Are 5-star online reviews really the best ones?

It would seem that the more top ratings a company or product can receive in online reviews, the better it would be for their business.

As it turns out, this isn’t exactly the case. A recent national study has concluded that businesses earning star-ratings averaging between 3.5 and 4.5 on a five-point scale earn more revenues annually than those with other ratings – higher or lower.

And even more surprising, top-rated businesses with five stars actually earn less in revenues than those whose customer ratings are two stars or lower.

What’s going on here?

It would seem that five-star ratings are considered “too good to be true.”  Seeing them, people tend to think something’s fishy about how the ratings can be so high. And if there’s something worse than getting low ratings, it’s the feeling that the ratings a company has earned aren’t “genuine.”

The analysis, conducted recently by small business SaaS supplier Womply, sought to study the correlation between online customer reviews and company revenues, and in doing so it looked at data from a large number of U.S. small businesses.

The more than 200,000 businesses studied had an average annual revenues of around $300,000. The Womply research spanned diverse industries and markets including restaurants, auto shops, retailers, medical and dental offices, hair and nail salons, etc.

While the ratings dynamics may be surprising, another Womply finding reinforces the intuitive view that attracting more reviews online is better than attracting fewer ones.

The businesses studied by Womply averaged ~82 total reviews across multiple online review sites. But for those businesses attracting more than the average number of reviews, they earned ~54% more in annual revenues than the average.  And for those with 200 reviews or more, the average annual revenues were nearly double the average revenue figure.

The propensity for companies to respond to reviews appears to boost revenue performance as well. The Womply study found that businesses that fail to interact with their customers’ reviews earn lower revenue on balance – as much as 10% less than their counterparts.

The key takeaway points from the Womply research appear to be:

  • Too many top-rating reviews risk making a company’s reputation appear less genuine, actually repelling business rather than attracting it.
  • To improve revenues, businesses should encourage their customers to post reviews online.
  • To improve revenues, businesses should engage with reviewers by responding to their comments, addressing concerns, and expressing gratitude for praise.
  • People feel more affinity with companies that acknowledge their customers and treat them like they care. It’s basically the Golden Rule in practice.

What are your thoughts? Do the findings surprise you?  Please share your perspectives with other readers.

Do consumers really understand “native advertising” labeling?

There’s no question that “native advertising” – paid editorial content – has become a popular “go-to” marketing tactic. After all, it’s based on the time-tested notion that people don’t like advertising, and they’re more likely to pay attention to information that looks more like a news article than an ad.

Back in the days of print-only media, paid editorial placements were often labeled as “advertorials.” But these days we’re seeing a plethora of ways to label them – whether identified as “sponsored content,” “paid posts,” or using some kind of lead-in descriptor such as “presented by …”

Behind all of the verbal gymnastics is the notion that people may not easily distinguish native advertising from true editorial if the identification can be kept somewhat euphemistic. At the same time, the verbal “sleight of hand” raises concerns about the obfuscation that seems to be going on.

These dynamics have been tested. One such test, conducted several years ago by ad tech company TripleLift, used biometric eye-tracking to see how people would view the same piece of native advertising, that carries different disclosure labeling.

The results were revealing. Here are the percentages of participants who saw each ad, based on how the content was labeled:

  • Presented by” labeling: ~39% saw the content
  • “Sponsored by” labeling: ~29%
  • “Promoted by” labeling: ~26%
  • “Brought to you by” labeling: ~24%
  • “Advertisement” labeling: ~23%

Notice that the content that was labeled “advertisement” was noticed the least often. This provides yet more confirmation that people ignore ads.  When advertisers used softer/fuzzier terms like “presented by” and “sponsored by,” they achieved a bigger lift in the content being noticed.

It comes as little surprise that those same “presented by” and “sponsored by” labels are also the most potentially confusing to people regarding whether the item is paid content. And when people find out the truth, they tend to feel deceived.

