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Analysis of Pros of Online Reviews-Social Proofs

The explosion of social networks in the 21st century continue to influence advertising as consumers’ dependence on word-of-mouth from both online consumers and people they know continue to increase as well. According to a recent Global Trust in Advertising report that surveyed over 28,000 Internet users in more than 56 countries, approximately 92 % of people in all countries trust recommendations from their friends and family. The report puts online reviews as the second most trusted source of this kind of information, with 70 percent of the participants indicating this is the most preferred source of brand information.

Fifty six percent of the respondents, however, indicated that they trust company advertisements (Consumer Trust in Online 2012). Search Engine Land also surveyed over 2, 104 people, 90 percent in the U.S. and 10 percent in Canada, and reported that 88 percent of people read online reviews to establish the reliability of local businesses (88% Of Consumers Trust Online Reviews 2014).  These surveys indicate consumers around the world believe online reviews more than company advertisements. Businesses need to consider a variety of factors, including new laws that govern advertisements before choosing the right platform to publish their posts

Several factors explain the reason online reviews consumers consider online reviews more important than company advertisements.  The most powerful asset a business requires to be able to convince many contacts to get in touch with them is a positive reputation.  Within online reviews and star ratings are social proofs that make it easy for customers to short cut their search and make more informed decisions within a short time (Digital advertising 2010).

 The growing quality of reviews as well as review sites also makes them more convenient to users.  They enable users to interact and influence how they create and use information. Courtesy to this application, consumers now have a significant amount of consumer generated content that help to pass across a lot of information regarding different brands through a host of sites the hasty increase of the use of web 2.0 applications. It provides significant gains to both the business that embraces reputation marketing and consumers. Bright Local considers that these are some of the reasons for the consumer preference for online reviews. The company’s latest survey provides that 84 percent of consumers have confidence in these reviews as much as they do personal recommendation (Local Consumer Review Survey 2016).

Reviews sites give businesses opportunities to increase customer satisfaction. When customers receive personalized messages on their comments rather than automated messages, the company is humanized. This action also shows that the company is acknowledges the needs of the company and intends to provide a better experience. Since online review allows customers to complain, question, interpersonal dialogue can be used to address issues and that make many consumers to view both online reviews and the company in positive light (Local Consumer Review Survey 2016).

Rapidly Growing Quality of Reviews

 With customer satisfaction and brand loyalty, businesses become more authoritative.  When consumers see the company posting original content, they consider the company as credible. Regularly interacting with customers makes customers to see that the organization care about them and they are able to advertise on social media on behalf of the organization (Local Consumer Review Survey 2016).

With these benefits, however, companies still wrestle with the era of spiky consumers and negative online reviews. Some businesses are turned to fake reviews to attempt to strengthen their brands or attack competitors. According to credible evidence,   the use of fake reviews, those that reflect an organization’s genuine opinion, is on the rise (Street Marketing 2016).

The rapid rise in the use of fake reviews is not only unhealthy for consumers, but also breach consumer laws and undermines market efficiency. In all markets, laws that seek regulate deceptive reviews are in force.  The Competition and Markets Authority, for example, investigated fake posts on review sites and suspicious endorsements paid by businesses in 2015, and it in the process of investigating other related matters. The regulator recently discovered that Wool Overs, a clothing retailer, was in the business of cherry picking favorable reviews for their site. The retailer has since promised never to suppress unfavorable reviews in future (Street Marketing 2016).

The Advertising Standards Authority has also gotten a remit to regulate marketing communications on the websites of companies as well as other non-paid online spaces. This role will help to monitor online reviews and company advertisements (Jones & Eagleton 2011). 

 The US Federal Trade Commission is also actively enforcing its 2009 regulation.  In 2015, the commission filed its first compliant against an organization that was seeking to dissuade its clients from posting any negative feedbacks online (Cases and Proceedings. 2017)  In autumn 2015, Amazon began a legal action against 1.114 people for posting misleading and inauthentic online reviews. What motivated Amazon to take such a drastic decision against its customers in unclear, but the changing regulatory landscape must be the main factor behind it. The company went ahead to do the same again in 2016 (Amazon targets 1,114 'fake reviewers’; Brueck 2016).

Many companies are pondering with the hard question of how they can deal with negative online reviews.  Companies are adopting new strategies to deal with their customers’ damaging reviews. Charlton Football Club recently enforced a behavior contract on one of the club’s ticket holders who bad mouthed the club on Twitter. Facebook makes it easy to remove inappropriate comments, but that is not the case with Twitter, making life difficult for the football club.

Customer Satisfaction and Loyalty

Some companies don’t sell to customers who have given bad reviews in the past. After receiving an open letter that criticized the launch of the product, Breakthrough considered that the customer was not supposed to own this device (The social media bible 2013).

