ReviewMe.com, a Business Model With Nowhere to Go

A brand new business, ReviewMe was launched yesterday with a model to help bloggers monetize their blogs by reviewing various advertisers' products and services.  This model is quite similar to the controversial model recently introduced by PayPerPost which is also promising to monetize bloggers' posts.  However, there are several significant differences between the two models.

The main reason for controversy behind PayPerPost's model is that PayPerPost:

1.  Allows advertisers to reject paying for bloggers' posts based on what they write.  This effectively encourages bloggers to only write positive reviews or risk that they will not be paid.

2.  Does not require bloggers to disclose that they are being compensated.  PayPerPost recently launched DisclosurePolicy.org, an organization devoted to setting industry-wide guidelines for disclosing how bloggers are being compensated for their posts.  However, no requirement to disclose is required by PayPerPost, thus potentially leading blog readers to not be aware that the writer's bias may be based on compensation rather than by genuine, impartial motives.

On the other hand, ReviewMe has taken a vastly different approach to compensating bloggers.  Namely, ReviewMe requires that:

1.  Advertisers pay for product reviews ahead of time, with no guarantees that review will be positive, but only that it contain 200+ words, and   

2.  Bloggers explicitly disclose that they are being compensated for their posts.  While this condition is widely talked about on various blogs (see below) and even mentioned on the ReviewMe's own blog, I could not find this requirement anywhere in ReviewMe's Terms and Conditions.  Not sure that being mentioned in a blog entry is good enough to make it policy; however, I'm sure this is just an oversight and ReviewMe will address this in their T&C's asap.

On the surface, ReviewMe has addressed all of the controversial aspects of PayPerPost and has received a warm welcome from a number of influential pundits in the blogging community, some of whom have been quite critical of PayPerPost:

• ReviewMe Launches: A Better PayPerPost by Michael Arrington / TechCrunch
• ReviewMe.com Launches With A Model That Makes Sense by Jim Kukral / ReveNews
• ReviewMe Launches by Darren Rowse / ProBlogger

Despite the welcome ReviewMe has received, I see significant and critical problems with their business model that makes ReviewMe effectively dead on arrival.  Let me analyze all of the reasons for my conclusion:   

1.  What advertiser is willing to pay for a product whose quality they cannot review ahead of time?  While PayPerPost gives advertisers ability to review the final product before agreeing to pay, ReviewMe takes this critical component away from the advertiser.  Besides, the fact that advertisers do not want to pay for negative reviews, ReviewMe does not offer any guidelines as to the quality of the review the blogger needs to provide (only the quantity of words).  What happens if the blogger only casually mentions the advertiser's product while discussing something else?  What if the advertiser's product is not even mentioned? While this lack of advertiser oversight is touted as a "feature" by ReviewMe and is certainly to keep it out of the controversy, this lack of "customer (advertiser in this case) is right" attitude will cost it in the eyes of the very group it needs to recruit to be successful.

2.  Forcing bloggers to disclose in each ReviewMe post that they are compensated for making the post will automatically minimize the buzz behind any positive mention of the advertiser's product.  In the eyes of readers, any disclosure of a writer being compensated for the post will automatically discredit the review due to perception of bias, even if no such bias exists.  Besides building scepticism behind the product being advertised (umm, reviewed), this disclosure will also discredit the blogger, raise bias allegations, and potentially affect overall trust placed on him/her by the readers.  No reputable blogger will risk losing his audience by even remote appearance of impropriety.  For example of this, see comments Darren Rowse made in his post I mentioned above regarding him not willing to accept payment from ReviewMe.

3.  By forcing advertisers to pay whether review is positive or not, ReviewMe addresses perception of bias on paper without eliminating any actual effect on bias that exists with bloggers using the PayPerPost model.  When advertisers review potential blogs from which to solicit a review, of course, they will read through history of that blogger's posts.  If the blogger has history of negative reviews, advertisers will automatically shy away.  Thus, bloggers will clearly recognize that while they will get paid for the current review, whether positive or negative, their ability to get paid for future reviews will be greatly impacted if they write negative reviews.  Thus, they will tend to stay on the positive, exactly the same way they would be with PayPerPost.

