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.
Excellent post and one I was considering writing myself, but you got there first (and did a great job)!
Aside from the need for Tripadviser and similar sites to ensure authenticity of reviews, I think the key point is underlined when you say ‘brands were built on the assumption of limited information’. Times they are a changing – brands can no longer control what is said at the point of contact but they can influence the conversation afterwards.
Companies who invest enough resources in social media and monitor/measure brand mentions will be able to control potential PR disasters. Those that don’t are left to the public lion’s den.
Again, excellent post Nathan.
Chris – 3seven9
Interesting case study with regards to Super 8 motels and what a brand used to mean and what they mean today. While I think review sites will lead to greater recognition of unbranded businesses thanks to a leveling of the playing field in the marketplace (a Yelp review for a Super 8 looks exactly the same as a bed & breakfasts, for ex.), I think we’re underestimating a large brands ability to adapt. A company like Super 8 has a lot of corporate money and resources at its disposal. While a 30-second spot may not change someone’s opinion of a specific property with poor ratings, once the parent company eventually figure out this new social media climate (I assume they do, or else failure is inevitable,) I think you’ll see the power of branding surface again.
very well written keep up the good work
I think that TripAdvisor is a controversial business. Somehow, it forces the brands into an ecosystem they don’t have any control of. It is an unfair way of making money, since one of the two necessary parts -the brand- didn’t choose to be listed and exposed to lies and fake reviews. TripAdvisor do not even make the basic required security measures to avoid getting overflowed with fake reviews. But the real issue is that those fake virtual reviews have a non-fake real cost on the targeted brand. Who is paying for the damages of the diffamation? TripAdvisor certainly is not…
The only logical thing to happen is a massive class action suit. Nor TA not anyone else should publish anything without a proof of purchase or a serious method of validating the reviews.
Ramiro – I think your criticism of TripAdvisor is valid. I personally have had good experiences with TripAdvisor’s reviews, but I recognize that some are fake and otherwise problematic. That’s why it’s so important that TripAdvisor is starting to use Facebook-connected reviews. It gives a sense of legitimacy and transparency to the comments.
well I can’t say I’m especially interested in my friends’ reviews. I trust the so called “experts” on tripadvisor more. the advantage of the internet is you can crowd-source, and no longer need to rely on the opinions of just the few dozens of people you know in real life. I think there’s a lot wishing thinking in the power of social, asking your friends is sort of pre internet you know.
Why are you giving marketing people pointers? Like Bill Hicks says:By the way if anyone here is in advertising or marketing… kill yourself.
watch bill on marketing link:
http://www.youtube.com/watch?v=gDW_Hj2K0wo
Great point about asking happy customers to be your ambassadors to the public. Those who have used your product or service are the best way to win over savvy shoppers. When they see positive reviews from people they know, all the better. Very well said Nathan!
Well said!
Having worked in hotels for over 20 years, I have come to the understanding that tripadvisor is not as trusted as you may think. First of all, one person’s experience will not be that of all guests. Secondly, most hotels have a tripadvisor watchdog, that is to say, an associate that watches the site and, for each bad review, will post a bogus good one. Its sad, but true!
Good point. Do I really trust reviews for a hotel on TA when the reviews are just another marketing channel for a hotel? Best I can do sometimes is get a sense of “how bad” a hotel might be based on the negative reviews which may have a greater chance of being authentic. Then I have to take those with a grain of salt knowing that some travelers simply like to complain or have very different standards, expectations or tolerances.
I will be interesting to see how Google +1 plays out for hotels. Will I trust reviews from friends more than strangers? Depends on the friend.
Really interesting article with plenty to think about – everything is branded of which TA is a well known one. ‘Trust’ is important and the links there to establish some integrity are essential. However, we have to remember that one man’s idea of paradise may not be another’s; the speed of information transfer is fantastic but so are trends.
We did a study into this in one of my classes and came out with this: although people look online for information on products and services, they still highly value official opinions. Thus, the Internet allows for the rapid and widespread gathering of information, but I believe people will still check their sources in most cases. Or put another way, information and rumors can spread, but they will remain rumors until a noticeable and respectable voice comments on it. Hopefully after doing research into the validity of the issue.
This is a great article and congrats on your early successes. I think you clearly delucidated some of the Big trends/shift that are shaping the current development of eCommerce. Clearly, this is only the beginning and I believe the issue of “trust” goes beyond mere commerce. Given the ease with which millions of fake profiles, reviews, etc can be created with the push of a button – I take solace in the idea that we can reclaim this feature and ensure that the technological conduits through which we connect remain human-centered. Stik sounds like a great step in the right direction.
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.
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
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.
Great article!
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
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
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
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.
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.
Some extra analysis on the Stik blog: http://blog.stik.com