The Praized Blog

In the last ten days, I have actively started using Twitter (you can follow my tweets here) and have a written a bunch of personal notes about how I think “Twitter is the new Facebook”. I can’t wait to write that blog post but I don’t have time to write it today (this week?). One insight: here’s one way Twitter intersects with local search:

Wow! Local merchant reviews and micro-blogging. You can find the original tweet from Tantek here.

Today’s New York Times has an article on hotel and restaurant reviews. They mostly talk about TripAdvisor and IgoUgo (which I had never heard of until today) and compare them to Zagat. Most of the information in there has been thoroughly discussed before (user reviews vs. editor reviews, moderated vs. un-moderated comments) but one quote from Tim Zagat (Zagat’s co-founder) really stood out for me. Talking about consumer reviews, he said:

“Some Internet companies are running into the problem that anybody can throw up things on the wall, and after a while there are just too many people doing it.”

What it means: Tim Zagat is onto something. He doesn’t express it that way but it’s all about reviews from “trusted sources”. A trusted source could be, for example, a pro reviewer/critic (aggregated in sites like Metacritic.com), a friend or someone from an affinity group (or trusted community). Some of the travel and review sites out there suffer from a lack of “trusted sources” and it’s the reason why we often feel like there’s too much information to process when we see hundreds of reviews for a hotel or restaurant. Why would I trust travelingmom526 or baroudeur2004? If they’re not direct contacts, how do I know if they have the same taste as me?

Are user reviews important in local search? Data from the latest Kelsey Group/comScore survey presented today by Brian Jurutka from comScore seems to indicate it is critical from a user point of view as 24% of online consumers have used an online review site prior to buying an offline service in the last 3 months.  In addition, more than 75% of those review-informed purchasers cited online reviews as influential in their purchase decision process.

Why are consumer reviews influential?

• They are seen as unbiased 3rd party feedback
• They are efficient
• They provide an opportunity for feedback

Who writes reviews?

• Broadband users, young professionals, 25-49. 46% of review users have contributed a review as well.

Why do consumers write reviews?

• Helps other consumers (62%)
• Gives me “consumer power” (44%)
• It’s a fun activity (33%)
• It helps me “get back” at a provider after experiencing poor service (24%)
• I was compensated to do it. (19%)

Other highlights:

• Better reviews drive higher revenues. Consumers were willing to pay 20% more for services that were rated 5 stars vs. 4 stars.
• In addition, a significant portion of people were not willing to purchase from a 1-star place.
• 97% believed the review was accurate post-sale.

Update: the official press release.

Continuing in the same vein as yesterday, eMarketer presents the results of a Deloitte survey that shows that 62% of US internet users read online reviews.

Other highlights:

• “Virtually all shoppers now find them credible” (99%)
• “More than eight in 10 (82 percent) say their purchase decisions have been directly influenced by the reviews, either influencing them to buy a different product than the one they had originally been thinking about purchasing or confirming the original purchase intention.”
• “While the percentages were slightly higher for the younger generations, all age groups are reading and acting on online reviews at significant rates.”
• “The reach of consumer reviews isn’t limited to the online world; seven in 10 (69 percent) consumers who read reviews share them with friends, family or colleagues, thus amplifying their impact.”
• “Deloitte conducted a separate study in August with Sterling Commerce and found that 42% of US online shoppers thought that featuring consumer reviews on Web sites increased consumer trust in the sites—and presumably the products therein.”

What it means: we’ve known for a while now that online word of mouth plays a major role in product/service buying decisions but I like the added data of age groups being all equally active and the fact that online reviews are “sneezed” back into the offline world. This really shows their importance.

Nielsen just released the results of their Nielsen Online Global Consumer Study (found via Eric Baillargeon’s blog). In it, “Nielsen (…) surveyed consumers on their attitudes toward thirteen types of advertising - from conventional newspaper and television ads to branded web sites and consumer-generated content.” Excerpts:

The Nielsen survey (…) found that while new platforms like the Internet are beginning to catch up with older media in terms of ad revenues, traditional advertising channels continue to retain the public’s trust. Ads in newspapers rank second worldwide among all media categories, at 63 percent overall, while television, magazines and radio each ranked above 50 percent. (…)

Although consumer recommendations are the most credible form of advertising among 78 percent of the study’s respondents, Nielsen research found significant national and regional differences regarding this and other mediums. Word of mouth, for example, generates considerable levels of trust across much of Asia Pacific. Seven of the top ten markets that rely most on “recommendations from consumers” are in this region, including Hong Kong (93%), Taiwan (91%) and Indonesia (89%). At the other end of the global spectrum, Europeans, generally, are least likely to trust what they hear from other consumers, particularly in Denmark (62%) and Italy (64%).