Other organizations are a little bit more flexible. Canadian airline WestJet says they welcome feedback and constructive criticism. However, they also receive abuses and expletives. The low cost airline still allows its customers to rant a little (The social media bible 2013).

Other than disgruntled customers, some company representatives do take things too far. Enraged representatives at Boston restaurant Pigalle might have overreacted when attacked a customer of Facebook for being unreasonable. Despite all these occurrences, as the surveys indicates, consumers still believe more in online reviews than company advertisements (The social media bible 2013).

Company advertising is relatively popular given its many advantages.  Companies are able to use this tool to position themselves in the market. Companies such as IBM, Apple, and Johnson & Johnson used this to create a well-define image, and that has helped them to succeed in their respective markets.  If a company uses this strategy to mislead the public, the outcome can be disastrous.  A major disadvantage of company advertisement is that their contents always reinforce the perspective of the organization, which makes many people to prefer more objective alternatives like online reviews. Strong brands have an advantage against their competitors (Faisal 2016).

Company advertising also directly depends on the efforts of the firm, but response is unpredictable.  While there are no second parties to influence the kind of message that the company want to pass out, the net result of engaging people does not guarantee the company will receive press coverage and publicity. Company advertisements are costly but do not guarantee results.  In addition, given the perception that the company has influence over what to tell the public, consumers can ignore the content. However, company advertisements still give organizations the opportunity to pass across the message that it has clearly (The social media bible 2013; Faisal 2016).

Company advertisement also helps organizations to reach select target markets. It enables them to target investors and managers of other firms. The problem is that the generation population may not appreciate this type of communication if it does not target them.  This may result to poor public relations. On the other hand, organizations that target select markets consider that the reaction of the general public does not matter as long as the target market appreciates it. In this particular respect, company adverting can be achieving its objectives (Faisal 2016).

Given that all the studies cited in this paper indicate that a significant majority of consumers believe in online reviews more than company advertising, businesses should invest in this strategy substantially. Many organizations prefer company advertising because of its advantages, but they should invest less in it currently as it offers limited benefits. Online reviews will remain popular for a long time as it also gives consumers the opportunity to express themselves.

 A company that wants to succeed in the 21st century should embrace the two strategies.  Since online reviews have many disadvantages as well, organizations can benefit by engaging consumers directly regarding the content of their ads. Finally, as technology changes rapidly, companies invest in research and development activities that will help them meet their marketing needs instead of waiting for external forces to determine the future of the industry.

Conclusion

Since company advertising is achieving its objectives, it would be fair if consumers believe more in it than online reviews.  However, this is not the case because online reviews appear more objective that company advertisement.  A company that is considering which of these two marketing strategies to use should consider online reviews but also plan for a possible change in consumer preference.

References

88% Of Consumers Trust Online Reviews As Much As Personal Recommendations 2014, viewed May 17, 2017, https://searchengineland.com/88-consumers-trust-online-reviews-much-personal-recommendations-195803

Amazon targets 1,114 'fake reviewers' in Seattle lawsuit 2015, viewed May 17, 2017, https://www.bbc.com/news/technology-34565631

Brueck, H 2016, Amazon wants to kill fake product reviews, viewed May 17, 2017,  https://fortune.com/2016/04/26/amazon-more-fake-review-lawsuits/

Brueck, H 2016, Amazon wants to kill fake product reviews, viewed May 17, 2017,  https://fortune.com/2016/04/26/amazon-more-fake-review-lawsuits/

Cases and Proceedings 2017, viewed May 17, 2017, https://www.ftc.gov/enforcement/cases-proceedings/142-3255/roca-labs-inc.

Consumer trust in online, social and mobile advertising grows 2012, viewed May 17, 2017, https://www.nielsen.com/us/en/insights/news/2012/consumer-trust-in-online-social-and-mobile-advertising-grows.html

Digital advertising 2010, Choice Reviews Online, 48(02), doi:10.5860/choice.48-0975

Faisal, A 2016, Marketing strategies in online/digital marketing, Account and Financial Management Journal, doi:10.18535/afmj/v1i8.01

Jones, S C, & Eagleton, K 2011,What do Australian consumers think about current advertising standards? Journal of Public Affairs, 12(4), 315-325, doi:10.1002/pa.424

Local Consumer Review Survey 2016 | The Impact Of Online Reviews 2016, viewed May 17, 2017,  https://www.brightlocal.com/learn/local-consumer-review-survey/

Street marketing: the future of guerrilla marketing and buzz 2016, Choice Reviews Online, 53(09), doi:10.5860/choice.195960

The social media bible: tactics, tools & strategies for business success 2013, Choice Reviews Online, 50(08), doi:10.5860/choice.50-4540

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