Members of the Association of National Advertisers look at it the same way. In an ANA survey of its members conducted several years ago, two-thirds of the respondents agreed that there should be “clear disclosure” of native ads – even if there’s a lack of consensus regarding who should be responsible for the labeling or what constitutes “clear” disclosure.

Asked which labeling describes native ad disclosure “very well,” here’s what the ANA survey found:

  • “Advertisement”: 62% say this labeling describes native ad placements “very well”
  • “Paid content”: 37%
  • “Paid posts”: 34%
  • “Sponsored by”: 31%
  • “Native advertising”: 12%
  • “Presented by”: 11%
  • “Promoted by”: 11%
  • “Branded content”: 8%
  • “Featured partner”: 8%

Considering that the findings are all over the map, it would be nice if a universal method of disclosure could be devised. But the language that’s agreed upon shouldn’t scare away readers, since in so many cases native advertising isn’t directly pitching a product or service.  Labeling such content “advertising” would be as much of a misnomer as failing to divulge the company paying for the placement.

My personal preference for adopting consistent labeling language among the options above would be “Sponsored by …”  What’s yours?

Roads to … nowhere?

Google Maps admits its business listings are riddled with errors and outright fraudulent entries.

The news reports hit fast and furious this week when the media got wind of the millions upon millions of “faux” business listings on Google Maps, thanks to a new Wall Street Journal exposé.

It’s true that there are a ton of map listings displayed by Google on search engine results pages, but the latest estimates are that there are more than 11 million falsely listed businesses that pop up on Google searches on any given business day.

That number may seem eyebrow-raising, but it’s hardly “new news.” Recall the reports that date as far back as a half-decade — to wit:

  • In 2014, cyber-security expert Bryan Seely showed how easy it was to use the Internet’s open architecture to record telephone conversations and create fraudulent Google Maps listings and locations.
  • In 2017, Google released a report titled Pinning Down Abuse on Google Maps, wherein it was estimated that one in ten fake listings belonged to actual real-live businesses such as restaurants and motels, but that nefarious third-parties had claimed ownership of them. Why do this? So that the unscrupulous bad-actors could deceive the targeted businesses into paying search referral fees.

Google is owning up to its continuing challenges, this week issuing a statement as follows:

“We understand the concerns of those people and businesses impacted by local business scammers, and back in 2017 we announced the progress we’d made. There was still work to be done then, and there’s still work to be done now.  We have an entire team dedicated to addressing these issues and taking constant action to remove profiles that violate our policies.”

But is “constant action” enough? Certain business trades are so riddled with fake listings, it’s probably best to steer clear of them altogether.  Electricians, plumbers and other contractors are particularly sketchy categories, where roughly 40% of Google Maps listings are estimated to be fraudulent entries.

The Wall Street Journal‘s recent exposé, published on June 24th, reported on a search its researchers conducted for plumbers in New York City.  Of the top 20 Google search results returned, only two actually exist where they’re reported to be located and accept customers at the addresses listed.  That’s pretty awful performance even if you’re grading on a curve.

A measure of progress has been made; Google reports that in 2018 it removed some 3 million fake business listings. But that still leaves another 11 million of them out there, silently mocking …

Facebook attempts to clean up its act.

Is it enough?

Watching Facebook these days as it pivots from diffusing one “rude development” to another seems a little like watching someone perform a combination plate-spinning and whack-a-mole act.

We’ll call it the Facebook Follies.  The question is … is it working?

Last month, Facebook issued its newest Community Enforcement Report – a document that updates the world about improvements the social media giant is making to its platform to enable it to live up to its stated community standards.

Among the improvements touted by the latest report:

  • Facebook reports now that ~5% of monthly active accounts are fake. (Still, 5% represents nearly 120 million users.)
  • Facebook reports now that its ability to automatically detect “hate speech” in social posts has jumped from a ~24% incidence in 2018 to ~65% today. (But this means that one-third of hate speech posts are still going undetected.)