4.  ReviewMe pays bloggers based on popularity of the blog.  For some reason that was not documented on the ReviewMe site, ReviewMe will automatically reject bloggers if they do not meet certain criteria.  They are told to "come back in a couple of months". However, no specific reason is given to the blogger and the blogger does not in fact know what criteria he/she did not satisfy. This approach makes no sense.  ReviewMe again takes decision out of the hands of the advertiser and imposes its own constraints, potentially eliminating opportunities for advertisers and bloggers to interact.  Instead, ReviewMe should allow any blogger in and let advertiser decide whether to request a review from them.

By focusing on addressing the perceived controversy surrounding PayPerPost, ReviewMe has forgotten to address some elimentary business model issues that any company has to have in its business plan.  On the other hand, I clearly see value proposition in the PayPerPost model to both sides, advertisers and bloggers and see it as a better business proposition. 

As far as all the controversy behind PayPerPost encouraging bloggers to "lie" in their posts, I refer to my previous post, Should Bloggers Disclose That They Are Compensated?.     Bias always exists, whether disclosed or not.  Being compensated for the post does not in any way mean that a blogger is not honestly recommending a product they have evaluated and found useful.  Just as not disclosing compensation does not automatically     dupe the reader, disclosing does not automatically mean the writer is biased.     Credibility of the blogger is built on consistent, interesting, thought-provoking perspective, based on months if not years of publishing.  If I respect a blogger, I will not mind if he is compensated.  And he doesn't need to tell me.  I will trust that this blogger will not want to ruin his reputation which had taken years to build over building bogus positive reviews based solely on getting token compensation paid him by the advertiser.

Gene Kavner, Former World-Wide Director, Amazon Associates Affiliate Program, 2005-2006.

Comments

[Bob Caswell]

Gene,

I appreciate the fun little exchange we're having here. You've asked some pretty tough questions which don't necessarily have simple answers. ReviewMe is far from perfect, and I do wonder what the company's fate will be. But in the mean time, I hope you don't mind me responding to your response:

"This is not a scalable solution."

What about a hybrid model? Meaning, ReviewMe audits X percent of posts at random. It wouldn't be too difficult to use a statistical model to figure out what minimum sample size x would be needed in order to be 95 percent representative of the population (the population being all the reviews). Worst case scenario, ReviewMe would at least have an idea of what is happening with the population (total reviews) by analyzing the sample while best case scenario, it would provide just enough moderation to minimize gaming of the system.

"Therefore, if a disclosure is made, an average reader such as Michael will automatically assume bias..."

The irony, of course, being that Arrington has already made numerous reviews (with disclaimers) of products/services with which he is affiliated in more ways than one. It hasn't seemed to stop his success or limit his readership.

"Because disclosure of being paid is required, it is likely to be simple to search for the author of the blog where such a disclosure was made...I would have certainly done that as the Director of Amazon Associates."

I'm not sure I understand the first part. Do you mean "simple to search" from within ReviewMe's site? As in, ReviewMe giving advertisers a nice interface to easily see each blogger's past reviews? That would be interesting... But so far it looks like the only way to search previous reviews would be to search for them within each blogger's site itself, something much more time consuming and tedious. But if ReviewMe does organize and package that information nicely for advertisers, then it would be interesting to see how advertisers would measure/use it.

I have to defer to your past experience at Amazon for this one... At one point does due diligence become a waste of time (if ever) in such cases? How many past reviews of any given paid blogger would you need to read to get an accurate measurement of the blogger's positive to negative ratio? And what ratio would be acceptable (assuming, of course, the simplified model of only two types of reviews: "good" and "bad")? It just seems like there will be so many nuances and contexts to keep track of when reading other reviews by the same blogger. There are too many variables (one being the product itself being reviewed). Without some pretty hefty extrapolation (read: assumptions), I don't foresee advertisers doing a very good job of predicting the outcome of any given review. I mean, a multi-variable regression model would have a hard time predicting the outcome, let alone some advertiser's gut check.

