The Review Economy – What is a Positive Review Worth? $3.22

I manage the online marketing for a small insurance company in Bradford Pa, Sundahl and Co. Insurance. While looking at the local search results the other day, I noticed that a local competitor was suddenly showing up with a number of reviews. It surprised me as the insurance market segment and this area of the country don’t really lend themselves to “organic” reviews. I have two insurance agencies that I have done work for, both market leaders, and between them they had garnered 2 natural reviews over the past 3 years.

Upon examination it became immediately clear that the reviews for this agent were purchased, faked or to otherwise procured without a real customer. In the past few weeks I have had several other experiences indicating the rapid commodification of reviews….

* I saw that my Honda dealer, with a mediocre service department at best, had started “buying” reviews.
* Stever, a local seo in Canada, Someone (I can’t remember who) was kind enough to send me a link to a “3 positive reviews for $5″ offer at Fiverr.com and “a short review on your Google places account for $5″
* Brian Combs of Ionadas.com sent me a copy of a email spam that arrived via his contact form touting the benefits of positive reviews from a company called PostPositiveReviews.com. Their whole business model predicated on trading in reviews and back links.


When you look at their prices (assuming 1/2 for links and 1/2 for reviews), a review is essentially selling for $3 each. At Fiverr.com, some were cheaper, going for as little as $1.66 per review and some costing as much as $5.00. (Do they get better if you spend more?) The average: $3.22.

Capitalism is a funny thing. There is a tendency to commodify everything. You can see this in the ongoing efforts to privatize water sales. If air could be bottled and constrained, it too would have a price placed on it.

I shouldn’t have been surprised that positive reviews now have a market value. But still one has to ask why should a business pay for something that can essentially be had for free?

Fear? Lack of knowledge? Terrible service? Laziness? Maybe all of those things as it seems as all too many businesses seem to do it.

With a little thought (or just a little more money) most businesses could successfully execute and benefit from a review management process that garners real reviews. Even the worst business in the world has happy customers, no? My Honda dealer must have them as they have managed to stay in business for a very long time.

How hard is it to set up a review management program that is above board and approaches the process with integrity rather than greed and why don’t more businesses realize that?

Here are several articles that detail all a company needs to know to set up a review plan. It isn’t rocket science:

Principles for a Review Plan: Considerations in encouraging customer reviews
Responding to Negative Reviews – Your Prospects are the Real Audience
Asking for Reviews – UMoveFree Finds the Groove
Garnering Reviews – A Mom & (no) Pop Shop finally Hops on Reviews
Reviews: Lipstick on a Pig Leads to User Backlash

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27 thoughts on “The Review Economy – What is a Positive Review Worth? $3.22”

  1. I’ve never liked the fact that Google uses reviews as a ranking signal. I know of way too many companies that have done it when I’ve clearly advised against it. It’s still just way too easy in my opinion.

  2. The reason reviews have value is, primarily, because they create better placement in search results. It all goes back to why we have Google Places at all. The major search engines were unable to aggregate available web information to return reasonable listings of businesses within a local market. Heck there are wonderful local businesses in certain niches who do not even maintain a valid website (other than something cousin Johnny made as a school project). The powers that be at Google, Yahoo, Bing, and others have placed an importance, and therefore value, on ranking businesses with positive reviews.

    The real problem comes down to community. The reason eBay was so successful early on was because they were able to create a vibrant and active community that self monitored trust and quality for both buyers and sellers. The current review/ local placement arena has no community.

    The only company I personally see with any chance to create a viable self monitoring local review community could be Facebook. The problem there can be found in your client example… how many people really care to 1. review an insurance agent 2. make sure someone reviewing an insurance agent is a real customer.

    As you identify, reviews are a commodity. Google in their own recent changes has deemed them so. Unless Google develops a way to verify every single review is coming from a real client there will always be gamesmanship going on.

    As for companies selling reviews it ends up being completely transparent to end users which reviews are legit and which are not.

  3. @myself…. :) I meant I’ve known way too many companies submitting their own fake reviews (or reviews supposedly on behalf of their clients), not just reviews in general.

  4. OK, we have established that reviews can be valuable to a business but if it is less expensive or only slightly more expensive to do it correctly than to game, why would they insist on still gaming? It strikes me as an irrational business decision.