Moreover, Facebook now reports that for every 10,000 times Facebook content is viewed by users:

  • ~25 views contain content that violates Facebook’s violence policy
  • ~14 views contain content violating Facebook’s adult nudity and sexual activity policy
  • Fewer than 3 views contain content violating Facebook’s policies for each of these categories: global terrorism; child nudity, and sexual exploitation

The community enforcement information is being reported as “wins” for Facebook … but people can’t be faulted for thinking that Facebook could (and should) be doing much better.

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Facebook CEO Mark Zuckerberg

On a different type of matter, this past week it was reported that Facebook has agreed to settle a class-action complaint that accused the social platform of inflating viewing metrics on Facebook videos by up to 900%.

Although details of the settlement haven’t been revealed, this development appears to close the book on criticisms that were lodged as far back as 2016, in which advertisers charged that Facebook hadn’t investigated and corrected errors in its metrics — nor allowed for third-party verification of the metrics.

It’s yet another agenda item that’s now been ticked off the list – at least in Facebook’s eyes. But now another controversy has now erupted as reported over the past few days in The Wall Street Journal.

Described in a front-page article bylined by veteran WSJ reporters John McKinnon, Emily Glazer, Deepa Seetharaman and Jeff Horwitz, Facebook CEO Mark Zuckerberg appears linked to “potentially problematic privacy practices” that date all the way back to 2012, when Facebook signed a consent decree with the Federal Trade Commission but that it may have violated subsequently.

Contemporaneous e-mail communications retrieved from the time period suggest that Zuckerberg was more than merely passively involved in deliberations about a particular app that claimed to have built a database stocked with information about millions of Facebook users. Purportedly, the app developer had the ability to display the Facebook user information to others — regardless of those users’ privacy settings on Facebook.  The e-mails in question detail speculation about how many other apps were stockpiling such kinds of user data, but the evidence shows little or no subsequent action being taken to shut down the data mining activities.

Another view.

These latest developments raise questions about the veracity of Facebook’s stated intentions to redouble its efforts to uphold community standards and focus more on user privacy, including moving toward encrypted and “ephemeral” messaging products that are better aligned with the European Union’s existing privacy laws that the United States may also be poised to adopt in the future.

Apparently Facebook recognizes the problem: It’s ramping up its global advertising spending to “rebuild trust” — to the tune of doubling its previous ad expenditures.  Here’s what Facebook’s marketing head Antonio Lucio is saying:

“There’s no question we made mistakes, and we’re in the process of addressing them one after the other.  But we have to tell that story to the world on the trust side as well as the value site.”

Ad-tracking company Kantar notes a big increase already in Facebook’s U.S. ad spending — up to nearly $385 million in 2018 compared to only around $50 million the year before.  As for the campaigns themselves, Facebook is relying on a number of big-name ad agencies like Wieden+Kennedy, Leo Burnett and Ogilvy for developing its various campaigns.

Another view.

There’s more than a little irony in that.

Considering the latest news items, what are your thoughts about Facebook? Are they on the right track … or is it “too little, too late”?  Are their intentions honorable … or are they simply engaged in “window dressing” to get people off their case?  Let us know your thoughts.

The evolution of e-mail.

It’s all about mobility now.

With the proliferation of mobile screens in both the business and personal environments, it was bound to have an impact on the way that people interact with e-communications.

And now we see the extent.  Recently-released stats from e-mail software and analytics company Litmus in its 2019 State of Email report reveal that ~43% of all e-mails are now being opened on mobile devices.

That compares to ~39% being opened in webmail and just ~18% in desktop applications.

How this is playing out is pretty clear.  People are riffling through e-mails on their mobile devices to determine what to keep and what to delete.  They might come back to the saved e-mails on a different (larger) device, but the first cut is most often via mobile.

This sort of “triage” behavior is happening in the workplace as much as in personal communications.  What it means is that the initial impression an e-mail leaves has to be super-effective like never before. The “from” line and the “subject” line have to work harder than ever to draw the attention of the viewer and avoid a quick consignment to the recycle bin.

Only slightly less important are the first one or two sentences of the e-mail content — particularly for those people who choose to have preview options activated.