The reliability of consumer opinions posted online - which rated third, at 61 percent overall - also varies throughout the world, scoring highest in North America and Asia, at 66 and 62 percent respectively. Among individual markets, web-based opinions such as Blogs are most trusted in South Korea (81%) and Taiwan (76%), while scoring lowest, at 35 percent, in Finland.

What it means: a few weeks ago, I blogged about the fact that word of mouth might actually be the biggest opportunity directory publishers have seen in the last few years given that the Web was becoming a big word of mouth machine. These numbers clearly show that i) traditional word of mouth is still the most trusted source of advertising and ii) online word of mouth is not far behind. It’s also interesting to note the differences in the various geographical areas.

source: XKCD.com

It looks like the US version of 118.com is now available in soft launch. You can search for both business and residential data in the New York area and see web site thumbnails. The about us section says the site will offer ratings and reviews but I haven’t seen any yet. 118.com is owned by InfoNXX, a directory assistance supplier in various countries including The Number 118-118 in the UK, Le Numero (France), Il Numero (Italy), Die Nummer (Switzerland), and Conduit (Ireland).

What it means: the web site is not really differentiated from other US local search site and the brand is not very well known in North America (118 is the equivalent of 411 in the UK and France). Is it the first volley before the introduction of a US-based free 411 service from InfoNXX?

(via the Google Lat-Long Blog)

Google Maps has offered a collection of reviews assembled from some of the finest sources on the web for some time, but now we’re augmenting those with reviews from an even better source: you — and, we hope, millions of other opinionated Google users. Search for your favorite places and click on the “More Info” link. From there, click on “Write a Review” to start giving your two cents.

What it means: user reviews in a local search site environment are becoming more and more a must-have feature. You should be looking at it if you operate in that space. By the way, this new Google Maps feature means that they are slowly moving from a content aggregation strategy to a content creation strategy in their local search section.

At the EADP conference last week, I had the chance to listen to a great presentation by my friend Christer Pettersson from Eniro, the Nordic Countries directory publisher. Their online strategy has always been very progressive but this presentation has convinced me that they are amongst the most innovative directory publishers worldwide.

Here are the highlights:

• They’ve introduced moderated reviews and ratings within their directory site a year ago with great success. They want this database to become a new competitive advantage that cannot be easily replicated by competition. They offer an opt out for merchants who don’t want it but very few have done it. Some advertisers even include their review scores within their print ad! Users love it.
• They now offer free user-generated classifieds
• Eniro acquired 50% of Bubblare.se, the Swedish YouTube. They’re placing a bet on the explosion of online video advertising and want users and advertisers to upload videos.
• They want to encourage tagging
• They want people to upload pictures and are introducing picture navigation
• They want users to update/improve their residential listings
• They’ve launched a corporate blog

Update: just before publishing this post, I received news that Eniro had acquired Krak.dk for 400M DKK ($72M). According to what I’m reading (my Danish is quite poor…), Krak.dk is one of the leading local search and mapping site in Denmark.

What it means: Eniro has clearly decided they would experiment with all sorts of Web 2.0 applications and features within their network of sites. Kudos!

Yesterday, I had the opportunity to co-host the interactive session here at the EADP conference in Barcelona. Participants (about 90 people grouped in 16 teams) were asked to do a blind wine tasting exercise and submit comments & ratings about eight Spanish wines. The comments were appearing in real-time on a giant screen in the room. At the end, the various teams had to vote for their top 3 wines and try to guess their price. At the same time, we had a wine expert from our industry, Trevor Fenwick, who was tasting the wines and coming up with his own comments and ratings. At the end, we compared the expert’s view vs. the opinion of the group to prove the concept of the wisdom of crowds.

It was a great session, combining Web 2.0 and wine tasting! I called it Crowdtasting… We had a whole range of wine tasting comments going from very serious and relevant comments, to single words (still relevant) to silly messages and even spam(!?!). This clearly showed that moderation might be needed in user reviews. And did the concept of wisdom of crowds pass the test? Yes, the group and the expert agreed on 2 out of top 3 wines. I had a great time and a glass of the best-rated wine at the end. If you’re curious, that wine was Scala Dei Cartoixa reserva tinto - Priorat - 2003.