Buyers looking for tech products are increasingly utilising social media page ratings and reviews to decide what to spend their hard earned cash on. Because of this, market research firm Gartner sees enterprise spending on paid social media ratings and reviews increasing, to the point where it will make up 10-15% of all reviews by 2014.

However, the company’s analysts further predict that due to increased media attention on fake social media ratings and reviews, at least two Fortune 500 brands is to face legal action from the US Federal Trade Commission (FTC) over the next two years.

Firms looking to enlarge their social media footprint

Jenny Sussin, senior research analyst at Gartner believes that with more than half of the internet’s population is using social network sites, businesses are always on the lookout for new methods of boosting Twitter follower bases, upping YouTube video hit tallies, obtaining more positive reviews than their rivals and soliciting more ‘likes’ on Facebook pages.

Sussin added that a lot of marketers have started to pay for positive reviews with cash, coupons and promotions in an attempt to have their products reach a bigger audience for more potential sales, augment their brand image, increase customer loyalty as well as client advocacy through social media “word of mouth” campaigns.

Gartner stated that firms who pay for phoney reviews expose themselves to public condemnation as well as monetary fines, since the FTC determined in 2009 already that paying for positive reviews, without disclosing that the reviewer had been compensated equates to deceptive advertising and would be prosecuted as such.

“Marketing, customer service and IT social media managers looking to use reviews, fans and ‘likes’ to improve their brand’s reputation on social media must beware of the potential negative consequences on corporate reputation and profitability,” warned Ed Thompson, VP and analyst at Gartner.

“CMOs will need to weigh the longer-term risks of being caught and the associated fines and damage to reputation and balance them against the short-term potential rewards of increased business and the prevailing common business practice in their market, often regardless of ethics,” explained Thompson.

A new reputation niche

As a result of the FTC taking on companies who make use of fake reviews/ratings, Gartner states that some reputation management companies have begun to identify fake and defaming reviews and requested the reviewers or host site to remove these or face legal action. The analytics firm’s analysts expect new niche to emerge with specialist brand management firms handling reputation defense instead of merely reputation creation.

Gartner believes that although consumer trust in social media is currently low, the average buyer’s perceptions of tightened government regulation as well as increased media exposure of fake social media ratings and reviews, will boost consumer trust in new and existing social media ratings and reviews.

“Organisations engaging in social media can help to promote trust by openly embracing both positive and negative reviews and leveraging negative reviews as a way to encourage customers with positive product or service experiences to share them on review sites as well. They should also respond to ratings and reviews in an official capacity to demonstrate willingness to engage in productive conversation with anyone,” Sussin concluded.

In related news, Gartner also recently revealed that free apps will account for 89% of the total downloads made by mobile device users during 2012. The company expects global mobile app store downloads to surpass 45.6 billion this year, with free downloads accounting for 40.1 billion of that total, whilst paid-for application downloads will amount to around five billion.