I didn't buy it, read it or see it....

When Monica Lewinsky wrote her tell-all memoir, online reviews started showing up on Amazon despite one small fact — the book had not yet being published.  One reviewer admitted to making up a positive review “out of thin air.” Surprisingly Amazon ended up pulling the fake reviews, but not without a spokesperson defending the company’s “open policy” for the way reviews are submitted.

Fast forward to today and Amazon should rethink their free-for-all policy. In a recent Techcrunch post, blogger Paul Carr points out how bogus, negative reviews are unfairly affecting authors’ new book releases.  Case in point: Michael Lewis’ latest book reflects more than 50% of reviewers giving only 1 star out of 5.  That would be fine ….if these “reviewers” had actually read the book.  Instead these “reviewers” have been quite open about their ax to grind, which evidently they believe is more important than the welfare of each hardworking author, who undoubtedly toiled to write and bring a new book to market.  What also is quite clear is Amazon’s support behind the bogus reviews underscores their financial conflict of interest.  Evidently, the online e-commerce giant is enabling these phony reviews because of one primary reason: they are Kindle customers.  Amazon has opened the floodgates of Kindle owners to post bogus reviews, which really amount to “collective bullying,” for the purpose of trying to strong-arm publishers to release a Kindle version simultaneously when the hardcover hits the shelves (never mind that the author and publisher would take a huge financial hit.) That’s like demanding Hollywood release a new movie, ie: Avatar, in DVD rental the same day it debuts at theaters. The fact that eBook owners are receiving a huge discount on having access to the book content digitally is no different than people who choose to wait for a movie to be released on DVD; they save money because they don’t have to spend full ticket price for seeing the movie immediately.

So Amazon’s revenues and Kindle owners’ satisfaction should take precedence over all?  The bogus reviews are negatively impacting countless authors who have nothing to do with Amazon’s distribution deals for its eBook product.  In effect, Amazon is duplicitously enabling collective bullying by Kindle owners against authors by pummeling them with poor reviews from people who have never ordered the book, much less read it. The phony reviews harm each book’s overall rating and undoubtedly hurt each author’s personal pocketbook.

Amazon could easily implement measures to provide reviews that are void of bogus opinions as much as possible (see an earlier Ignite post making this argument).  The company could easily segregate bogus reviews from people who never purchased the book through Amazon.com, while ensuring customers can indeed rely on genuine reviews from people who have actually purchased and read a book. Maybe Amazon should introduce 2 different rating systems: a star rating for bona fide readers of a book posting a real review and an ax rating for all others who have another gripe, dislike the author’s viewpoints, politics, gender, etc.  In the Techcrunch post, some complained that if they rent a book from the library, they should still be allowed to post a review on Amazon. They could consider posting a tweet or note elsewhere about their opinion of the book. However, in the interest of keeping online reviews genuine, we believe that this smaller majority should not take priority over ensuring Amazon’s online reviews can be trusted.

Consider the impact online reviews are having on consumers:

• More than half of consumer adults said reviews affect their online transactions, as reported by Harris Interactive.
• Deloitte found 53% use social media to research potential gift ideas.  Put into Lewis’ perspective, gift givers unfamiliar with his work who may just glance at the overall rating of his new book may opt to purchase another title.

As such, vendors that enable online reviews should aim for bona fide, trusty-worthy feedback and recommendations.  The notion of genuine online reviews has once again come into question with Yelp under fire for purportedly having its own staff pad the service with questionable reviews.  TripAdvisor also suffers because the company offers no safeguards, enabling anyone (hoteliers, restaurateurs, etc.) to post reviews—good, bad and ugly.

It is awfully refreshing when you can find vendors that are approaching trusted reviews in a smart way.  Ignite client Zicasso, an online travel site that connects discerning travelers with pre-screened, select travel specialists, is the only online travel site that provides a trusted rating & review systems. Only travelers who have purchased and completed travel using @Zicasso, can post a rating or a review about their trip, on-the-ground travel experts used, hotels, sites visited, etc. The company also imposes strict criteria (3.5 out of 5 stars) that their travel partners have to maintain in order to remain in Zicasso’s trusted network.  This is a great example that qualifying reviews can be done without manipulating the integrity of the review itself.

How do you weigh in on online reviews?

In this month’s issue of Fast Company, there is an interesting article highlighting why Portland, OR is fast becoming a tech startup hot spot.  We’re not surprised as we’ve taken notice of this last summer.  Wedged between Silicon Valley and Seattle, Portland is increasingly becoming a magnet for entrepreneurs to lay down roots and set up shop.

Portland attracting tech entrepreneurs

Portland offers affordable living, an abundance of outdoors activities, college and professional sports, and within the last few years has earned a new nickname, “Beertown” for its 28 local breweries, which also helped spawn the country’s microbrew revolution.  Full Sail Brewing pint aside, entrepreneurs can also tap into added benefits that Portland has to offer, including a new $500,000 seed fund to incubate startups and small businesses, a DIY mentality that churns out scrappy can-do entrepreneurs, a growing talent pool of engineers and developers to draw from, and with nearly 10 colleges and universities, Portland is home to a young, smart and energetic demographic.  The city’s attributes have not gone unnoticed; here’s a list of different accolades it has racked up recently.

