Reputations at stake, companies try to alter word of mouth online

By Michael S. Rosenwald
Washington Post Staff Writer
Monday, March 29, 2010; A01

It didn't take long for Julie Liu -- late 20s, smartphone-addicted, constant Googler -- to get hooked on the online review site Yelp. Where to eat Friday night? Read some reviews by random anonymous diners. Oh, that looks good. Book a table online, show up, eat.

But after Liu and her sister opened Scion restaurant in Dupont Circle, they saw Yelp from a different angle. Liu said Yelp's salespeople phoned repeatedly, telling her that if she advertised on the site, negative reviews would move lower on Scion's page and positive reviews would move up.

Liu decided to fight back, joining nine other businesses this month in a class-action lawsuit against Yelp alleging similar tactics -- claims that Yelp executives deny. "Yelp does not manipulate content on behalf of advertisers or penalize those who don't advertise," a spokesman said.

The case raises questions not just about a site with 10 million reviews, but also about whether the booming economy of online reviews and product recommendations by everyday folks on Web sites and social networks is anything but what meets the eye.

What appears at first to be a spin-free, grass-roots marketplace of opinions and recommendations is rapidly turning into a hotly contested battleground where public relations firms and a new breed of imagemakers help businesses counter negative online comments and manage their online reputations -- even giving people free products in hopes of generating positive comments.

Companies including NBC, Sony and Microsoft partner with such firms as, paying individual Twitter users to allow commentary about products in their Twitter feeds. The posts are marked as ads in parentheses but look like regular tweets about what one had for lunch.

Some Web sites offer cash for reviews. For $2.50 each, says, "You could review anything around you including: any products, hi-end technics, companies, hotels, politics, cities, stores on your street, or even your neighbor's pets!"

PR companies track people who post negative comments about everything from pizza to gadgets and then offer those naysayers free products or technical support, hoping to reverse the flow of opinion about their clients' goods. Many start-ups sell online tools that scrutinize Twitter and Facebook to rank users' online influence, helping manufacturers, hoteliers, restaurateurs and PR firms figure out who can best spread messages quickly.

"It is critical for us to understand who is important," said Jonny Bentwood, an Edelman PR executive who created a Twitter scoring system called Tweet Level. "We want to understand who the key influencers are, what they are saying and what their impact is."

Online ads unpredictable

In olden days -- like 10 years ago -- companies big and small reached consumers through mass-marketing campaigns, interrupting magazine articles, TV shows or music on the radio with clever ads. Technologies such as TiVo, satellite radio and iPods (and iPhones and soon iPads) have reduced advertisers' opportunities to break into consumers' media usage. The prospects for online advertising are uncertain: More than 40 percent of surfers don't click on ads, according to a Pew Research Center study.

Online, the authority once vested in journalists and advertisers is often granted to total strangers: Seventy percent of Internet users trust online recommendations and reviews, according to a Nielsen study. "People are tired of traditional ad messages, and they feel that connecting with other consumers is more helpful," said Chris Dellarocas, a Boston University management professor who studies online comments. "It's more fun. Consumers love to interact."

Although consumers no doubt still get tips about new restaurants and businesses in old-fashioned ways -- at the office or kids' soccer games or on e-mail discussion groups -- marketers are focusing their energy on changing the word of mouth on the Web. Digital word-of-mouth marketing -- a new twist on a sales method that's sold stuff since long before the invention of the printing press -- is expected to top $3 billion a year by 2013. That explains why Google reportedly tried to buy Yelp last year for $550 million and why Yelp felt confident enough to essentially say, "No, thanks. We'll be worth even more later."

And all of that explains why an Arlington County company named New Media Strategies reached out last year to a popular Brooklyn blogger named Aly Walansky. Founded 11 years ago by former political pollster Pete Snyder, NMS was one of the earliest digital PR firms to focus on word of mouth. NMS employees, most in their late 20s or early 30s, sit wired and caffeinated in a newsroom-like setting, tapping away at computers with double monitors to contact bloggers and Tweeters so they can offer everything from behind-the-scenes access to clients to free stuff. NMS represents, among other corporate giants, Chrysler, NBC, Intel, Sony Pictures and Domino's.

