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Fig. 1: Payola and Editorial Sales Breakout -- We noted a strong corelation between sites that used editorial staff as sales, and sites that were willing to take cash in exchange for editorial content.

Fig. 2: Online Payola against Publication Age -- Older and younger sites tended to refuse advertising and cash in exchange for editorial content.

Fig. 3: Online Payola against Region: The only English-speaking country that did not report any Payola was Australia. Payola was fairly uniformly spread across the rest of worldwide English publications.

Fig. 4: Online Payola against Size: Larger, professional websites didn't accept payola. Smaller, hobby websites showed no interest in payola. Sites in the 5 million to 10 million pagehits per month range were the most suspect.
A three-month study of the online technology publication industry uncovers pay-to-review tactics, viral marketing and a few beacons of light

During the 1960s a new term was born into the music industry: Payola. A combination of the words "pay" and "Victrola," payola represented an increasingly large problem in the music industry: record companies paid radio stations to play and promote new records.

The immorality of paying radio station disc jockeys to air music did not become apparent until investigations by Federal Trade and Federal Communication Commission. Several deejays from the era were eventually found guilty of commercial bribery charges and deliberate legislation was eventually proposed, and sanctioned, that specifically banned the practice of payola in the U.S., with stiff consequences.

Title 47 of the United States Code details specific federal legislation for radio, telegraphs, communication satellites, and cable TV, but it does not address similar payola schemes with regard to internet publications. There are no legal ramifications for online publications that accept profits in exchange for pay: online payola.

Jasper Schneider, owner of enthusiast hobby site Sudhian.com and a practicing attorney at Schneider Law Firm, reflected on his experience in dealing with advertisers and his legal background.  "Without any uniform ethical standards or statutory law governing the online publications, online payola certainly exists.”  He continues, “If it doesn’t exist expressly, it is often implied when dealing with certain advertisers.”

Over the past three months, DailyTech put together a series of faux companies, product portfolios and trademarks.  In a combination of phone and email correspondences, our team of journalists set out to find illicit and unethical review behavior in the English-print, computer hardware review industry. 

Specifically, these journalists looked for publications that were:
  • Willing to sell advertisements (receive funds) in exchange for publishing content.
  • Willing to sell advertisements (receive funds) in exchange editor's choice awards.
  • Willing to offer viral marketing in exchange for cash and resale hardware.
Manufacturers pressure publications from all sides when attempting to secure headlines and positive reviews.  No money actually exchanged hands during this analysis, and the working relationships lasted less than a week.

There are approximately 150 circulated English-print technology websites; our team specifically targeted the 35 largest publications.  We determined the size of these publications via Alexa’s online index and publication-supplied web statistics.  DailyTech was included among this list.

Of 35 online computer-related publications, 23 (66 percent) refused editorial influence in exchange for advertising. Of remaining 12, seven publications (20 percent, Fig. 1) agreed to editorial service in exchange for advertising or cash.

To the credit of all publications surveyed, no website would accept additional funds in exchange for award.  However, it should be noted that our team discovered several instances of questionable ethics in a very short time span, without even supplying the publications product or payout.

The following response from an editor who also acts as the sales representative is an excerpt from a publication that represented the typical response of all border-line publications:
"The people who do sponsor the site, who advertise and keep good relationships with us, they will get priority on reviews. So if we get a motherboard in from you guys and one from company X, and you advertise and company X does not, we'll review your product first or more in-depth or at the launch time, which ever would get the most exposure. It doesn't really affect the content of the review exactly, but it definitely affects whether or not we'll spend the extra time with it."
14 of the 35 sites polled used independent sales teams: editorial staff is not responsible for advertising content at these publications (Fig. 1).  All sites that used separate sales staff would not influence editorial content even when tempted with several thousands of dollars of advertising perks and free hardware.

