Consumer Reviews: 5 Stories That Changed Reviews in 2016

It’s hard to imagine consumer reviews changing significantly.

After all, consumer reviews have been around in some form another since human commerce started millennia ago. Even online reviews — which started in 1999 with Epinions — are pretty well established, compared to many other web-based technologies. So the idea that online reviews could be rocked to their core in so many ways within the space of just one year might be a bit hard to swallow.

Hard to swallow or not, however, 2016 was a game-changer for consumer reviews.

Much of this change was the result of greater governmental regulatory pressure or attention from academia or just review-related companies acting to promote their own survival. Regardless of their origins, these events pushed consumer reviews into the limelight in big ways — taking what is usually just a marginalized pet topic of people like me and turning it into mainstream news.

Without further ado, here are the five stories that changed consumer reviews most in 2016 — and will probably cause shockwaves for years to come:

1. Consumer Review Fairness Act of 2016 signed into law

From the beginning, online reviews represented a kind of “Wild West” in terms of the rights of companies and consumers. Left to their own devices, consumers naturally assumed they could speak — positively or negatively — about their experiences with companies, on review sites or on social media.

On the other side, companies went on the offensive, sneakily getting customers to sign non-disparagement clauses and then suing them if they said anything negative about them online.

Perhaps seeing an easy win in an election year, an issue that lawmakers of all stripes could get behind, Congress took up the issue in 2015 and sought to create rules and protections for companies and customers alike. The result was a bill that outrightly banned non-disparagement clauses, drew consumer reviews into the realm of free speech, and updated protections to the ever-changing multimedia landscape, including social media, image sharing, and more.

It also made very clear under what circumstances companies could sue customers for negative messages shared online.

Ultimately, the Consumer Review Fairness Act of 2016 became one of those rare bipartisan initiatives with unanimous support. After many versions and successful passages in the House and Senate, the act was officially signed into law on December 15 by President Obama, making quite the finale for a year of great consumer review moments.

Review sites and consumers alike celebrated, as Yelp’s director of public policy, Laurent Crenshaw, did in this quote to Engadget:

“One of our top priorities has always been to protect the ability for internet users — everyone from Yelpers to online shoppers — to share their experiences online, whether they be positive or negative. The Consumer Review Fairness Act gives Americans nationwide new guaranteed legal protections when it comes to sharing these honest, first-hand experiences.”

What makes this such a game-changing moment for customer reviews? Up to this point, customers who left negative reviews online were doing so at their own peril. Often, they could get easily pummeled by companies with greater legal resources than their own. And by wielding this threat unchecked, companies could hide unsavory details about their products and services and leave other potential customers unaware. Now, customers are protected from unwarranted retaliation by companies who dislike their online messages.

And finally, both sides, customers and companies, can enjoy an unprecedented level of clarity on the subject, not having to worry if they’re going to cross a line into lawsuit territory or not.

2. Amazon bans incentivized reviews

Amazon’s crusade against paid reviews has been going on for well over a year now. Some time a couple years ago, Amazon realized that their review system — which displays product search results largely according to products’ average star ratings — was at risk of becoming a joke. This meant that their integrity as an online retailer was also at risk — if consumers couldn’t trust their search results or the customer reviews, how could they trust anything about the products they were purchasing on the world’s biggest retailing site?

So Amazon started suing the crap out of fake reviewers, people paid to leave positive reviews about books or hairdryers or whatever. Soon, fake reviewers were running for the hills, but a new micro-industry popped up in their stead: incentivized reviews. If paid reviews were now forbidden, perhaps sellers could get positive reviews by giving would-be reviewers products for free, in exchange for a favorable review.

Granted, these types of reviewers had been around for a long time and were okay as long the reviewers made it clear that they had received the product for free. But then ReviewMeta put out a new study.

According to the study’s analysis of 7 million Amazon reviews:

• Incentivized users had made a part-time career of it, posting an average of 232 reviews (compared to just 31 reviews on average from normal users).
• The average review from incentivized users was 4.74 stars, while the average from regular users was only 4.36.
• Incentivized users were 12x less likely to leave a one-star review.
• Within only two years, incentivized reviews had gone from just 2% of all reviews to being the majority of all new reviews.

Seeing a growing danger to its site’s credibility, Amazon promptly banned incentivized reviews and threatened penalties for both sellers providing them and incentivized reviewers accepting them.

