As large corporations wrestle with social media platforms like Facebook and Twitter to sell their goods and services to an online, socially-interconnected audience, the temptation to write paid or fake reviews of products will grow, according to IT research firm Gartner. The company's report predicts enterprise spending on paid social media ratings and reviews would make up 10 to 15 percent of all reviews by 2014, leading to at least two Fortune 500 companies being investigated by the U.S. Federal Trade Commission (FTC) within the next two years.
"With over half of the Internet's population on social networks, 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 prepared statement. "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."
In 2009, the FTC ruled that positive reviews posted to a site that do not disclaim the fact that the reviewer had been compensated amounted to false advertising, and businesses that participated in these deceptive practices could face monetary fines and public condemnation. Moreover, the practice could also inflate the purported importance of certain social networking platforms, leading to an overvaluation of advertising rates.
"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," Ed Thompson, vice president and distinguished analyst at Gartner, said in a press release. "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."
This article was originally published on 09-17-2012