August 17, 2018 / James Hughes
Plenty of companies actively try to get positive reviews for their products. 9 out of 10 dentists aren’t recommending a brand of toothpaste out of the goodness of their hearts, after all. Paid referrals have been a part of the marketing business since the beginning. But in the age of social media, have the rules changed? Would there be backlash against social media leaders who are paid to give referrals or reviews?
Shi & Wojnicki (2014) examined the impact of paid reviews (extrinsically motivated) vs. unpaid reviews (intrinsically motivated). They found that social media leaders, by and large, do not refer or review products online without some form of compensation, and that there is minimal backlash from the public when seeing a paid review versus a non-paid one. They caution, however, at using this strategy too often, as it could eventually erode the value of the referrals if overdone.
Advice for Managers:
Shi & Wojnicki had the following advice for managers:
Online leadership is important, and referral campaigns should offer tangible rewards to online leaders
Referral rates are significantly higher when rewards are given
Opinion leaders may have enough of a social reputation that they are unharmed when giving paid referrals
Thanks for reading,
Shi, Mengze & C. Wojnicki, Andrea. (2014). Money Talks … to Online Opinion Leaders. Journal of Advertising Research. 54. 81-91. 10.2501/JAR-54-1-081-091.