Innovations in Identity

online review sites

Review Sites: To Trust, or Not to Trust, That is the Question

online review sitesThe use of online review sites is at an all time high in popularity. Nowadays, consumers are educated and savvy online shoppers who do their research and don’t care what companies have to say about their business: they care what others have to say; they rely on “social proof.”

The June 2013 findings from BrightLocal’s Local Consumer Review Survey indicate that 79% of consumers in the US and Canada trust online reviews as much as personal recommendations.

However, online reviews must be real and authentic in order for users to continue trusting these sites. Community managers and product managers work hard to maintain this trust, meaning that they must be able to identify and filter malicious activities attempting to game the system with fake reviews and profiles.

As consumers rely more and more on online reviews for purchasing decisions, review sites experience more issues with fake reviews. TripAdvisor and Edmunds.com are just two of the many sites that have to take several steps to control the attacks from fake reviewers because they undermine the trust that consumers put on their sites. The cost of taking a reactive approach with fake reviewers, instead of a proactive one, is high as the following two case studies will demonstrate.

Case Study #1: The Legal Woes of Edmunds.com

Founded in the 1960s as a paperback newsstand publication, Edmunds has grown into the go-to source for information for car shoppers. Ranked among the top 400 websites in the United States, Edmunds.com receives a good chunk of its traffic from its user reviews from car dealerships in the US.

Unfortunately, some marketing companies have been taking advantage of the thousands of car dealerships around the country that are looking to stand out at review sites such as Edmunds.com. Humankind Design Ltd. was sued by Edmunds.com because the former registered almost 2,200 “consumers” to review cars or dealerships at the site. It is safe to assume that customers from Humankind Design were tempted by the low cost and short period of time to start seeing ROI. According to Humandkind’ site, it takes just “a month to earn your business” and “packages start as low as $100”.

While it is understandable that the 25 car dealerships that hired the services from Humankind may not be fully aware of the company was posting the “consumer testimonials”, Edmunds.com was fully aware of the financial and business implications of those fake reviews.

Edmunds.com realized they needed to dedicate considerable resources to maintain the integrity of its ratings and reviews data because without user trust, reviews are nothing more than a few lines of text. After about a month of intensive legal negotiations, Edmunds.com was able to reach a settlement agreement with Humankind in which the latter submitted to a permanent injunction not to participate in the online community, agreed to provide Edmunds.com with all fake member accounts and to pay an undisclosed amount to cover legal fees.

Case Study Takeaway: This is a victory for Edmunds.com. Still, online review sites should pay close attention to the existence of companies whose actions undermine the trust that users put in their reviews. No matter how detailed a site’s membership agreement may be (and Edmunds.com’s is very detailed), all review sites need to be more proactive about eliminating fake reviewers. Not all companies have access to the cash resources that Edmunds.com has to combat fake reviewers on the court, so companies should look into more proactive and cost efficient methods.

Case Study #2: TripAdvisor’s Review Dilemma

Trading in NASDAQ, TripAdvisor is one of the world’s largest travel sites, featuring reviews and travel advice from travelers, hotels, resorts, vacation rentals, and pretty much anything related to travel. The economic incentive for businesses to be listed and reviewed in TripAdvisor is clearly there. The Cornell University School of Hotel Administration found that if a hotel increases its review scores by 1 point on a 5-point scale (e.g., from 3.2 to 4.2) on TripAdvisor, the hotel could increase its price by 11.2% and still maintain the same occupancy or market share.

The economic incentive for hotels to manipulate reviews is great. Researchers Chevalier, Dover, and Mayzlin have found in their research of hotel review sites such as TripAdvisor, Expedia and Orbitz that TripAdvisor offers lower barriers to fake reviews than other travel review sites. The cost of posting a fake review on Expedia and Orbitz is higher because the site users must have actually booked at least one night at the hotel through those sites. If we were to take the Humankind example from above and assume an average cost per night at $100, it would cost the fake reviewer about $220,000 to maintain 2,200 fake accounts. Research indicates that hotels with a high incentive for publishing fake reviews have a greater share of five-star (positive) reviews on TripAdvisor relative to Expedia.

Case Study Takeaway: Since TripAdvisor only requires its members to register an account to start reviewing hotels and other vacation properties; there is no disincentive for malicious activity to take place. According to a TripAdvisor spokesman in July 2013, the review site receives over 60 pieces of content every minute.

In order to regain trust from users, TripAdvisor should incorporate a system that weeds out fake reviews and profiles from its site. Whether the solution is a system that requires users to book before posting a review or a program that verifies a user’s identity in order to write reviews, TripAdvisor needs to institute measures to filter and discourage malicious activities that are causing users to distrust its reviews. By leveraging the latest technologies, TripAdvisor would be able to demonstrate that it is doing the very best to eliminate fake reviews.

Conclusion: Build and Maintain the Trust of Your Site by Proactively Recognizing Fake Reviews

Reviews sites are only as good as the trust people have in its reviews. Businesses build their brands on trust, and review sites containing false reviews are damaging to the company’s reputation and value proposition. The survey from Edge Strategy points out that authenticity is a key factor in whether or not consumers trust them. It is not just a matter of having multiple customer reviews, but also of the quality of those reviews.

The cases of Edmunds.com and TripAdvisor show the importance of creating barriers to fake reviewers such as detailed membership agreements and monetary disincentives. Given the expensive costs of fighting fake reviewers on court and opportunity costs of creating transaction requirements to post reviews, a better approach is to take proactive action against fake reviewers.

One solution has been pioneered by Trulioo, the world’s first social driven online identity bureau. “We offer a product called TruDetect, which allows companies to verify users upon social login” said Stephen Ufford, CEO of Trulioo. “Once users have registered on your site via social login, the tool analyzes the data and determines whether or not the account is legit or fake. It’s proved to be a huge success in combating fake reviews, fraud, cyber bullying, trolls, and spammers.”

By taking a proactive approach, review sites demonstrate that they are taking appropriate actions to mitigate false reviews and earn trust from users who rely on “social proof,” which is the bread and butter of their business.

by Tanis Jorge, COO at Trulioo

The information in this blog is intended for public discussion and educational purposes only. It does not constitute legal advice.

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