Study examines the impact of fake online reviews on e-commerce sales

By our News Team | 2022

Despite the buying of online reviews being illegal in many countries, researchers documented several large marketplaces for fake reviews.

Can you really trust that online product review before you make a purchase decision? New research has found that the practice of faking online product reviews may be more pervasive than you think.

According to the researchers, many product marketers purchase fake online reviews through an online marketplace found on social media. As a result, they achieved an increased number of reviews and higher than average ratings on various e-commerce sites, among them Amazon.

Online Reviews

Image by Tumisu from Pixabay

The study, published in the current issue of the academic journal, Marketing Science, is entitled ‘The Market for Fake Reviews’. The authors are Sherry He and Brett Hollenbeck of the UCLA (University of California, Los Angeles) Anderson School of Management, and Davide Proserpio of the Marshall School of Business at the University of Southern California (USC).

“We set out to study the economics and rating manipulation, and their effect on seller outcomes, consumer welfare and platform value,” explains He. “Despite the fact that the practice of buying online reviews is illegal, we were able to document the existence of large and active online markets for fake reviews.”

Here’s how it works: Sellers post in private online groups to promote their products. They then pay customers to purchase certain products and leave positive reviews. These social media groups operate on a number of online retail platforms. 

Researchers tracked the outcomes of fake reviews

“For our research, we decided to focus on Amazon because it is the largest and most developed [online] market,” says Hollenbeck. “We collected data by sending research assistants into these social media groups to document which product marketers were buying fake reviews and when. We then tracked these products’ outcomes on Amazon.com. This tracking included reviews, ratings, prices and sales [rankings].”

The researchers found that the buying of fake reviews is associated with a significant, but short-term, increase in the average rating and the total number of reviews. 

They found that there is a certain rating manipulation that also has a causal effect on sales. In addition, they determined that, after firms stopped buying fake reviews, their products’ average ratings fell and their share of one-star reviews tended to increase. This, they concluded, indicates that rating manipulation mostly centres on low-quality products.

To conduct their research, the study authors built a sample of approximately 1,500 products that were observed soliciting fake reviews over a nine-month period. The researchers found that the types of products involved represented a range of categories. They then tracked the outcomes of these products before and after the buying of fake reviews, and were able to document how the platform, in this case Amazon, regulates fake reviews.

“For the products in our research [that were] observed buying fake reviews, roughly half of their reviews were eventually deleted, but the deletions occurred with an average lag of over 100 days – allowing sellers to benefit from the short-term boost in ratings, reviews and sales,” says Proserpio. 

“Almost none of the sellers purchasing fake reviews were well-known brands. This is consistent with other research that has shown online reviews are more effective and more critical to smaller, lesser-known brands.”

You can find out more about the research paper here.

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.