Adam Eiberger, a non-editorial sales representative from The Tech Report, parlayed the most succinct argument.  After an offering of several thousand dollars worth of advertising, in exchange for a news post and review, Eiberger responded:
"We have a real strong policy at The Tech Report of what we like to call separation of church and state, where essentially the editorial content is separate from the marketing and the advertising ... you are not going to be able to buy a review or an article.”
Four external sales teams represented 11 of the 35 sites polled.  Each sales team refused our requests for additional content and illicit reviews. 

Website age demonstrated significant impact for payola (Fig. 2).  None of the five publications founded before 1998 would accept any form of compensation in exchange of content. Granted, it should also be noted that these older publications all used non-editorial sales representatives.

Geographical region showed little to no impact for online payola (Fig. 3).  By volume, the highest number of online payola came from North America, though it should be noted that the majority of English-print publications are also found in this region.

European websites also had its own examples of online payola. The following is a conversation between DailyTech intern Gabriel Ikram, posing as a sales agent for a motherboard company, and an editorial contact for a publication:
Ikram: "We'd be willing to pay a little more for ads if you can get us some articles on ******"
******: "Ok, I can help arrange that."

Ikram: "If we could spend a little more money [on ads] could you get us maybe a couple more articles?"
******: "Yeah, that's fine, that's fine."
An executive from Kreative Wave, Inc., a third-party public relations firm, emphasizes the baleful business of soliciting press. “These companies, they’re always looking for exposure,” she states.  “And the websites take advantage of that.  They do reviews; they want something nice.  That something nice is advertisements or hardware.”

Website size also showed some impact on payola trends (Fig. 4).  When divided into fifths, payola only occurred in the middle three-fifths.  The media size of these publications was approximately 5 million to 10 million page hits per month.

The following is an email response from an editorial sales contact representing another website:
"Also let me know about the $1,500-$3,000 per site as that money does go a long way for us! We'd be more than happy to give you 2 to 3 months of advertising and the review in exchange for that!"
It’s easy to see why payola can damage the industry as a whole, as well as enable a slippery slope of downward ethical spiral.  During the investigation, three publications – all of which had already agreed to some level of online payola – were willing to pose as non-staff forum members and hype the upcoming product at the publication’s Internet forums.

Once presented with the data for this article, Schnieder paused before responding. “I think if you look back even five years, you would have seen this type of thing be much more common than it is today.”  He concludes, “Like most things, the marketplace will eventually weed out the businesses and websites who choose to operate in this manner.”


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Much ado about nothing?
By reviewer on 6/6/2007 2:26:30 PM , Rating: 2
As a reviewer for a small specialty site, I found the article (and some comments) to be interesting, but for to a significant degree, irrelevant or misleading. I might better define misleading as "today's politically correct spin".

There is a significant flaw in the logic and conclusions, that I would like to address.

The key point is this. Payola, or the "perception" of payola, is not the issue.

The only issue should be the accuracy of the reviews themselves.

Few user reviews have the ability to produce the important information that professional reviewers have the ability to provide.

Now, I will concede that user reviews are great for dealing with technical flaws in products, or particular strengths, but rarely can they be useful in comparing products, because users rarely have access to multiple products.

Afterall, let's consider the whole motherboard review world. If there are 50 motherboards out there for review, and the typical user only ever uses one or two, or even three, how can they possibly determine which is the best motherboard.

Even the professional reviewer, won't get to them all, but might work with 20. And, because of that work, have more working knowledge, etc.

The key point is, regardless of payola (which is very loosely defined, and some of it may be insignificant, or irrelevant), the issue is: ARE A PUBLICATION'S REVIEWS ACCURATE? Had the article brought in experts to see the correlation of accurate reviews to payola, now that would have been something. Wouldn't it be interesting if some of those considered to having accepted "payola" turned out to be the best review sites. That's an issue totally ignored.

If a site's reviews are accurate, that is the bottom line. Nothing else should matter to the reader of the reviews.

Since user reviews are limited in their abiltiy to compare products and provide insight - therefore, as to what are the best products, due to lack of exposure, then, for the purposes of this discussion, the user reviews serve best as a check to validate professional reviews.

Also, I would guess that users tend to be far more biased - they generally rave about what they own.

