A new addition to business networking site LinkedIn works off the principle that people trust recommendations of others in their networks, whether they’re in the market for a nanny or a search marketing consultant. Members of the site can now recommend service providers to other members. The more people recommend a business, the more prominently that company’s profile is displayed in search results.
Another company, Grayboxx, has launched a site, now in beta, that crawls many forms of online media to score businesses on quality. But can local proprietors keep up with the growing number of online services offering such peer rating systems?
Unlike most online business directories, many of which allow users to post reviews or rate companies, businesses cannot advertise in LinkedIn’s new services marketplace. They can’t pay for a sponsored listing that lands at the top of a specific search results page, or run a keyword-driven text ad alongside search results.
In fact, the only way a provider can get listed in the directory is if he’s recommended by a member of the site. Members can search for marketplace listings by geography, or filter services by showing only businesses recommended by their network connections.
“The way advertising is going with the emergence of social networks is different than just buying ads [on those sites],” said LinkedIn VP of Marketing Konstantin Guericke. “It’s a different form of advertising that can’t be bought; it’s earned.”
Businesses that want a leg up on LinkedIn have the ability to request a recommendation by site members, or run cost-per-action and CPM-based text ads on some site pages through AdBrite. According to Guericke, many members use the self-service text ad system to drive traffic to their LinkedIn profile pages. Display ads targeted to members by geography, industry, job position, seniority and company size are also available on the site.
A steady stream of social networking and local search sites with a dual purpose of providing trustworthy business recommendations has been flowing online in recent years, including shopping community Judy’s Book, local CGM site BackFence and local network and merchant directory site Smalltown.
Another new service actually sifts through all those postings and more in order to score businesses in terms of popularity. Grayboxx takes information from directory providers and combines it with online user data from e-mail address books, online calendars and tags in digital photos.
Paid enhanced listings aren’t planned for the local business ranking site, which in its current beta form features only businesses located in California’s Bay area. “The whole idea is to benefit the companies that have given good service,” said Bob Chandra, “chief Grayboxx officer” for the firm. Businesses are ranked through “no effort on their part and no interventions,” he continued.
Because rankings are not based on reviews or ratings posted directly on Grayboxx, the system prevents so-called gaming, or the act of posting phony positive reviews, he said. According to Chandra, the company only uses data sources from companies with privacy policies that approve sharing of aggregated non-personally identifiable data.
The steady growth of sites offering peer reviews and ratings systems for regional businesses means proprietors have more options than ever to find referrals online. However, many small business owners are lucky if they have the time or money to place a classified or search ad, much less keep track of what people are saying about them on the Web. As local search sites, user-generated review services and social networks proliferate, it’s becoming harder for local contractors, service providers and shop owners to control the messages that get out about them. Some believe the best they can do is a good job.
“A lot of small business owners don’t have a lot of time to browse around the Web. The only control they have is how they run their business,” said Colby Atwood, president of local media research outfit Borrell Associates. “
Social networks and user-generated reviews “are going to become increasingly valuable over time as people become more sophisticated in using the Web to bring more people to their [businesses],” said Atwood. However, he added, “It will take a while for the message to filter down to small businesses.”
Such new media realities are affecting local small businesses; still, said Peter Krasilovsky, principal of local media consulting firm Krasilovsky Consulting, “So much of this stuff is marketing reinforcement.” Before these advertisers concern themselves with user-generated reviews and other online rating systems, they should be doing more online lead generation through search, online classifieds and other forms of Web advertising, he said.