  5. Mike, I sent you the fiverr link a week or so ago :)

    I’m happy that the immature algo that was the local 7-pack, relying on citations and reviews, is no longer doing the job and the organic algo now does the heavy lifting. Since reviews no longer matter much for rankings, the commodifying of reviews should diminish, somewhat….maybe.

  6. One alternative is to penalize (suspend?) the listing of the business that hires the fake review company. The fear of getting dropped will slow down a lot of would be fakers.

  7. @Stever
    Thanks for refreshing an aging mind…. I will update accordingly

    It will be interesting to see what happens to these “positive only” review companies… and any review management company….

    While they may be algorythimically diminished, they still have the potential value of adding credibility.

    @Wes
    Maybe someone amongst the readers can enlighten us. :)

  8. @Ted
    Google creates a strange dialetic, first rewarding reviews, then when reviews start coming in due to Google’s own misplaced emphasis on using them for ranking they need to create a whole new system to manage them…. go figure.

    Mike

  9. Really good post, Mike. The number of bad practices we’ve seen growing up with Local over the past two years is both interesting and a shame at the same time. It’s fascinating how easily honest business owners who have put years of their life into running a business can be sidetracked from the straight and narrow by promises of Local glory. You know, I think I’m feeling inspired to blog about this. Thanks, so much, for the great reportage.

  10. Great topic that white hatters need to talk (and gripe about) more. Google and others need to be pressured into focusing on this as well; they most probably are behind the scenes.

    One thing I suspect is that Google will have to rank the worthiness of reviewers. They will have to come up with something like truth/trust rank for people. Maybe identify and use trust signals as they do with web pages?

    Actually, I’m paranoid that they’re already doing this with SEOs.

  11. @Miriam
    I am looking forward to the blog…. interestingly an SMBs long term interest as well as their expenses should tilt this process toward a campaign that elicits honest reviews… I know when I first got started the barrier to putting a review out there for a client was so low and there appeared to be no downside that I did a few for businesses where I had not actually made a purchase. Perhaps there is a logical fallacy when the barrier to entry is so low that if one is good a hundred must be better….

    @James
    google is aware of the problem, of that I am sure and some of the changes we have seen over the past month indicate that they are putting in place some tools to combat it…. the question for me is why do businesses behave in way that is both marketing wise and financially not necessarily in their best interest?

    Google suspicion of SEO’s has a history and a certain truth to it…. In the example above, I am reasonably convinced that it was the SEO that initiated and solicited the review process perhaps without owner knowledge of the full implications….maybe he wanted a “quick” success to show to his customer and didn’t think beyond the very short term implications of that success.

  12. What do you think is the threshold for positive reviews. In my line of work many use third party services to collect reviews from clients. It is very easy to accumulate hundreds of “certified” reviews, but many have experienced negative feedback due to the amount of reviews. As the normal consumer becomes more computer savvy are they going to see this as spam?

  13. The reason that people take this easier route of paid reviews is very much the same reasons people buy links. Instant gratification! The fact this can have guaranteed results whereas the other way is a complete crapshoot. I also think the positive review peeps will pick up on the fact that all positive w/high numbers makes the profile not look natural so look for a few negative reviews as well. Google does have a Social Element in their reviews see Hotpot which uses friends in determining the results.

    As to role of reviews in results…. these are a kind of “universal search” they always start at the top and work their way down or in the case of Realtime Search… almost entirely out of the results. This seems to be to take advantage of first link click bias therefore providing a lot of click analysis data quickly. was not surprised when these started to drop because many good local sites are not in Google Places.

  14. Hi Mike, great post and certainly fake reviews are bad for the whole industry. We all know what happened with web hosting reviews and would hate to see the local search industry follow that trend. At chatmeter, we’ve had to turn away customers who want us not to just help them monitor reviews, but create reviews on their behalf, which is not what we call a good reputation management strategy. As we monitor thousands of reviews across different sites, it’s pretty easy to tell which business are faking it. But I can assume it will take a long time for customers to catch on.

