review tide
San Francisco, CA -- (SBWIRE) -- 09/28/2012 -- A recent study found that by 2014 roughly 10 to 15% of social media reviews will be faked. The report comes from Gartner, Inc., the world’s leading information technology research and advisory company. Gartner, Inc. is based in Connecticut and was founded in 1979.
To tip the review scales in their favor, some companies resort to paying for fake reviews and spambots (programs designed to harvest email addresses to build mailing lists for unsolicited email messages) on sites including Amazon, Yelp and Rotten Tomatoes. With more than half of the internet population using social network sites, the medium presents businesses with a financially potent marketing opportunity.
“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,” Jenny Sussin, senior research analyst at Gartner said in a statement. This opportunity has proven irresistible to many, including two Fortune 500 companies facing litigation from the Federal Trade Commission for illicit social media practices. Some companies exchange pay or other forms of compensation, including gift cards or free products, for positive reviews of their products, whether or not the reviewer has ever used their products or services.
The FTC ruled that reviews for products without disclosures, including that the reviewer was paid or received a gift in exchange for the review, is fraudulent activity punishable with fines. Upon learning of the FTC’s Guide Concerning the Use of Endorsements and Testimonials in Advertising initially drew sharp criticism from the blogosphere.
The practice of writing fake reviews has shifted in recent years from blogs to social networks, where companies can purchase Facebook “likes” or Twitter followers. The popular website Fiverr, for example, sells several hundred Facebook “likes” for $5. This development is proof of the mounting pressure on companies to compete in the social network marketing arena. “Marketing, customer service, and IT social media managers looking to use reviews, fans, and ‘Likes’ to improve their brand’s reputation on social media must beware of the potential negative consequences on corporate reputation and profitability,” said Ed Thompson, Gartner
Vice President and analyst.
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