One Ignite client, open source data automation company Reductive Labs (since renamed Puppet Labs), pulled up stakes from Nashville, TN to drop anchor and call Portland home base.  The company wanted to take advantage of the area’s strong roots in the open source movement (Ubuntu started here).  Another Portand-based client, mobile app infrastructure startup, Urban Airship recently landed its Series A funding.

And while it certainly rains a lot in Portland, it’s increasingly raining apps — mobile app development more specifically.  Portland is also drawing in mobile app and smartphone developers of all flavors; in particular iPhone and Android app developers are proliferating.  With the proliferation of mobile app stores and new devices, such as the Kindle and iPad, the market for mobile app developers has never been rosier.  Mobile app developers are no longer at the mercy of having to win over the approval of some big handset manufacturer or wireless carrier. Because the industry has opened up considerably, VCs are once again bullish in the mobile/wireless arena, spurring Portland’s swing from tech manufacturing more toward mobile software development.  Given the predictions of smartphones and mobile app consumption over the next few years, the outlook for this region holds a lot of promise.

New York is seeing a strong tech renaissance, as is Austin. What other regions outside of Silicon Valley are you seeing emerge as a budding tech scene, SoCal, Atlanta, where else?

In today’s age of transparency and real-time communication, why do so many small businesses still shy away from social media?  Not only is it a viable communication channel, it is the de rigueur way that people communicate.  Most have migrated to consume information, exchange perspectives, discover companies, seek services, check out product reviews, and they use a broad spectrum of social media channels including Facebook, Twitter, Delicious, Digg, YouTube, etc.

SMBs are supposed to be lean, mean and nimble, so what gives? The irony here is that Fortune 500s have jumped in with both feet to harness social media, leaving their smaller counterparts to continue relying on traditional media channels. According to a report conducted by the Society for New Communications Research titled, “The Fortune 500 and Social Media: A Longitudinal Study of Blogging and Twitter Usage by America’s Largest Companies,” Twitter was the social media channel of choice last year.  The report found a 300% increase from 2008 to 2009 in the number of Fortune 500s linking their corporate blogs to corporate Twitter accounts.

In his recent post titled, “The Socialization of Small Business,” Brian Solis cites two major hurdles of social media for 31% of small businesses.  Many believe that their customers are not hanging out on social media channels, and that as business owners, they do not have the time or resources to throw at running a successful media campaign.  Ad-ology’s report titled, “Small Business Marketing Forecast” had some interesting findings, including approximately 50% of SMBs ranked generating leads, monitoring what is being said about their business, and improving customer service as — “not beneficial.”

Being on the PR side, we recommend and work with a lot of our startup clients around building efforts to integrate social media with traditional PR and communication channels.  In some cases, it is an ongoing struggle, because some clients are digging their heels in, believing otherwise.

One SMB client of Ignite’s believes that their customer base is not hanging out in Twitter, and therefore, this channel is irrelevant to their business. With a quick real-time search in Twitter, Ignite found on the first page of results that included two tweets from prospects revealing interest and seeking recommendations for the type of service our client offered, one blogger mentioning our client in a very positive manner, and one competitor trash-talking our client. None of these tweets were related to each other.  Despite this snapshot evidence, our client still isn’t convinced. Ignite even proactively secured the client’s Twitter handles so that they wouldn’t be taken. But by choosing to refrain from adopting social media channels, we can see how this apprehension has impacted our client vis-à-vis its competitors.  Our client’s biggest and smallest competitors have essentially left them in the dust with respect to actively participating with communities in social media channels and having a much stronger market presence.

The road to social media will be a slower route for the SMBs likely for a range of valid reasons: time, unfamiliarity, professional network not as tech savvy, trust, etc.  We’d recommend Twitter as a good first step. It’s free, easy to learn, and isn’t as taxing on entrepreneurs.  Any small business, mom and pop, or neighborhood shop could use Twitter to gain more customers at hyper-local level by offering tips, best practices, coupons, promos, etc. According to a Twitter Brand Survey done by Peter Sorgenfrei and Warren Sukernek, 60% of respondents said they would recommend a brand based on their presence on and usage of Twitter. What’s more, 78% of respondents said they’d be more willing to purchase products from a company that had a relationship with them on Twitter.

Edelman’s annual “Trust Barometer 2010” report says we are no longer living in a shareholders’ world but are instead in a world where all stakeholders are of equal importance.  Meaning, companies need to do more now than ever to actively employ a mixed bag of communication channels to stay on top of not just investors and prospects — but all stakeholders.

As they say, the power to define and control a brand has indeed shifted from corporations and institutions to individuals and communities.  So whether you like it or not, whether you’re prepared to engage with constituents who have migrated to social media channels, or whether you choose to stay on the sidelines, do know that people are defining and controlling companies’ brands and perceptions and that includes yours.