15% of social media reviews fake in two years

Consumers' increased reliance on social media ratings and reviews will see enterprise spending on paid social media ratings and reviews increase, making up 10-15% of all reviews by 2014.

That is according to research group Gartner, who predicts increased media attention on fake social media ratings and reviews will result in at least two Fortune 500 brands facing litigation from the U.S. Federal Trade Commission (FTC) over the next two years.

“With over half of the Internet's population on social networks, organisations 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.”

“Organisations engaging in social media can help to promote trust by openly embracing both positive and negative reviews and leveraging negative reviews as a way to encourage customers with positive product or service experiences to share them on review sites as well.

"They should also respond to ratings and reviews in an official capacity to demonstrate willingness to engage in productive conversation with anyone.”

Gartner says businesses who opt to pay for phoney reviews can, and have, faced both public condemnation as well as monetary fines.

In 2009, the FTC determined that paying for positive reviews without disclosing that the reviewer had been compensated equates to deceptive advertising and would be prosecuted as such.

“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,” says Ed Thompson, vice president and distinguished analyst at Gartner.

“CMOs 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.”

As the FTC begins to crack down on this practice of fake reviews/ratings, some reputation management companies are taking a different approach, not posting new, fake, favorable reviews, but identifying fake and defaming reviews and requesting the reviewers or host site remove them or face legal repercussions.

Gartner analysts believe they expect a similar market of companies to emerge specialising in reputation defense versus reputation creation.

And although consumer trust in social media is currently low, consumer perception of tightened government regulation and increased media exposure of fake social media ratings and reviews will ultimately increase consumer trust in new and existing social media ratings and reviews.

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