Forums are good places to find out which professional reviewers are credible. If you visit a highly specific forum, where forum members frequently comment on their take on various reviews, you quickly find out which reviewers are credible and which are not.

So the burning issue should not be payola, but quality of reviews. Payola is just a smokescreen, especially when not defined.

I'll take specific issue with one key point of the article, and that relates to frequency of reviews and granting of reviews to advertisers.

In the industry I review - there are about 600 major products released a year. Even the most prolific reviewer or publishing companies in our industry, might be able to review 60 products. (On the print side, the average of publications is probably about 18 per year.

WHAT is inherently wrong, when there is a supply and demand situation of far, far, more products than a company can review, with providing more reviews for a company who advertises, than one who doesn't?

AS LONG AS THE REVIEWS ARE HONEST AND ACCURATE?

Why should a review company review a product from an unheard of company, when there are plenty of better known company's products to review - unless there is a reason to suspect that company makes a superior product? Afterall, for online review companies, they will get more traffic to their site (Payola?) doing the big name company's product. SINCE they can't get to all the products, well known or not, they must be selective. And why not do what is in their best interest for their business.

The Honesty of the review is the most relevant issue.

I recently told a manufacturer in my industry, (one that I reviewed one of their products about 6 months ago (they have about 8), when they asked if I could review one of their other models.

I explained that the new article was comparing 6 products. (I do those twice a year). I said, 2 of the reviews will go to companies that currently are advertising on our site, and 3 would be "random". Random meaning 3 products that among those many dozens that I could review, that I found most interesting. As it turns out, I didn't find the product they were interested in having me review, to be particularly interesting, so it wasn't chosen. Now this is an industry where there are dozens of directly competing products - "me toos" for lack of a better term.

Is that a problem? Does it really matter that I gave preference to two companies, that advertise with us?

After all, the company I turned down, actually happens to be a company with the potential to do as much or more advertising on our site, than any of existing manufacturers who are advertising.

It could even be said, that by not reviewing the product of a potential advertiser, we might risk that company never spending money on our site, and therefore, payola would be to accept products for review, from who don't advertise, because, they might start advertising if there is a good review.

But again, the bottom line is - are the reviews honest - it should be all that matters.

Had the article focused on that issue at all, the article might have been relevant. Without that aspect, all we have is some numbers.

BTW, are blogger sites, that have advertising revenues - professional, or are they as "tainted" as any commercial review site.

BTW, many forms of "payola" are perfectly legal and apparently polictically correct. When I owned a large reseller a few years back, most of the national print publications we advertised in would offer us for large buys - "editorial space" blurbs mildly identified as advertising (if you looked hard enough, such as a free Product blurb - picture and 300 words of text on some product we sold. I'm talking major magazines in a major industry now.

So, again, seeming politically correct is just dandy, but I, myself would rather read a review that accurately tells me what I need to know, regardless of any of this innuendo, than read a review from a different publication on the same product - where that publication is squeeky clean (in this regard) but the reviewer isn't as competent, and does not provide a clear and accurate picture of that being reviewed.

As I said, forums are a great place to keep professional reviewers honest, but if most people are trusting "end user" reviews when trying to figure out which is the best product of many, they are going to come up very short.

Sorry for the long email, now back to doing a review. -a




RE: Much ado about nothing?
By mindless1 on 6/6/2007 8:55:35 PM , Rating: 2
I have to disagree. Omission of reviews for competitive products, then leaving good (yet accurate) reviews of the remaining product is also a problem. A form of double-advertising disguised as a review.


RE: Much ado about nothing?
By JustKidding on 6/7/2007 12:50:13 PM , Rating: 2
quote:
If a site's reviews are accurate, that is the bottom line. Nothing else should matter to the reader of the reviews.
quote:
But again, the bottom line is - are the reviews honest - it should be all that matters.

Accuracy doesn't always equal honesty. Selective truth can be as misleading as a lie.

To use a Shakespeare quote, 'The lady doth protest too much, methinks.'


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