New Delhi: Consumers' increased reliance on social media ratings and reviews will see enterprise spending on paid social media ratings and reviews increasing, making up 10 to 15 percent of all reviews by 2014, a study by research firm Gartner said Monday.
However, analysts predict that increased media attention on fake social media ratings and reviews will result in at least two Fortune 500 brands facing litigation from the US Federal Trade Commission (FTC) over the next two years.
"With over half of the internet's population on social networks, organisations are scrambling for new ways to build bigger follower bases, generate more hits on videos, garner more positive reviews than their competitors," Gartner senior research analyst Jenny Sussin said.
He further added that "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."
Gartner said organisations who opt to pay for phoney reviews have also faced monetary fines.
In 2009, the FTC determined that paying for positive reviews without disclosing that the reviewer had been compensated equates to deceptive advertising and would be prosecuted as such.
"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," Gartner vice president and analyst Ed Thompson said.
As the FTC begins to crack down on this practice, some reputation management companies have started identifying fake and defaming reviews and requesting the reviewers or host site remove them or face legal repercussions.
Gartner analysts said they expect a similar market of companies to emerge specialising in reputation defence versus reputation creation.