It’s putting more emphasis than ever on “mere words” rather than photos, other images or eye-catching design. In an ironic twist, we’ve come full circle and are now back to where it all started with messages hundreds of years ago:  words, words and words.

Another interesting consequence is the second look that some marketers are giving to direct mail, which — although clearly more costly than e-communications – does provide far better way to draw attention of a target audience through design and imagery instead of the quick trip to the trash bin.

The Litmus 2019 State of Email report can be downloaded here.

Twitter, in Four Sentences

Terry Teachout

Back in 2015, Wall Street Journal columnist, author and arts critic Terry Teachout had a few choice comments to make about Twitter — then as now one of the more controversial of the social media platforms.

With the passage of time — as well as significant elections, referenda and other socio-political developments intervening — it’s interesting to go back and read Mr. Teachout’s comments again.

From his perspective, in 2015 Teachout had postulated that the essence of Twitter could be boiled down to four statements, as follows:

  • How dare you talk about A, when B is infinitely more important?
  • If I disagree with you, you’re almost certainly arguing in bad faith — and are probably evil as well.
  • You are personally responsible, in toto and in perpetuity, for everything that your friends, colleagues, and/or ancestors have ever said, done, or thought.
  • (Statements #2 and #3 do not apply to me.)

Looking at these statements, it’s pretty remarkable how little has changed.

Or has it? What do you think?

[In an interesting side-development, Terry Teachout’s own Twitter account was hacked in 2018 — several years after he published his statements above.  As he recounts here, trying to get all of that sorted out with the social media platform was it’s own special kind of misery, even if ultimately successful.]

Pandora’s Box: Spotify is poised to become the #1 music streaming service in the United States.

This past month, digital marketing research firm eMarketer issued its new forecast on music streaming activities in the United States. What it shows is that Pandora, which has dominated the market ever since the category was created in 2000, will likely fall to the #2 position, overtaken by Spotify.

Based on a calculation of internet users of any age who listen to music streaming on any device at least once per month, Pandora jas occupied a narrow band of between 72 million and 77 million listeners since 2015.

During that same period, Spotify users have increased dramatically, from ~24 million to ~65 million Americans. And eMarketer projects that Spotify will overtake Pandora by 2021.  The chart below shows the trajectory:

Actually, the trend had been building since even before 2015. In 2012, Pandora had ~67 million users compared to Spotify’s paltry ~5 million.  But Pandora has been shedding users in recent years.  As the chart above illustrates, by 2023 Pandora will have lost nearly 10% of its users since 2014.

To be sure, Pandora still holds a robust ~35% of audio listener penetration in the United States as of this year. But Spotify is nipping at its heels with a ~32% share.  Amazon Music (~18%) and Apple Music (~16%) are further back, but with still-significant chunks of the marketing.  (It should be noted that there is overlap, as some listeners may engage with more than one music streaming service during the month.)

What has caused the change in fortunes? Christ Bendtsen, an eMarketer forecasting analyst, says this:

“Pandora lost users last year because of tough competition from other services attracting people to switch. Apple Music has been successful in converting its iPhone user base.  Amazon Music has grown with smart speaker adoption, and Spotify’s partnerships have expanded its presence across all devices.”

Speaking in particular about Spotify’s rapid surge, Bendtsen notes:

“Spotify’s initial growth was driven by its unique combination of music discovery, playlists and on-demand features. But now that all music streaming services [possess] the same features, Spotify’s future success will rely on partnerships with other companies.  It has teamed up with Samsung, Amazon, Google and Hulu to be on all devices and provide bundled offerings.  We expect more partnerships to come, leveraging multiple brands, devices and services to drive user growth.”

As for Apple Music, there’s a reason it lags behind other music streaming services in the rankings. That service operates on a subscription-only model and doesn’t offer any form of advertiser-supported free usage.  Forecasters expect it to remain in the #4 position with its “premium-only” business model.

More information about the eMarketer music streaming forecast is available here.

