Who's that selling at your (online) door?
Viral marketing continues to rise, spurring efforts to demand disclosure on the origin of content.
By Gloria Goodale | Staff writer of The Christian Science Monitorfrom the March 17, 2008 edition
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Los Angeles - Whether it's Microsoft paying a journalist to edit the company's entry on Wikipedia or the CEO of Whole Foods giving an anonymous online thrashing to competitor Wild Oats or Sony Corporation funding an "independent" fan blog, deceptive marketing practices on the Internet are a growing problem, new-media analysts say.
This type of consumer manipulation is known as "astroturfing," and efforts to stomp it out are growing. The Word of Mouth Marketing Association (WOMMA) has been honing a set of voluntary ethical guidelines for its members, and the European Union recently banned the practice altogether.
"The Internet functions on trust," says Joel Postman, a corporate communications specialist and founder of Socialized PR, in Boulder Creek, Calif. "As more and more people do business in the digital world, more consumers than ever need to know who they can rely on to tell the truth."
Astroturfing, a word widely attributed to former US Sen. Lloyd Bentsen, is an umbrella term for any sort of fraudulent message masquerading as grass-roots word of mouth. It comes alongside a continued explosion in the world of viral marketing – self-replicating techniques that use text messages, video clips, images, and other means to encourage people to pass along a marketing message voluntarily and spontaneously. According to WOMMA, viral marketing has grown 39 percent in the past year alone, generating nearly $1 billion. Some 65 million American consumers shared their personal views on products with others online, according to a 2006 study by EMarketer, an Internet research firm.
Such peer-to-peer marketing is more important than ever because consumers are much savvier than they used to be, says Paull Young, a new-media strategist with Converseon, a media marketing firm in New York. Businesses have to be much more sophisticated to speak to a generation that has learned to tune out traditional advertising messages. It's harder than ever to get past the "sniff test" of today's consumers, says Mr. Young. That, he says, can put companies in a danger zone.
"Businesses have to be very careful, because the line between a creative ad campaign and unethical manipulation can be very fine," he adds. Many companies have found this out – sometimes the hard way.
Dan Gillmor, director of the New Knight Digital Media Center at Arizona State University, points to the incident with the CEO of Whole Foods. In the summer of 2007, the company was interested in acquiring rival grocer Wild Oats. CEO John Mackey appeared anonymously in an online chat forum and delivered extremely negative information about the rival. It was perceived as an effort to suppress the company stock price in advance of the Whole Foods takeover.
When his identity was unmasked, Mr. Mackey was taken to court for unethical market manipulation. Mr. Gillmor suggests that while legal action is one way to deal with deceptive behavior, the court of public opinion may be more effective.
"Reputation is so much more important to a public company," he says. "I'm a Whole Foods customer but now, after I know what the company tried to do, I would think twice about shopping there again."
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