TripAdvisor, the leading hotel and travel reviews site, will be spun out from its parent Expedia this month, and shareholders are giddy. With 50 million reviews and counting, the site is shaking the travel industry to its core.
Underlying TripAdvisor’s success is a powerful long-term trend: ratings websites threaten to make many brands irrelevant.
Historically, brands were built on the assumption of limited information. As mass production made it possible to sell soap and soup nationwide, companies developed brands to represent quality and cultivate product loyalty. Brands were a natural fit for radio and TV advertising, and brands thrived with the proliferation of cable channels, which kept advertising costs down while offering unprecedented demographic targeting.
With the rise of user-generated content, however, brands have faced challenges. People are talking about brands on social media sites in ways that brand managers can’t control and often can’t even detect. Facebook and Twitter get most of the attention for brand disruption, but the biggest problems for brands are in search and e-commerce.
Take this Google search for Super 8 Motels, for example. On the front page, you’ll see ratings that hotel guests have written about particular Super 8s on TripAdvisor, Yahoo Travel and Yelp. Importantly, the reviews vary widely. When I checked, a New Mexico location was rated 4.5 stars, while a Los Angeles location was at 3.5 stars and one in British Columbia had only 2 stars. Such location-specific information undermines brands’ ability to affect consumers’ purchasing decisions with 30-second TV spots and gives TripAdvisor a powerful position.
TripAdvisor is ahead of other travel sites thanks in part to their use of Facebook-connected recommendations, which help websites make sales by establishing instant trust with visitors. As a potential hotel guest, I am interested in the consensus among previous guests, but I am especially interested in what my friends have said. Reviews can be intensely personal — for example, here’s my TripAdvisor review of a beach resort in Mexico — and if you know the author, it makes a huge difference in how reliable you consider the review.
For the Super 8 brand, the end game could be scary: as TripAdvisor accumulates more and more trusted reviews, the best-performing Super 8s, all of which are independent franchises, may eventually realize that their business is suffering from their association with lesser motels. At that point, we might see a “brand run,” wherein the best locations leave the chain, lowering the brand’s value and ultimately leading to its collapse.
For brand managers, it’s going to get tougher before it gets easier, but our advice is simple:
- Recognize that you’ve lost “control” of your brand and can’t get it back — the Mad Men era is history and the micro-reputation era is upon us.
- Start working with your customer service department to find and fix the worst-reviewed locations or people in your company.
- Start building your own online recommendation and review content so that you have a say in the broader conversation. Identify happy customers and ask them to review the specific location (or professional) that pleased them. You can direct them to your own internal review site, or to an aggregator like TripAdvisor, but make sure you give them a direct link and emphasize that recommendations help the individual people that the customer interacted with. At Stik.com, we’ve found that satisfied customers are happy to spend two minutes to help someone who did a good job, but are generally less motivated to help a faceless company.
For everyone else, sit back and enjoy the ride. The loss of some familiar brands is a small price to pay for more informed purchasing decisions and fewer unpleasant surprises.
Nathan Labenz is a co-founder of Stik.com, a startup that helps people do business with professionals that their friends recommend.
Image courtesy of Flickr user sushiesque.
Some extra analysis on the Stik blog: http://blog.stik.com
There is much good insight in this post.
The other aspect is the threat of competition using the ‘ease’ of online reputation destruction via Google and TripAdvisor to get the better of your brand. As you did point out, the integration with Facebook / other social mechanisms of bringing in the trust factor of reviews from familiar people does help in this regard.
Brands are all about trust and the funny thing is that Trip Advisor is also a brand. As long as the brand can remain trusted, it will continue to be powerful. However, this far from guaranteed; many review sites have been keen to find interesting ways to monetize that might not benefit the trust of their brands in the long-term.
It is a very interesting topic to discuss as we are still in the early innings of seeing how this plays out. One issue we confront today is fake reviews both positive and negative on sites so they are not completely trustworthy today but longer term this will be figured out. Advertising will always be important but word of mouth should become faster so the best companies should be able to make inroads quicker. The hotel article in the example is particularly interesting and begs the question of whether you are better of paying the royalty fee to Super 8 as a regional hotel or spend the extra money making a better customer experience.
Good topic & my main point, fake negative reviews which no control over
out of the pool of 50 million reviews, 10 million are considered fake :) Social media has reduced the communication gap between brands and consumers which creates a new challenge for digital marketing.
This has historically been a huge problem, which is why Facebook-powered logins are so critical.
I agree with this Nathan – though I think the login in and of itself is not a solved problem. Given the prevalance of hacks, I would like a tiny scraper-sensor on laptops that detects my DNA when I log-in, to ensure ultimate trust, :) It seems I am posting this anonymously though
Booking.com, part of priceline solved this by allowing only customers that booked to comment and review. This makes it highly credible. I don’t use TripAdvisor any more.
Why is Facebook considered some vast wealth of knowledge and truth when it comes to log ins?
one in five is a challenge that we must face
Anonymity and self-reviews have diluted the credibility of certain review sites. It was nice to learn about sites like Stik.com, which brings “trust” back to reviews, gathering opinions from those with Facebook profiles. Love it!
my thoughts also and nice also to learn of Stik
Great article!
It may be obvious, but the “end-game” for the explosion of review content online hinges on the relationship between the reader and the writer. Facebook authenticates reviews (for the most part eliminating trolls), but the personal connection is the holy grail – if a review is written by a friend or trusted entity (perhaps a celebrity travel critic you “follow”), the usefulness can be profound, and is unlikely to be matched by any other rating mechanism in the medium term.
When a review is written by someone you know you are only a few clicks from asking more details to him. Brands have no control of it and trusted people can start to review all what they want. It’s upon them to maintain their credibility.
Right on
User reviews perform the same job as brands that are working to create trust with the consumer. This aspect of branding is at risk, but not necessarily branding itself. Instead, the trust aspect of brands can now be handled by the users themselves, freeing up your brand to perform other jobs.