A web of deception By David Gelles

An overenthusiastic em­ployee from the computer supplies maker Belkin posted an offer online last month -- $0.65 for anyone willing to write a positive review of Belkin products on Amazon.com. Several people took up the offer, producing gushing appraisals of Belkin products they had never used.

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After a blogger exposed the scam, news organisations jumped on the story. The offer was removed and Belkin’s president weighed in with an apology.

The incident was a public relations disaster for Belkin. It was also a prime example of "Astroturfing", the unsavoury marketing practice of generating fake grassroots enthusiasm for a product.

Adam Brown of Coca-ColaGiven the anonymity afforded by the internet, it is hardly surprising that deceptive marketing is on the rise. Consumers are spending more time online and companies are seeking new ways to reach them.

But now, in an effort to regulate how employees behave on the web, companies and industry groups are developing their own online codes of ethics. They want to ensure that when staff do engage with social media, they act ethically.

Last year, Coca-Cola established its own set of social media guidelines and distributed them in a memo to all employees. The policy emphasises the need for transparency and encourages employees to use common sense when discussing the brand online. "We’ve always had very diverse channels to reach consumers," says Adam Brown (pictured), digital communications director. "Wherever they are, that’s where we go. That’s now evolved into the need for a social media policy."

So when Mr Brown went online to promote Coca-Cola’s Super Bowl advertisements, he followed the guidelines. On Facebook, Mr Brown announced that he was a Coke employee and pointed other users to the Coke ads on YouTube. On Pittsburgh Steelers fan forums, Mr Brown, who is from Pittsburgh, named his employer and then directed fans to the Coke blog, which had an interview with Steelers’ defensive star Troy Polamalu.

Mr Brown said more deliberate engagement with online conversations was a necessity for a global company such as Coca-Cola. "We’re mentioned several thousand times a day on blogs, and there are several hundred tweets about us on Twitter," he says. "There is a lot of conversation taking place about our brand without us. Where appropriate, we wanted to start getting involved."

Companies began interacting with social media years ago. But only recently have those involved with the industry perceived a need to develop ethical standards. Among the first to do so was The Word of Mouth Marketing Association, an organisation for the viral and buzz marketing industry. Womma published an ethics code in 2005, emphasising honesty of relationship, opinion and identity.

Since then, many companies have used the Womma code as a blueprint for their own guidelines. "Companies are learning every day that there is a right way and a wrong way to engage with social media," says Paul Rand, vice-president of Womma’s board and head of its ethics project. "Some companies are learning by touching the burning pot; some companies are learning from the mistakes of ­others."

One company that "touched the burning pot" is Shelfari, a social networking site for book lovers, owned by Amazon. As it battled for market share in late 2007, it came under fire for its poor design and clunky user interface. Soon, comments appeared on more than 50 blogs attesting to Shelfari’s greatness. "I have been on Shelfari for a couple of months now and absolutely love it," read one. "Shelfari is such a great site. I joined a couple of months ago and I have been hooked on it ever since," read another.

But all the comments were posted by the same user, "schaufferwaffer", who was soon exposed as a Shelfari employee. Shelfari’s chief executive admitted to the Astroturfing (he blamed it on an intern who knew no better), and promised it would never happen again.

Such behaviour is declared out of line in the "disclosure best practices toolkit", an ethics code drawn up by the Blog Council, an organisation for heads of social media at big companies. The document advises employees and agencies to announce whom they work for when communicating with blogs or bloggers. It also encourages employees to provide a means for contacting them directly, if someone they interact with via social media wants to follow up with a two-way conversation. The toolkit also warns against using pseudonyms.

IBM was one of the first companies to develop its own social media policy. In 2005, it published its "social computing guidelines", which insist that employees write under their own names, using the first person, and make it clear they are speaking for themselves and not on behalf of IBM. It also prohibits employees from referencing clients, partners or suppliers without their approval.

UPS is developing its own online ethics policy after recognising how damaging Astro­turfing and other online misbehaviour can be for a company’s reputation. "If one of our airplanes goes down, we have a very clear plan for getting information to the media," says Norman Black, director of global media services. "We realised we did not have a good plan for responding to a crisis on the ­internet."

In some countries, deceptive marketing practices are not only frowned upon but also illegal. In the UK, the law identifies "falsely representing oneself as a consumer" as a punishable offence. And in 2006, the US Federal Trade Commission issued regulations stating that word-of-mouth marketers must disclose their relationships. But in spite of these new rules there has been little enforcement of the measures.

Even without prosecution, Belkin seems to have learnt its lesson. Melody Chalaban, speaking for the company, says Belkin will soon be holding seminars to teach employees how to interact ethically with social media, and is also considering joining Womma. "We want to stress that this is an isolated incident," says Ms Chalaban. "We don’t endorse or condone unethical practices like this."

Side Bar: The last post: underhand tactics can end in a PR disaster

* Flogging. Fake blogs can help companies get a personal voice behind a marketing campaign -- but they risk a PR disaster if they are uncovered. When Sony tried to boost sales of its PSP portable gaming unit, it started a blog supposedly by two boys who wanted PSPs for Christmas. When it was revealed as a fake, Sony apologised and took it down.

* Astroturfing. A technique that gets its name from the practice of generating fake grassroots enthusiasm. One Florida company, PayPerPost, serves as a matchmaker between companies willing to pay for good press and bloggers willing to plug products that they have never used. After receiving criticism, PayPerPost now requires bloggers to disclose that their posts are sponsored.

* Comment spamming. Flooding the comment fields of blogs with enthusiastic notes about a company, even with full disclosure, is not welcomed by web users. When a Motorola employee commented on dozens of posts on a technology blog -- each comment a plug for the new Motorola Krave -- bloggers responded with snide criticisms of his spamming, which duly ceased.

Copyright The Financial Times Limited 2009

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