This is the eleventh installment of our Deep Dive into Local series. For the week ending 11/6/15, David Mihm, Mary Bowling and Mike Blumenthal shared their thoughts about the previous week in local. The complete video is posted in the Local U forums (paywall). In the second half of that video, they take a deeper strategic and tactical dive into one interesting area that caught their attention during the week. In this discussion they look at review incentives from Google as part of their Local Guide program as well as whether a business should ever use incentives in their own review program.
Mary: We're going to move into our deep, deep dive when we're going to talk about the incentivization of reviews.
Mike: So could you, Mary, just take a moment and explain in greater detail the Google program or what you know about it.
Mary: Well, what they did is they sent out an email saying we're going to have a contest. Whoever posts the largest quantity of reviews is going to be the winner of this contest, and they're going to get some kind of prize. I think it was from Travelzoo, some credits with Travelzoo.
Mike: I think it was a $300 credit. It wasn't insignificant, although given that they have 5 or 10,000 local guides, obviously the chances of winning are quite small, kind of like the lotto, right?
Mike: And it's interesting. It's quantity over quality. It's not like the review had to at least be a certain length. Just reviews, is that the criteria?
Mary: That's what I saw in the email that I read, that they're looking for quantity. Of course they did mention that they wanted quality reviews, but the contest is apparently based on quantity not quality. I find this to be a really conflicting message, because small business owners who are desperate for reviews are being told you cannot hold contests in order to get more reviews, while they're seeing Google doing this exact same thing. I know Mike you had some thoughts on that.
David: Before Mike you get into your thoughts, I just want to say one thing. I think you undersold the shock value for me that Google was partnering with anyone on this review contest and they were partnering with Travelzoo, which is at least...I perceive them as a second rate travel site behind Kayak and TripAdvisor and that sort of thing. So it may be that they couldn't get an A list player because of all the stuff going on with the antitrust suit in Europe and that sort of thing. So I thought that was interesting on a number of levels. Go ahead, Mike.
Mike: Yeah, no, I think that's exactly right. They can't. TripAdvisor is essentially suing them, right?
Mike: It's a question...it's a nuanced question for sure. I think probably you're right, probably not totally honest to small businesses. But contests clearly fall into the arena for a small business of the truth in advertising laws. It's both against the terms of service at Google and TripAdvisor. While Yelp doesn't mention it explicitly, they do punish it with a red label and they certainly prohibit it. They explicitly note any solicitation of reviews is against their guidelines.
So the issue is a subtle one, that a business can not be using any type of monetary incentive, even as remote as a contest, to encourage clients or customers to leave them reviews as it sniffs of a conflict...it smells like a conflict of interest. The monetization of that process in any form leads to an obvious conflict of interest.
And the FTC has been clear that it's against their guidelines. Google's been as clear as Google ever is that it's against their guidelines. And certainly TripAdvisor has been explicit that it's against their guidelines. They actually write it up in their guidelines that it's against the rules. It's in violation of most TOS's that I know of.
The bigger issue is always that it is against the law. So the question is what is Google doing in terms of incenting their free workers essentially, their gig economy workers. Google has a great take on the gig economy workers, right? Work for free.
Mike: It's better than Uber. Uber just screws them. Google really screws them, right?
Mike: For working for free, you have a chance to earn $300, but it's a contest with 10,000 other people and you've got to write more reviews than the next guy. That's got to work out to about 25 cents an hour, right?
Mary: And some of the things that...you could see that the Local Guides program is pretty much like the Yelp Elite program where they're trying to crowdsource local opinions about different businesses that...
Mike: From people who like to write reviews.
Mary: From people who like to write reviews. The one that shocks me is the whole MapMaker thing where they have managed to get all of those people to do what I perceive is much more difficult work for free.
Mary: That's the one that just really shocks me, and the fact that Google relies upon free workers to get valuable information or information that should be valuable. I know just from some of the chat groups I'm in that a lot of people become MapMakers because they want to influence what happens on MapMaker, which seems like a terrible conflict to me between ground truth and influence.
Mike: Yes, and the whole top contributor program has a certain element of that. That people work out of their self interest. I've been a top contributor in Google Local since 2007. I did it originally because I was able to learn a great deal. Now it does give me the ability to report bugs and have them look at bugs and that sort of thing.
