User reviews: The best advertising money can buy?

Shopping online offers many conveniences: more information about a product than you might get at a physical store, easy side-by-side comparison of products that might not be on the same storeroom floor. But perhaps the most important difference is being able to read what other customers have to say about their experience with a particular product before you buy. Finding out that an item breaks easily or doesn’t come as pictured is valuable information, and I’ve often purchased products I had been on the fence about until I had read a consumer’s rave review.

Those reviews, written by regular folks, are strong sales materials. I once saw a study that said they rank right up there with personal recommendations from friends — trumping editorial reviews and advertising by quite a hefty margin when it comes to influencing our buying habits.

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You might think word-of-mouth recommendations are the best kind of advertising money can’t buy, but you’d be wrong. As it turns out, advertisers have been buying it.

Cynics here would not be surprised to find that some percentage of the customer reviews we see on the Web are written by people who are paid to tout those goods. There are the obvious plants, like those lame attempts to “endorse” diet aids by people who are obviously trying to hawk it to you. And then there are institutionalized marketing efforts intended to disarm consumers and use the power of the user review against them. Here, the FTC is on the case.

The FTC recently issued a release that included the following statement:

A public relations agency hired by video game developers will settle Federal Trade Commission charges that it engaged in deceptive advertising by having employees pose as ordinary consumers posting game reviews at the online iTunes store, and not disclosing that the reviews came from paid employees working on behalf of the developers.

The PR firm in question is Reverb Communications, and it represents some pretty big clients in this space.

According to MobileCrunch, which posted an excerpt of a memo (and did a fair amount of legwork tracking down the reviews on iTunes and connecting them to Reverb’s clients) sent to prospective clients, the PR firm had a process in place where interns were instructed to write reviews “from the point of view” of various age groups and demographics as part of the company’s efforts to promote games and mobile gaming apps. Reverb was apparently promising clients that positive but not over-the-top reviews “pre-written by in-house writers” would begin to go live when the company’s games launched and would continue for 14 days after launch. One prospective client balked at the dishonesty and, instead of signing, sent the memo to MobileCrunch.

According to the FTC statement, between November 2008 and May 2009, Reverb posted reviews about its clients’ apps in the iTunes store. This might have been OK if reviewers had mentioned that they were in the employ of a firm tasked with promoting these games, but that’s not what these folks were doing. According to the FTC, they were using account names that gave the impression they were disinterested customers.

“Advertisers should not pass themselves off as ordinary consumers touting a product, and endorsers should make it clear when they have financial connections to sellers,” Mary Engle, director of the FTC’s Division of Advertising Practices, said in the announcement.

Under the settlement, Reverb Communications had to remove the offending reviews. Reverb did not respond to my email but told CNET, in an emailed statement, that it disagrees with the FTC but settled to avoid the costs of disputing the charges. Reverb owner Tracie Snitker told CNET that the matter was frivolous.

I think the FTC has its work cut out for it when it comes to enforcing rules around paid reviews. But I’m glad someone is taking it on. Especially when it comes to quick purchases of mobile apps, I rely on user reviews and I’d like to believe that I could take them with just the usual dose of salt and not add to that the assumption that these might just be unlabeled ads.

Got gripes? Send them to christina_tynan-wood@infoworld.com.

This story, “User reviews: The best advertising money can buy?,” was originally published at InfoWorld.com. Read more of Christina Tynan-Wood’s Gripe Line blog at InfoWorld.com.