micro-influencers

Article | From Recommendations and Reviews to Fines and Jail by Team TRIBAM

 

Dear Tribe

As mentioned in our previous Newsletter, we are keen to share with you some of the thinking and rationale behind the development of TRIBAM.
Our article below summarises one of the key drivers, which has accelerated over the last few years.
We hope you will find it useful.

And please, do share it with your friends and family - that will help us get our word out !

Until next time,

Team TRIBAM

 
Blog Picture - Fines and Jail - 26072019_no banner.png

Recommendations, reviews - what’s new ? Reviews and recommendations are a central part of our assessment of products and services: restaurants to book for our next date night, hotels to visit for our next family vacation, goods to purchase… 97% of the adults surveyed by Which? (the UK consumer association) use online customer reviews when researching a product.

What is new is that reviews and recommendations can lead to jail. Or being fined tens of millions of dollars.

That is how serious reviews and recommendations are. That is how seriously harmful fake reviews and fake recommendations can be.  

Spreading like a virus

Incumbent online platforms offering consumer reviews, after years of benefiting from the engagement coming from consumer exchanges on their platforms, are facing an increasing challenge: a growing portion of the reviews and recommendations on those platforms are fake. Manipulated. Fabricated. Plain and simple.

In a recent investigation, it took less than a couple of hours to Which? to identify more than 10,000 fake reviews on Amazon just looking at 24 models of headphones. 10,000 in less than 2 hours.

But this is just anecdotal evidence of what is the tip of the iceberg. Even more concerning: an iceberg which, unlike our real ones up North, is growing in size exponentially. By the day. 

For a simple reason: the unchecked conflicts of interests in the digital world have created tremendous economic incentives to manipulate reviews, since those reviews have significant value to the consumers and the businesses. To the point where a complete ecosystem has been created to monetise the opportunity to “manipulate” reviews and recommendations.

Companies have been created, some legitimate, some full-blown fraudulent, to leverage that opportunity.

But what has now changed, is that regulators, consumer agencies and the general public are finally waking up to this critical issue. Critical for the consumers (us). But also critical for the businesses unfairly targeted by negative reviews.

From fake reviews to jail

Fraudulent businesses have been created around the globe offering brands and businesses to write fake reviews and fake recommendations against payment. A very simple and efficient business model. 

Just earlier this year, following a review of the web over a 6 months period, the Competition and Market Authority (CMA) in the UK identified more than 100 businesses advertising their services on eBay: selling fake reviews and recommendations. Over the same period, they identified more than 26 Facebook groups where similar businesses were recruiting people to be paid to write fake recommendations.

Below: exchange between an employee of Which? (during an undercover investigation) and a company offering fake reviews.
 Click on any image to enlarge. Full article here.
 

On the other side of the pond, the Federal Trade Commission (FTC) charged and fined a “marketing” company selling fake reviews on Amazon more than $12m. That was a first ever for the FTC. Probably not a last.

And back closer to us on the Continent, at the end of last year, the owner of another “marketing company” was convicted by the Italian court, in a landmark fraud ruling, for selling fake reviews on TripAdvisor to hundreds of hotels and restaurants. If you want to know: they charged €100 for 10 reviews, €170 for 20 and €240 for 30. The sentence ? 9 months in jail.

Shades of grey - from manipulated reviews to multi-million dollar fines

But some of the conflicts of interest are more subtle. More difficult to identify. With consequences as severe, if not more. 

Those are driven by some members of another growing phenomenon on social media: the influencers, micro-influencers and other social media “celebrities”. Let’s be clear: most of them do a great and genuine job. Sharing their discoveries, thoughts and convictions with their followers, in an honest manner. The issue is the less scrupulous, less transparent subset: those who have identified the same opportunity to monetise the inherent conflict of interest in social media. 

The work of the less scrupulous ones is often facilitated by social marketing companies who are getting hired to help their clients “monetise their followers”. Basically, get them marketing and advertising contracts with brands and businesses. So far, so good. The problem arises when they do so without the minimum level of transparency vis-a-vis their followers. The consumers. Us. Simply: when they do not disclose that their post, communication, blog entry are supported financially by a third party. Basically, that they are advertisement.

That is where trust breaks. 

Increasingly concerned by those misleading practices, the CMA investigated a few “marketing” companies. They ended up convicting a handful including one of the largest global players for having “used its own social media accounts, and arranged for widely followed social media personalities, to promote films, games and takeaway and dating apps, without readers being informed that the content was paid-for advertising.” 

And to maximise the “Return On Investment” of those, the posts are purposefully designed to create the confusion.

As per the CMA: “these adverts may have been difficult for readers to distinguish from other posts, conversations and jokes they appeared alongside.”

To reiterate: a lot of the bloggers out there do a fantastic job. But their contribution is tarnished by that of the less principled ones.

Back to basics

We feel strongly that this is an area where social media and us, consumers, need to make some clear progress. From the professionals: by providing more transparency to the consumers. From the consumers: by being more sensitive to potential conflicts of interest.

How ? Simple: if we actually know the source of the review or recommendation, then the room for a potential conflict is greatly mitigated.

Back to basics: when we need a recommendation, let’s start by asking our friends and family.

(Credits: icons by Louis Prado, Anbileru Adeleru and Adrien Coquet from the Noun Project.)
 
 

We hope you found the above useful and interesting. We too were surprised when we discovered the extend of those misleading practices.

Please, do share this article with your friends and family if you found it useful - that will help us get our word out.

And, if not already done, sign up below to join the waitlist for the upcoming launch of TRIBAM.

Until next time,

Team TRIBAM