Deception in online reviews: a bigger issue than we might have thought — Duncan Simester

MIT Sloan Prof. Duncan Simester

Online companies are already struggling to deal with “cyber-shilling,” where people or companies are paid to post negative or positive reviews about products or services. But new research suggests that the problem could be much larger than we might expect. We find evidence that some of the people writing reviews on the website of a prominent private label apparel company have never purchased the products they are reviewing.

That firm’s web site generates hundreds of thousands of product reviews. We found that about 5 percent of those reviews were by customers for whom there was no record of actually purchasing the item. Notably, these reviews were significantly more negative than the remaining 95 percent of the reviews, which were posted by customers who were known to have purchased the item. We are also able to replicate the effect using book reviews at Amazon.com.

We show that these reviews were not the result of strategic actions by firms seeking to boost their image or to damage that of their competitors by “planting” fake reviews.  Instead, they were posted by thousands of real customers with no apparent financial incentive to write them.

Very few customers write reviews. They are written by less than 2% of this firm’s customers, while reviews without prior transactions are contributed by just 6% of these reviewers.  This suggests that the phenomenon occurs in the extreme tail of the customer distribution.   Moreover, these customers are not representative of other customers.  They purchase many more items, they are more likely to buy at a discount, they are more likely to return items, and are much more likely to purchase new or niche items.  Unfortunately they are also influential.  Their low ratings result in significantly less demand for the products that they review.  This loss of demand persists for at least 12 months.

We are not sure why apparently loyal customers post negative reviews about products they have never purchased. One reason may be that they are acting as self-appointed brand managers. They like the company, but when they see it selling a product or doing something else they don’t approve of, they post the reviews as a way to give feedback to the company, even on products they have not purchased.  An alternative explanation is that the negative reviewers seek to enhance their perceived social status by raising their on-line stature by posting with great frequency or detail.

These findings suggest that the phenomenon of deceptive reviews may be far more prevalent than we had thought and may now extend to individual customers who have no financial incentives to write counterfeit reviews. If this is true, the scale of the problem is increased enormously. This will be particularly worrying for firms such as TripAdvisor or Yelp, who are currently unable to link reviews to customer transactions.

Duncan Simester is the Nanyang Technological University Professor and a Professor of Marketing at the MIT Sloan School of Management.

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