And what about the old saying of any publicity is good publicity (or however it goes)? For example, everyone wants good ol' Walt Mossberg of the Wall Street Journal to review their product regardless of the 50/50ish chance of positive or negative (though again, he rarely is so one-sided, usually his reviews are more "gray"). Do advertisers prescreen his past reviews before submitting their product to him for review? I seriously doubt it. He may not be compensated directly for the review, but the model is indirectly the same: He is paid to review products without bias and gets advertisers flocking to him. Why can't this translate to advertisers flocking to certain unbiased high profile bloggers in the same way? I guess I'm not necessarily convinced that just because in the old model there's a little more distance between reviewer payment and the advertiser, the whole thing is so different.

"There is no reason to believe that small sites in any way dilute the quality of the network."

I guess I was working under the assumption that advertisers would be grateful for a network that allows them to pick perhaps ten bloggers to reach 100,000 people (or whatever). But would any advertiser really want the "luxury" of micromanaging their reach potential via singling out hundreds or even thousands of "good" review sites with limited readership? That could take the better part of a month just for one aspect of one part of the marketing mix for one product. It's akin to advertisers going door to door to find people who would only promote the product to their family and maybe some friends. I just thought having a minimum level in this case actually helps the advertisers accomplish their goals more quickly and efficiently.

[Gene Kavner]

Bob -- thanks for your thoughtful comments and participating on my blog. Let me quickly address them.

1. "Before the blogger gets paid, the ReviewMe crew supposedly reads over the review to make sure it's adequate in more ways than one."

This is not a scalable solution. With thousands of advertisers and hundreds of thousands of blogs, it is simply not practical for ReviewMe to hire people to read every single post to ensure it qualifies for payment. Guidelines for what constitues "adequate" is fuzzy at best and cannot be consistently enforced across the board. The only solution for ReviewMe is to automate the process which creates the problem I discussed of potentially poor and possible off-topic reviews.

2. "it's almost like saying that blogs without ads are "automatically" taken more seriously. We'd like to think so, but I don't think readers have such a cut and dry system when evaluating content."

Controversy behind PayPerPost arose because PPP bloggers do not disclose receiving payment for their post. The reason why this was a problem for Michael Arrington of TechCrunch in particular was that he perceives bias in any review where the review was paid by the subject of such review (even if no such bias exists, which is impossible to verify). Therefore, if a disclosure is made, an average reader such as Michael will automatically assume bias causing both blogger and the subject of the post to lose credibility.

3. "First of all, are advertisers going to read through your entire archives to figure out what is positive and what is negative?"

Because disclosure of being paid is required, it is likely to be simple to search for the author of the blog where such a disclosure was made. Any responsible company with a marketing budget will certainly do due diligence on each source of potential reviews of their product. I would have certainly done that as the Director of Amazon Associates.

4. "But allowing "any blogger" dilutes the quality and extent of readership of the system."

Google pioneered the concept of allowing practically ANY site on the Internet to participate in its AdSense system. There is no reason to believe that small sites in any way dilute the quality of the network. Since the advertiser has to explicitly request review from the blogger, as long as information on the blog is available to the advertiser, ReviewMe should not make a unilateral decision that such an engagement is against policy.

Thank you again for your thoughts!

Gene Kavner

[Bob Caswell]

Hmm... I'll respond here and at Computers.net. I think you bring up some valid points even if in a relatively extreme context.

1) "What happens if the blogger only casually mentions the advertiser's product..."

Before the blogger gets paid, the ReviewMe crew supposedly reads over the review to make sure it's adequate in more ways than one. "Casually mentions" probably would merit ReviewMe rejecting payment until a more substantial reference is made. Perhaps this should all be in the terms of service, but I think it's implied by the fact that you don't get paid until your review is reviewed.

