Research by Igniyte has been featured in a comprehensive report by the Competition and Markets Authority (CMA). The ‘online reviews and endorsements’ report outlines the difficulties of the current online review system. Here’s a full summary of the report and the next steps that will be taken by the authority.
Igniyte was pleased to provide research to the CMA’s investigation and participate in a committee meeting. The statistics from Igniyte’s Reputation Report were used in the CMA’s report to demonstrate the detrimental effect of unsubstantiated negative online reviews.
The Reputation Report surveyed 500 UK business owners and higher decision makers. It found that businesses were suffering an average loss of £46,815 because of damaging content online. According to our latest Business of Reviews research, we also found that 51% of UK companies surveyed had been hit by unfounded criticism and malicious postings, or targeted by trolls in the past year.
One in five UK businesses are now spending up to £30,000 per year in an attempt to deal with negative online reviews, with no guarantee that their efforts will be successful long term; and the cost of dealing with online reviews is predicted to rise.
Key findings of the ‘online reviews and endorsements’ report
The CMA report finds that around £23 billion a year of UK spending is influenced by reviews, with users finding them beneficial in some way. Most customers say that their opinion of the product or service is usually in line with what the reviews had initially said.
- Developments – some sites are developing systems to detect and verify fake reviews. Those which are likely to be helpful are given greater prominence on those sites, with users able to flag suspicious reviews themselves. More and more jobs are being created for people who manage reviews on behalf of companies.
- Bad practice – some businesses and websites have been found to be publishing fake positive reviews to boost their reputation ahead of competitors, misleading customers.
- Endorsements – where companies are ‘paying for’ endorsements, for example on blog sites, the practice is not always clear stated. This is making people’s decisions distorted and creating a lack of transparency in the review system. It is estimated that around 6% of people who read vlogs would make a decision based on them, and trust the information given. It is important that these vlogs clearly state that they have been paid for by the company.
- ‘Cherrypicking’ – companies pick and choose which reviews to upload, only picking the ones that show their products or services in a positive light. Businesses who do not engage in this behaviour are found to be struggling to compete with those who are ‘unfairly’ gaining the benefits.
- Moderation – allows businesses to hide a negative complaint and deal with it offline – while it is good that businesses deal with the problem swiftly and effectively, it’s important that wider consumers get a better picture of the spectrum of the reviews submitted.
Such practices are at risk of breaching the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and the UK Advertising Codes. Amazon is one website which is clamping down on customer feedback which could be false – positive or negative. The other criticism is that they may also play a part in preventing consumers from making informed decisions on their preferred products and services.
The value of online reviews is growing – most people now read reviews of a product before making a purchase. Reviews help people make quicker, more informed decisions on products and services. It is a way for companies to compete in the market and grow their reputation. And with reputation often at the forefront of a business’s success, it is important that how a company is presented online is as accurate and fair as possible.
The CMA’s commitment
The report says: “The CMA is committed to maintain consumers’ trust in online reviews and endorsements. We therefore plan to continue to work with our consumer enforcement partners… to help these sectors evolve in ways that benefit consumers and businesses.”
The CMA will be investigating various review sites and penalising those who do not abide by the laws and regulations. Celebrities and bloggers have previously been criticised for endorsing products online without making it clear that they are being paid to do so.
Response to the CMA report
Igniyte’s policies and practices are in keeping with the CMA report’s finding. We believe that a business’s online reputation is incredibly important for the long-term future of a company. We are committed to helping businesses maintain their credibility and professional image online. We provide guidance and support to companies and brands who have been targeted by malicious reviews or have experienced trolling.
TripAdvisor, one of the most commonly-used review sites, responded to the report by saying: “We welcome the CMA’s report and its recommendations which are in line with our own policies to protect the integrity of our online reviews – which have been in place at TripAdvisor for years.”
The consumer group Which? were also supportive. They said: “The CMA was right to launch this investigation as consumers rely on reviews to make decisions, so it is critical that they are genuine.
“Retailers should be vigilant and try to root out bad practice on their sites, and consumers should check a number of difference sources, including independent experts.”
If the investigation is able to fish out all of the bad practices and reward those who are being fair, then there will be a better balance for the review system and it will be easier to manage in the long-term.
The CMA’s recommendations
The report recommends:
- Businesses should not pose as a customer and write a fake review
- Review advertising and paid promotions should be transparent
- Review sites should be clear about how the reviews are collected and checked
- All reviews should be published
- Where reviews are edited for swearing or defamatory comments this should be clearly stated
- Review and response strategies should be prompt, while any commercial relationship or promotion should be clearly stated.
In general, it is advised that companies should have a transparent review strategy and should not seek to establish a reputation online that misleads consumers, positively or negatively.
How Igniyte helps customers
At Igniyte, we advise that companies refrain from engaging in practises such as ‘paying for reviews’. Placing unsubstantiated content doesn’t fix real business issues in the long term – it simply masks them, so it is worth listening to the negative comments and ensure you address the issues at hand.
We work with businesses of all sizes to create strong online reputations that can withstand this type of unjustified content. We work closely with legal teams, if necessary or appropriate, to challenge and remove content on behalf of companies and individuals, as well as build a positive response strategy for the long-term.
If you’d like further advice on how to ensure your review strategy isn’t in breach of the CPRs above and misleading consumers; get in touch with Caroline Skipsey on +44 (0) 203 542 8688 or at [email protected].