What are your own music streaming listening habits? Have they changed in recent years, and if so, how and why?  Please share your thoughts with other readers.

“Wake me when it’s over”: Corporate podcasting goes over like a zinc zeppelin with employee audiences.

Just because podcasts have become a popular means of communication in a broader sense doesn’t mean that they’re the slam-dunk tactic to successfully achieve every kind of communications objective. Still, that’s what an increasing number of large corporations have decided to do.

And yet … an article by writers Austen Hufford and Patrick McGroarty that appeared last week in The Wall Street Journal paints a picture of what many of us have suspected all along about podcasts that are produced by corporations for their employees and other “stakeholders.”

These self-important testaments to “corporate whatever” have as much impact as the printed memos of yore – you know, the ones with sky-high BS-meter ratings – had.

Which is to say … not much.

Invariably, podcast topics are ones which next to no one in the employee trenches cares anything about. As a result, corporate podcast open stats are abysmal – running between 10% and 15% if they’re lucky.

And the paltry open rates alone don’t tell the entire story. How many people are tuning them out after just a minute or two of listening, once it becomes clear that it’s yet another yawner of a topic that senior leadership deems “important” and that corporate communications departments try mightily but unsuccessfully to bring alive.

More often than not, the production values of these corporate podcasts have all the pizzazz of a cold mashed potato sandwich. Consider this breathless declaration by PR director Lindsay Colker in a December 18th Netflix podcast:

“I think that Netflix has taught me so much more than information about a job. The person that I was, coming into Netflix, is an entirely different person than the person I am now.”

This response, posted by a Netflix employee on the Apple iTunes store site, is all-too-predictable:

“Hard to follow, boring and dry hosts, and tooooo long.”

Or this recent American Airlines podcast that covered the company’s three major strategic objectives for 2019. After company president Robert Isom described the strategies for the podcast audience, host Ron DeFeo, an American Airlines communications vice president exclaimed, “That’s awesome!”

Employee reaction was far different. Here’s one response from an American Airlines pilot:

“How about you tell me why I should listen to this? A healthy employee doesn’t live and breathe their job 24/7, and the last thing they’re going to do after being on a plane for 12 hours is listen to a podcast.”

Ouch.

Perhaps because of this kind employee pushback, one company, Huntington Ingalls Industries, permits its workers to count the time they spend listening to the company’s podcast on their time sheets.

One suspects that absolutely every HII employee is posting 15 minutes on their timesheets each time a podcast is released – whether or not they’re actually listening to it. (That may also explain why each HII podcast is strictly limited to just 15 minutes in length …)

Every company interviewed by the writers of The Wall Street Journal story admitted that engagement levels with their corporate podcasts are disappointing.  PPG Industries’ response is illustrative.  With only a few hundred listeners tuning in each month out of a total employee base of more than 47,000 workers, “We have a ways to go,” admits Mark Silvey, PPG’s director of corporate communications.

What do you think? Will corporations find themselves riding a wave of success with their podcasting?  Or are they swimming upstream against the triple currents of apathy, ennui, and snark? Will corporate podcasting become tomorrow’s “obvious tactic” or end up being yesterday’s “glorious failure”? Feel free to share your perspectives with other readers.

Music industry mashup: Streaming audio sets the pace.

… while digital downloads fade and physical music media sales hold steady.

The music industry revenue reports issued annually by the Recording Industry Association of America (RIAA) are always interesting to look at, because they chronicle the big trends in how people are consuming their music.

The 2018 RIAA report is particularly enlightening, as it finds that streaming audio now accounts for three-fourths of all U.S. music industry revenue. With more than 50 million Americans subscribing to at least one streaming service, those revenue stats certainly make sense.

Moreover, the RIAA report states that 2018 revenues from streaming music platforms amounted to nearly $7.5 billion. That compares to just $1.1 billion (~11%) for digital downloads and $1.2 billion (~12%) for physical media sales.