Last year, Domino's launched a new recipe for its pizza. To help the company, NMS identified hundreds of bloggers who influence what people eat and offered many of them coupons so they could try the new pizza for free. Snyder says there was no quid pro quo: Bloggers could say whatever they wanted about the product. Walansky, who often reviews food and beauty products, liked the new recipe -- as did almost every blogger the company contacted. NMS also offered Walansky a Domino's gift card so she could run a giveaway contest on her blog.

"To all my pizza lovers out there: Domino's has a new pizza recipe, and it's delicious!" Walansky wrote on her blog. "Everything has been upgraded -- the dough, the sauce, even the cheese, and we are grateful." Walansky's endorsement and contest got nearly 200 readers to add their own comments.

Disclosure guidelines

The Federal Trade Commission released guidelines last year about online product recommendations, saying that bloggers should disclose any connections to companies they write about. Walansky's giveaway included no such disclaimer. She said in an interview that such notice was not necessary because the free gift card made the connection to Domino's obvious.

Snyder said NMS "explicitly requests that the blogger disclose" any connection to a client's product.

NMS employees have posted offers from client companies on Twitter. But although NMS lists its employees and links to their Twitter accounts on its Web site, some tweets appear without any indication that the author is promoting clients. One employee recently posted on his Twitter account an offer to win a free Jeep: "RT @NMSosphere Win a #Jeep Wrangler Islander via Twitter!" To discern the connection between the tweeter and Jeep, a reader would have to find a news release on the NMS site announcing that the firm represents Chrysler, which makes Jeep trucks.

Snyder said that if "even 0.05 percent" of 150,000 tweets by his employees in the past year "failed to disclose a client interest, that's simply not good enough."

NMS says it follows ethical guidelines set by the FTC and the Word of Mouth Marketing Association. "Never have we lived in a more transparent society," Snyder said. "Everything we put out there is verifiable, and it is truthful."

"There has always been a risk of manipulation online," said Pete Blackshaw, co-founder of the Word of Mouth Marketing Association and an executive at the Nielsen ratings company. "This is a huge concern for a lot of people."

NMS is far from alone. Dozens of companies, with names like BzzAgent, Brickfish and Ammo Marketing, offer to help shape the online conversation. The Zocalo Group, in Chicago, categorizes commenters as "hear-MEs," "reputation terrorists" or "competitive destroyers." On its site, Zocalo promises to "relentlessly monitor online conversations to ensure your brand is talked about in the right ways." When it's not, the firm jumps into the conversation or recruits supporters to "go to bat for you."

Paul Rand, Zocalo's president, said: "What every brand is trying to get to is this: How do I become engaged with my consumers and my influencers in a way that hopefully secures me at an ongoing level and blocks out my competitors?"

Researchers who study online recommendations say most consumers don't realize that marketing firms are working to influence what they read online. Nor do they realize, unless they read some fine print, that sites such as Yelp let businesses that advertise on the site list their favorite review first, regardless of how recently that comment was posted. Only after clicking a blue link above the review would a user see this disclaimer: "Yelp sponsors can highlight one of their favorite reviews at the top of their business page."

Said Blackshaw, the Neilsen executive: "Any instance where there's a high likelihood of consumer confusion regarding who's behind the message is problematic. If discovered, it erodes trust, and trust is the currency of effective advertising."

Even when there is clear disclosure -- or perhaps because of it -- there can be unintended consequences.

A Zocalo employee, attempting to clear up misunderstandings about Cricket Wireless coverage in the Charlotte area, recently jumped into a conversation on a popular discussion board. He signed his note, "Best, Ryan, on behalf of Cricket." In response, "djiim" wrote: "Is this a prank? Seriously?" The next poster, "nTranced," wrote, "Great, now [Cricket's] goons are on here snooping around."

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