So yeah, it's a very strange part of modern economy that companies are relying on crowd sourcing to do critical business tasks. In the case of Google, they're getting information about bugs. In Local almost every bug that gets reported comes somehow either through the forum or through my blog or through Linda's forum. And that stuff gets funneled right back up to Google and Google doesn't even know that these bugs exist. They didn't, and they get reported. It's a first line of defense against bugs and against problems, and it's a line of defense against support. It's incredible to me.
Mary: I know, and it seems like terribly valuable work in a lot of cases that people are willing to do for free for one of the biggest and most profitable companies in the world.
Mike: Yeah, it's very strange, very strange. Last week I did write an article at GetFiveStars on the role of incentivizing reviews. Interestingly, back to this point about small businesses being confused, I thought the article was quite clear that it's against the terms of service and it's against the Federal Trade Communication's guidelines, not just direct incentives but contests as well. As soon as I got done writing the article and it got shared pretty widely on social media, at least two people reached out to me and said what about contests. Clearly, small businesses don't get this idea that incenting is bad in whatever form. Again, I don't know about bad.
The issue here, it's always a business decision. We live in capitalism. The question becomes is it immoral or unethical. That's one question. That's different from is there a case that's going to cost you money. That's the other decision, right? And I think the problem here is that enforcement has been so erratic that it could cost people money, but the likelihood of enforcement is quite low so people continue to do it.
The problem is when you do get caught, like in New York state. I had a client who was giving out coupons, it wasn't my suggestion, giving out coupons for teeth whitening to anybody who left a review. It didn't matter if the review was good or bad. He got a $10,000 fine. His response was, well...
David: Not worth it.
Mike: Well, it might've been worth it, but he decided to stop doing it because defending himself against it was...
David: Oh. I would've paid the $10,000 fine for a guy who's probably spending $50,000 a year on marketing. That's totally worth it to me.
Mike: That could be.
Mike: That comes back to this business decision. He thought it was cheaper to pay the fine than to defend...to try to defend himself.
David: Absolutely, yeah. If he got 100 reviews for $10,000 then in that highly competitive market, its probably worth it.
Mike: It was New York City. It was very competitive marketing, teeth whitening, right?
Mike: You're probably right. It probably was a reasonable economic choice. And that's reality.
Mary: Coupons were getting spread around, too, attracting new customers.
Mike: Right, exactly, yeah. There's an economic argument. And the question is what is the risk. Well, the risk is public shaming. The risk in the case of Yelp and TripAdvisor, they will actually put big red banners on your thing if you get caught. I don't know how long those last. Those are manual penalties. And you always run the risk, like in the Union guest house place, you run the risk of incurring the wrath...
David: Well, hang on.
David: That wasn't incentivizing.
Mike: It wasn't incentivizing...
David: That was strong arming...
Mike:I was disincentivizing. You always run that risk in this world of crossing a line where the social hordes think you violated some principal and they're going to nail you, right?
Mike: So there's always that risk. So the question is are these risks worth the rewards.
David: Why aren't the social hordes up in arms about the Google program, then, and choosing to visit another more independent review site?
Mike: Good question.
David: Hard question.
Mary: Yeah, really.
David: This is why I don't...Nine times out of ten when I'm in a different city, I can't use Yelp because I know that the businesses that are ranking well have just been reviewed by the Yelp Elite. Generally the Yelp Elite and I do not see eye to eye on what businesses we'd recommend. so I think we as consumers have to vote with our pocketbooks on which review sites we use. And if Google continues to do this, and especially if Facebook develops a real local app, I see myself switching pretty quickly away from Google to something that is much more actually crowdsourced rather than astroturfed.
Mike: You're not snarky enough to be a Yelp Elite, David.
David: That's true, I'm not. I'm also not cool enough for most people.
Mike: I think you're pretty cool. But then again, that's me. I'm not sure I'd wear that badge proudly, David.
David: You're saying that's a low bar? Or what?
Mike: I'm saying I'm not always of the best judgment in these matters of what's cool and what isn't in current society. I've been accused of being out of touch.
Mike: Right with that, I think we will end the deep dive before we get any deeper. Thank you, David. Thank you, Mary.
David: Sounds good. Thanks for listening, everybody.
Mary: Thank you.