Equally significant, streaming revenues account for nearly all of the revenue growth experienced across the entire industry – and the growth is dramatic. Streaming revenues jumped ~30% between 2017 and 2018, whereas growth in the other segments was essentially flat.

Within the streaming segment, all three major sectors – premium subscriptions, ad-supported on-demand streaming, and streaming radio – experienced revenue growth.  But paid subscriptions continue to comprise the biggest chunk of revenue; they make up ~73% of all streaming revenues, or $5.4 million.

Ad-supported on-demand streaming is also proving to be quite popular with users, but while revenues grew by some 15% in 2018 to reach $760 million, it’s pretty clear that ad-supported streaming audio services lag behind in terms of generating revenues. Ad-supported streaming may account for more than one-third of all streaming activity … but only ~8% of streaming revenues.

The third segment — radio streaming services – looks to be a particularly bright spot. These services are evolving nicely, passing the $1 billion mare in revenues in 2018 for the first time.

But the main takeaway is this:  Streaming audio now represents the “mainstream” while digital downloads are going the way of the cassette tape in an earlier era. And physical media (CDs, vinyl) have stabilized to a degree that many observers might not have anticipated happening just a few years ago.

More information from the 2018 RIAA report can be viewed here.

What are your own personal music consumption preferences? Feel free to share your thoughts with other readers here.

Reuters: In 2019, publishers will experience “the biggest wave of layouts in years” … and massive burnout among the journalists who remain.

The bad news continues for the publishing industry in 2019.

I’ve blogged before about the employment picture in journalism, which has been pretty ugly for the past decade.   And just when it seems that news in the publishing industry couldn’t get much worse … along comes a new study that further underscores the systemic problems the industry faces.

The results from a recent Reuters survey of publishers worldwide point to declines that will only continue in 2019.  In fact, Reuters is predicting that the industry will experience its largest wave of layoffs in years, coming off of a decade of already-steadily shrinking numbers.

The main cause is the continuing struggle to attract ad revenues – revenues that have been lost to the 600-lb. gorillas in the field – particularly Facebook, Google and Amazon.

Growing subscription revenue as opposed to a failing attempt to attract advertising dollars is the new focus, but that will be no panacea, according Nic Newman, a senior research associate at Reuters:

“Publishers are looking to subscriptions to make up the difference, but the limits of this are likely to become apparent in 2019.”

In addition to boosting subscription revenue, publishers are looking to display advertising, native advertising and donations to help bankroll their businesses, but advertising is the main focus of revenue generation for only about one in four publishers — a far cry from just a few years ago.

Putting it all together, Reuters predicts that it will lead to the largest wave of publishing job layoffs “in years” – and this in an industry where employment has been shrinking for some time now.

With yet more layoffs on the horizon, it’s little wonder that the same Reuters research finds employee burnout growing among the employees who remain. As Newman states:

“The explosion of content and the intensity of the 24-hour news cycle have put huge pressure on individual journalists over the last few years, with burnout concerns most keenly felt in editorial roles.”

A major reason why:  Even more is being asked from the employee who remain – and who are already stretched.

Journalism salaries are middling even in good times – which these certainly are not.  How many times can an employee be asked to “do more with less” and actually have it continue to happen?

Even the bragging rights of journalists are being chipped away, with more of them relegated to spending their time “aggregating” or “curating” coverage by other publishers instead of conducting their own first-hand reporting. That translates into perceptions of lower professional status as well.

In such an environment, it isn’t surprising to find editorial quality slipping, contributing to a continuing downward spiral as audiences notice the change — and no doubt some turn elsewhere for news.

Last but not least, there’s the bias perception issue. Whether it’s true or not, some consumers of the news suspect that many publishers and journalists slant their news reporting.  This creates even more of a dampening effect, even though in difficult times, the last thing publishers need is to alienate any portion of their audience.

How have your periodical and news reading habits changed in the past few years? Do you continue to “pay” for news delivery or have you joined the legions of others who have migrated to consuming free content in cyberspace?

(For more details from the Reuters research, you can sign up here to access the report.)