2) "Forcing bloggers to disclose...will automatically minimize the buzz behind any positive mention"

Yes and no. I'm not ready to say "automatically" in this case; it's almost like saying that blogs without ads are "automatically" taken more seriously. We'd like to think so, but I don't think readers have such a cut and dry system when evaluating content.

3) "...blogger has history of negative reviews, advertisers will automatically shy away."

First of all, are advertisers going to read through your entire archives to figure out what is positive and what is negative? And it's almost as if we're assuming that everyone who signs up with ReviewMe will stop what they were previously doing and only write reviews for ReviewMe. For my part, I post something nearly every day, sometimes multiple times a day. If a paid review with full disclosure is here or there, how would an advertiser know where to look without reading half my blog?

4) "ReviewMe should allow any blogger in"

I disagree. We can talk about what may or may not be the appropriate minimum level. But allowing "any blogger" dilutes the quality and extent of readership of the system. Besides that, blogs are started and stopped every day. Advertisers won't necessarily want to sift through blogs created yesterday that only have family member readership. Having some sort of minimum creates credibility which attracts advertisers.

Overall, I don't know if the business plan will work out, but I don't think it's fundamentally flawed. I think blogger and advertiser behavior is hard to define. The results will tell us how it works much better than our over-simplified hypotheticals.

[goggleBOX]

I can not access the reviewme.com web site to confirm either way but in point three you mentioned a suituation where advertisers might reject blogs based on past reviews. Do advertisers have this level of control that they can they select which Reviewme bloggers are allowed to review their product? You again mention this level of control for advertisers in point four (last sentence).

I think most advertisers would not want this level of control in the first place, at $20-$50 a review it would not be feasible for advertisers to review every blog that MIGHT be included in a $25,000 advertising campaign. This is why they are picky about who they let into the Reviewme program (point 4). Blogs that have proved themselves successful will be allowed in while small/untested blogs will be kept out so as to raise the average level of professionalism of Reviewme reviews. This will raise the respect afforded to Reviewme from both advertisers and readers.

I don't think Reviewme would allow advertisers this level of control while also allowing anyone who owns a blog to join. This would undermine the very concept of the system which is to make an indirect link between advertisers and the blogsphere. If Reviewme allowed this level on control advertisers would soon realise that Reviewme adds no value to their advertising dollar. By providing a restricted pool of professional bloggers Reviewme takes the leg work out of finding bloggers to pay for reviews. If anyone could join Reviewme advertisers would soon start approaching bloggers directly to save paying the middle man

[K. Adam Christensen]

There is something incorrect about your PayPerPost workings. Advertisers can not reject a post after it's been written. The process works as following:

1. Advertiser creates a set of restrictions for a blog to follow: 50+ words, it's to be neutral, the article must link to a certain page.

2. A review team at PPP looks over the opportunity to make sure it's on the up-and-up

3. A blogger writes about the opportunity and then submits it to be reviewed.

4. A neutral PPP reviewer looks over the blog to make sure that the requirements have been met. NOT the advertiser.

Another notch to go against ReviewMe is that there is no assurance to advertisers that the post will be live for "X" amount of days.

[Joel]

Very interesting post Gene, well thought out. Point 3 regarding ReviewMe is something that I was interested in too. They clearly have a business model if they're giving away $25,000 (although half of that seems to go to them unless I'm mistaken, as it's for reviews of ReviewMe and they get 50%), so it will be interesting to see how many blogs are on there in a few months time.

[Philomena Ojikutu]

You have brought to the fore again and again the question of the uncompromisable independence of a blogger. In our quest for commercial blogging.

I remembered being 'spanked' recently by my loyal subscribers for posting an article about Kevin Rose on my blog. I did it for traffic surge from Digg's awesome traffic, not necesarily for money.

You are best left to imagine what would have happened to me if I had posted an article for money, promoting any product that has no relationship with my blog's niche.

Its painful but right to stay on course. Whatever income Google Adsense, other PPC and other affiliate marketing campaign cannot fetch your blog should remain in the shadows without provoking the ire of your loyal subscribers and readers.