When you think about online review sites, you probably think of sites like Yelp or Amazon or BestCompany.com. But if you think waay back, you might remember a site called Angie's List, which used to charge you money for access to their lists of home services contractors-think plumbers, electricians, etc.-and customer reviews about each one. Ring a bell?
Yes, I'm half-joking. You probably remember Angie's List very well. It was, after all, a pioneer in online consumer reviews. You also probably remember that they haven't gone anywhere. They're still around. But while other sites like Yelp were rising up, giving away access to customer reviews for free, Angie's List's paid subscription model sunk the site into relative obscurity.
Perhaps finally realizing their peril, Angie's List announced a few months ago that it would be opening access to its lists and reviews to the public, free of charge.
This, of course, is a huge move for the site and will constitute big changes in how they make money to stay profitable. It also opens up to consumers like me and you a wealth of in-depth reviews that have previously been blocked.
Here's what Angie's List's move into the free customer reviews space means for them and consumer reviews as a whole:
All review sites benefit from more traffic. It means more people leaving reviews and more people seeing reviews. As more people submit reviews about a given company, the cumulative score created by those reviews becomes more and more credible. For instance, if you have only two reviews about a company, one that gave them a 10 and one that gave them a one, their score of 5 is pretty unreliable. But if, after 56 reviews have been submitted, that company has a cumulative score of 5, then that's a score you can trust.
In this way, opening up Angie's List to more traffic can only improve the quality and trustworthiness of their reviews. It will also contribute to giving the general consumer a much fuller picture of the company in question, says Brian Patterson at Search Engine Land:
"[W]hile Angie's List did have an impact on their reputations, less than one percent of the US population were members, which meant the vast majority of people couldn't see the rating or reviews posted on a company profile."
Naturally, increased traffic will also open up Angie's List to the problem that most open reviews sites experience: how to sift out the trustworthy reviews from the large numbers of untrustworthy ones.
One of the biggest questions for observers of Angie's List's big move is how they will make money. After all, most (not all) of their revenue came from their paid subscriptions. The answer to this question will most likely force Angie's List to branch out from their traditional market of home services companies.
Brian Patterson theorizes:
"In the same way that Yelp started out with restaurants and has expanded into many other consumer businesses, we can expect that Angie's List will try to grow into other markets as well...I'm not expecting Angie's List to become a restaurant review site (although anything is possible), but I could certainly see it getting into the healthcare space, B2B reviews and maybe even software/SaaS reviews."
Patterson's reasoning comes from the time-tested rule of online business: if you're not selling something and you're not charging a subscription fee, you must be making money of your site traffic.
To do this effectively, it's in Angie's List's best interest to broaden their focus to cover more areas. Maybe they will branch out into providing reviews about auto service providers or home electronics. Whichever way they go, they will almost certainly go broader.
"Unlike Yelp, businesses could get by with bad Angie's List scores and negative reviews because a lot of people couldn't see them," says Patterson. "Now, everyone can."
One thing is for sure with Angie's List: they have so much customer-generated content over such a long period of time that they will definitely start showing up in people's search results. And that means, if you're an online marketer, you'd better start worrying about what people have said about you on Angie's List. It matters now.
Online reviews have become a major part of how people decide what to buy. A natural result of this is that people are starting to get very sensitive about the trustworthiness of consumer reviews. The government and companies like Amazon are on the warpath to stamp out fake reviews. Department store chain Lorde and Taylor recently got slammed by the FTC for rewarding customers for wearing a certain dress in their posts and not clarifying that they sent those dressed to those customers.
Indeed, there seem to be a universal set of rules forming around online reviews. Those who don't follow these rules will be punished.
These rules will likely come into conflict with Angie's List's long-standing model of allowing companies to pay them for heightened promotion. While the site has never been officially accused of running a pay-to-play scheme, they have admitted that they do accept money from businesses to place those businesses higher up on search result pages and even hide poor reviews.
Explains Eric Goldman at Forbes:
"So long as Angie's List accepts money from reviewed businesses in exchange for heightened promotion, it will find it hard to squelch pay-to-play conspiracy theories."
They will also find themselves in the crosshairs of politicians and organizations looking to get rid of fake and manipulated reviews once and for all.
To give up their current promotion model would likely cost Angie's List a major revenue stream. At the same time, however, if the site does not give up all appearances of rigged search results, they might find themselves the targets of harsh government action or consumer lawsuits and worse off than if they'd just stayed in their paid subscription model.