Share with your friends










Submit

Analytics Magazine

Paying for online reviews backfires among socially influential

Online user reviews have become an essential tool for consumers who increasingly rely on them to evaluate products and services before purchase. The business models of online review platforms such as Yelp and TripAdvisor and e-commerce sites such as Amazon and Expedia critically depend on them. Should such sites pay users to encourage them to write reviews?

According to a forthcoming study in the INFORMS journal Marketing Science, a leading academic marketing journal, that is a bad idea. Paying users suppresses the number of reviews on social platforms, especially among those users who are socially well-connected and likely to be more influential.

The study, “Motivating User Generated Content: Social Connectedness Moderates the Effects of Monetary Rewards,” is authored by Yacheng Sun of University of Colorado and Tsinghua University, and Xiaojing Dong and Shelby McIntyre of Santa Clara University.

The authors examined user response from a sample of customers following the introduction of a monetary payment program for user reviews by a social shopping platform in China. The payment was roughly the equivalent of 25 cents per review in credit for purchases from sellers affiliated with the platform. To the company’s surprise, the number of user reviews declined by more than 30 percent in the month after the payment program was introduced, relative to the month before.

“The familiar ‘Law of Supply,’ that implies supply increases in response to higher prices, does not seem to hold true when it comes to paying for reviews on a social platform,” said Sun.

The paper explores why reviews drop in response to the monetary payments. The authors conjecture that the drop in reviews could be the result of community members’ concerns that their honest reviews – motivated by an intrinsic motive to either help others with relevant information or to present themselves as knowledgeable about the product or service – may now be interpreted by the community as simply driven by the less honorable extrinsic motivation of making money. If this were true, the drop in user reviews would be greater among users who had more friends on the social network, who could potentially misinterpret the user’s motivation for writing reviews.

The authors empirically test their conjecture by comparing the change in reviewing behavior among “socialites” (more than five friends on network) against “loners” (no friends on network) after the introduction of the payment scheme. Indeed, the reviews from socialites drop 85 percent, from just over 0.4 reviews a month to just under 0.06 reviews a month. In contrast, the loners who had little to lose in terms of social capital, increase their reviews from close to zero to about 0.03 per month. The increase in reviews from the loners, however, does little to offset the massive drop among the socialites, who are the heavy contributors overall. Hence the aggregate drop of 30 percent.

“Nobody wants to be seen as a paid shill for brands, so the users with more friends and followers, who were likely more influential and wrote more originally, are the ones who stop writing. A real double-whammy,” said Dong.

“Our results support the approach of industry leaders like Yelp or Amazon, who do not compensate for reviews. In fact, they tap into the intrinsic motive for social recognition through status badges for frequent contributors,” said McIntyre. “There may be still ‘under the radar’ ways to pay only the less socially active users for their reviews, but such targeting can be risky as the heavy reviewers may perceive it to be unfair and therefore stop writing reviews, if and when they learn about it.”

Marketing Science is a premier peer-reviewed scholarly marketing journal focused on research using quantitative approaches to study all aspects of the interface between consumers and firms. It is published by INFORMS, the leading international association for operations research and analytics professionals.

 

Related Posts

  • 75
    E-commerce platforms such as Uber and eBay, which link sellers and buyers, face the perennial dilemma of what is more lucrative, supporting the needs of the buyers or the sellers. The traditional belief has been that it is more important to focus on buyers, who create demand, than on sellers.…
    Tags: e-commerce, marketing, informs
  • 54
    FEATURES ABM and predictive lead scoring Account-based marketing, and the related technology of predictive lead scoring, is dramatically changing the face of sales and marketing. By Megan Lueders Software survey: joys, perils of statistics Trends, developments and what the past year of sports and politics taught us about variability and…
    Tags: marketing, science, informs
  • 54
    FEATURES ABM and predictive lead scoring Account-based marketing, and the related technology of predictive lead scoring, is dramatically changing the face of sales and marketing. By Megan Lueders Software Survey: Joys, perils of statistics Trends, developments and what the past year of sports and politics taught us about variability and…
    Tags: marketing, science, informs
  • 50
    Firms sharing social responsibility for the social good with customers is generally seen as a win-win – more patronage from socially responsible customers and larger benefits to society. A forthcoming study in the INFORMS journal of Marketing Science, a leading academic marketing journal, however, questions the premise. The study finds…
    Tags: social, marketing, science
  • 44
    The 39th Annual ISMS Marketing Science Conference will be held June 7-10 at the University of Southern California in Los Angeles. The ISMS Marketing Science Conference is an annual event that brings together leading marketing scholars, practitioners and policymakers with a shared interest in rigorous scientific research on marketing problems.…
    Tags: marketing, science

Analytics Blog

Electoral College put to the math test


With the campaign two months behind us and the inauguration of Donald Trump two days away, isn’t it time to put the 2016 U.S. presidential election to bed and focus on issues that have yet to be decided? Of course not.

Headlines

Holiday Retirement earns Edelman Award

Holiday Retirement won the 2017 Franz Edelman Award for Achievement in Operations Research and the Management Sciences from INFORMS for its use of operations research (O.R.) to improve the pricing model for its more than 300 senior living communities across the United States. Read more →

U.S. Air Force and Disney receive the 2017 INFORMS Prize

The U.S. Air Force and The Walt Disney Company both received the 2017 INFORMS Prize for their pioneering and enduring integration of operations research (O.R.) and analytics programs into their organizations. The prizes were presented at the INFORMS Conference on Business Analytics & Operations Research in April in Las Vegas. Read more →

Air Force Academy’s O.R. program saluted

The U.S. Air Force Academy won the 2017 UPS George D. Smith Prize for its operations research (O.R.) program, which prepares graduates to become frontline O.R. practitioners as analysts in the Air Force. The program exposes more than 50 percent of cadets to at least one O.R. course and provides cadets the opportunity to graduate with a Bachelor of Science degree in O.R. Read more →

UPCOMING ANALYTICS EVENTS

INFORMS-SPONSORED EVENTS

CONFERENCES

2017 INFORMS Healthcare Conference
July 26-28, 2017, Rotterdam, the Netherlands

CAP® EXAM SCHEDULE

CAP® Exam computer-based testing sites are available in 700 locations worldwide. Take the exam close to home and on your schedule:


 
For more information, go to 
https://www.certifiedanalytics.org.