While this might seem like just a widening of Amazon’s net in its attempt to clean up its review system, this move also sends a strong signal to the Internet at large and begins to draw lines around what is acceptable and what is not in the world of reviews. Say what you want about Amazon’s crazy internal culture — they and the U.S. Congress are leading the charge in the battle for a fairer, more credible review system.

3. Angie’s List goes freemium

Amidst the throngs of review sites, home services site Angie’s List has always been unique for its paid-only subscription model. The site had also long been hounded by rumors and accusations that, despite the site’s claims to the contrary, companies could pay for higher rankings, despite poor reviews. Neither of these sat well with customers who could easily peruse reviews for free on a host of other sites — and the effect on the site’s bottom line.

In a way, Angie’s List represented a belief that reviews could locked up and monetized, while pretty much the rest of the Internet espoused a freedom of access around reviews. While the rest of us believed that reviews were a sort of democratic resource that should belong to everyone, Angie’s List held staunchly to the stance that reviews could be owned and controlled by companies.

And in the end, Angie’s List lost. What finally prompted their acquiescence, according to CEO Scott Durchslag, is surprising:

“Ninety percent of millennials were saying as a matter of principle they would never, ever pay just to read a review. When you have that kind of clarity, I mean you can try and fight gravity if you want to, but I’m not going to do that. I’m going to embrace it.”

4. Lorde & Taylor sued by FTC

Even while the federal government was crafting legislation to protect consumer reviewers, they were also striking at potential misuses of reviews by companies. The most public example of these involved department store retailer Lord & Taylor, social media, and a paisley dress.

The retailer first took out a native ad (i.e. a paid advertisement disguised as an unbiased article) about the paisley dress in fashion magazine Nylon and paid to have a photo of the dress and a caption, both approved by Lord & Taylor, posted on Nylon’s Instagram account. Then the retailer sent the dress to 50 top fashion influencers and paid them between $1,000 and $4,000 to post a photo of themselves wearing the dress on their social media accounts. Oh, and they had to use the company-approved handle @lordandtaylor and #DesignLab on each posting, and get every posting pre-approved by the retailer.

At first glance, this campaign was a success. The posts reached 11.4 million individual Instagram users overall in only a couple days, and the dress flew off store shelves. The problem: none of these postings disclosed that Lorde & Taylor had paid for the postings or given the dress for free.

The Federal Trade Commission was not a fan. Said the director of the FTC’s Bureau of Consumer Protection:

“Lord & Taylor needs to be straight with consumers in its online marketing campaigns. Consumers have the right to know when they’re looking at paid advertising.”

Why was the story so important in the larger consumer review story? Because it was the first time the government went on the attack against what were, essentially, paid reviews. In the FTC’s eyes, the campaign represented an attack on the principle of truth in advertising. And no sooner had the lawsuit been announced than marketers across the country began scrambling to rethink their influencer marketing campaigns.

5. “Navigating By the Stars” Study

Not all of this year’s top consumer review stories were favorable. For a long time, critics of online reviews have questioned their validity and even accused them misleading other consumers and unjustly punishing perfectly good businesses. In April of this year, a group of professors from CU-Boulder published a study in The Journal of Consumer Research, which sought to settle this issue once and for all.

The study attempted to do this by comparing average user reviews to those issued by the reviewing professionals at Consumer Reports, which they considered to be the standard for quality, objective reviews. Their finding:

“The broad conclusion from our work is that there is a substantial disconnect between the objective quality information that user ratings actually convey and the extent to which consumers trust them as indicators of objective quality.”

One of the researchers pointed out:

“The likelihood that an item with a higher user rating performs objectively better than an item with a lower user rating is only 57 percent. A correspondence of 50 percent would be random, so user ratings provide very little insight about objective product performance.”

Whether or not you agreed with the study’s methodology or their conclusions, the study was also enough to prompt a New York Times article blaming frivolous Yelp reviews for killing business at owner-operated restaurants.

The study was also enough to raise questions about consumer reviews as a whole. How useful are they? How trustworthy are they? And why do consumers increasingly trust user-generated reviews over those of experts? Should we leave reviewing to the experts or is there some insight that regular consumers can provide that the experts can’t?

Where to Next?

After such consumer review as this, where do they go next? At the very list, consumers will enter the new year with more protections around their ability to report on their negative experiences with companies. Companies will find more guidelines around how to respond or use reviews properly. Interestingly, while companies like Amazon, organizations like the federal government, and most consumers seem to be invested in the value of consumer reviews, other groups still remain skeptical about their power and credibility. Will this question finally be answered in 2017? Only time will tell.