    Recent research has been saying that many consumers believe online reviews are nearly as reliable as word of mouth from someone they know. I assume this will peak out soon and consumers will lose faith over time. However, the impact will always be there. Furthermore, customers are much more likely to believe a bad review in my experience, which just reinforces why businesses need review monitoring and should try to respond immediately to resolve the issue. Many of our customers have reported a decline in business when bad reviews pop up. Unfortunately, it also very difficult to get happy customers to leave good reviews without a consistent review generation strategy. Which is why many businesses just want “instant gratification” as Terry mentioned. I don’t see this changing just because of rankings are not as affected as much. The actual review is very influential on consumers today, so this is likely to grow, despite what us good guys are trying to do.

  15. I would love to hear your thoughts on how to increase Place listings in other cities. I have clients that have an office location in one city/state, but provide services in other states. It seems impossible to appear in other states local listings when Google considers proximity as a factor. I understand Places is meant to be actual brick and mortar locations, but more and more it is becoming the new organic listing, especially now that they are breaking up the old 7-pack display model.

    Great post and great comments.

  16. The concept of rating small businesses by counting reviews is unworkable. The number of legitimate reviews for a small business will rarely be very high. It’s just too easy to game such systems. I’ve been saying this for years (it’s in one of my patents), but the Google Places debacle has made it clear that it’s painfully true.

    Reviews on sites that know little about the reviewer are worthless. Reviews from actual paying customers are worth something, as with eBay and Amazon. Reviews from deep social networking sites, where the user has a long history, might work. Facebook’s approach to “places” has a chance of working. Facebook has enough activity history on its users that phony Facebook accounts can be filtered out by statistical means. Facebook also can measure how influential someone is, and weight reviews accordingly.

    Facebook might end up as the winner in recommendation-based local search for this reason.

  17. @Jay
    There are geo limits that are hard to overcome without some sort of presence in the town that you are hoping to rank for.

    @John
    All of local search will move towards a model of trusted recommendations. Within that there will be high value reviews and low value reviews.

    Google is already culling out the really obviously bad ones and starting to add a more social element to their recommendations. They also have access to and are including your search history and actions into the process.

    There really are multiple components to providing the right answer in local and at the moment, despite some bad reviews at Google, I wouldn’t count them out of the game. At this point, they are one of the only search providers that is sending significant quantities of customers to businesses.

  18. A lot of Google Places marketing is just like trying to make a mark on Facebook. The “like” is definitely abused a lot on FB and so is the reviews on Google Places. Google Places is more prone as we saw in the now highly famous Bully-pulpit case. Well that was not exactly Local but how much long before we uncover any such issues?

    Again the big question, are reviews really that powerful? Our limited testing and implementations across a host of clients gives us a “plateau effect” which again leads to the assumption that with factors which are “internally controllable” (yes, I am assuming review generation is thought of as an internal business process) tend to help a bit and then their effect fades off. This is just like internal linking for routine SEO. With a lot of keyword focused internal anchor text, we have seen a negative effect too, we are yet to observe that with reviews and Local algorithms.

  19. Great post, Mike, I just blogged about it. I especially agree with Terry’s point about instant gratification – why work at something if you’ve got the money to just throw at it? Glad to see Google actively trying to clean things up, will be interesting to see how this plays out over time.

  20. Geo search is currently vulnerable to PO Box addresses … these give a lot of bang for the buck and make sense for a business in a large city whose major market is actually in the surrounding suburbs. Big G doesn’t seem to have made any allowances for that. I put a site together for a guy who was willing to drive 20 miles for a service call. That put 34 suburbs within range — we bought boxes in a half-dozen of the most lucrative locales.

    As a customer, I never look beyond the first half-dozen reviews. If ANY of them look spammy … bye-bye — that’s like catching your service mgr. in a lie before I get my car worked on — it’s a deal breaker. If you bought a 50-pack of comments, your money was wasted on me.

  21. Is it equally as bad to gather all of your customer’s feedback, then post to agency owned Google Accounts ONLY the positive reviews? Also, does it make sense to use your customer’s feedback as a Google Places “endorsement” if this intent is not disclosed to the customer who wrote the review? A company called ReviewBoost is doing this. The reviews are from actual customers, but posted under an account that does not belong to that actual customer and without that customer’s permission to use their comments as an endorsement.

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