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# Cost of Fake Reviews, PPC Costs Up, Internet Remorse
- URL: https://www.nearmedia.co/cost-of-fake-reviews-ppc-costs-up-internet-remorse/
- Published: 2023-06-23T19:04:07.000Z
- Updated: 2023-06-23T19:04:07.000Z
- Author: Greg Sterling
- Tags: News

### Cost of Fake Reviews: $24B

In its [blog post](https://blog.google/outreach-initiatives/public-policy/legal-action-stop-fake-review-scams/?ref=nearmedia.co) announcing [litigation](https://www.nearmedia.co/tiktok-review-bombing-google-whack-a-mole-eu-acts-on-ai/) against alleged review fraudster Ethan Hu, Google cited an FTC report stating consumers wasted "$125 on average each year \[because of\] inaccurate reviews." That figure came originally from a multi-country TrustPilot [survey](https://business.trustpilot.com/guides-reports/build-trusted-brand/the-critical-role-of-reviews-in-internet-trust?ref=nearmedia.co) and is actually $110\. But this number is speculative at best, essentially a guess, because consumers don't know how many fake reviews they're seeing and certainly can't determine which purchases were influenced by them. By definition, nobody would knowingly buy something based on a fake review. Separately, in early 2022, UK regulators [calculated](https://www.theguardian.com/business/2022/apr/20/uk-to-make-fake-reviews-illegal-and-tackle-subscription-traps?ref=nearmedia.co) that "the average UK household spends about £900 ($1,142) each year after being influenced by online reviews." This is *all reviews*, not fake reviews specifically – again, a highly speculative number. The most conservative data I've seen [argues](https://www.oberlo.com/statistics/how-many-people-shop-online-in-the-us?ref=nearmedia.co) that roughly 220 million people in the US shop online. One could thus argue that the cost of fake reviews in the US alone is $24 billion each year. 

![](https://storage.ghost.io/c/03/80/0380d96d-ef7e-450e-96b3-2963e18aaab5/content/images/2023/06/Screen-Shot-2023-06-23-at-11.04.58-AM.png)

**Our take:** 

- Alternatively, let's assume that Americans spend $1.1K per year because of online reviews (the UK number), which is probably low. Prime subscribers [spend an average of $1,400 per year](https://www.nearmedia.co/facebook-blew-waze-deal-prime-dark-patterns-gbp-category-boost/) on Amazon alone.
- Using the $1.1K figure, plus the finding that \~[11% of the reviews on Google](https://www.nearmedia.co/meh-ta-moment-fake-reviews-gmb-a-big-lead-driver/) are inauthentic, the annual cost of fake reviews on Google alone is $26 billion. If other platforms are included, that goes up.
- These figures are highly imprecise but serve to illustrate the scale and significant real-world cost of review fraud on the major platforms.

### Google Ads CPL Is $53.52.

Wordstream's recent PPC benchmarking [report](https://www.wordstream.com/blog/ws/2023/05/15/google-ads-benchmarks?ref=nearmedia.co) shows that PPC metrics are up YoY except conversions, which are down 10%. CTR, CPC and cost per lead (CPL) have all increased, the latter because conversions are down. Across more than 20 (mostly local) verticals, average CTR was 6.1%, CPC was $4.22, Conversion Rate was 7.04% and CPL was $53.52\. The report relies on internal client spending data for these figures. Only Automotive and Beauty & Personal Care saw their lead costs go down. The industries with the highest CPLs were Career and Employment ($132.95), Attorneys and Legal Services ($111.05), and Furniture ($108.85). Lawyers also had the lowest CTR, at 4.76%, while Home Services/Improvement (4.8%) and Business Services (5.1%) were also below average. The industries with the highest conversion rates (undefined) were Pets (13.4%), Physicians and Surgeons (13.1)%, and Automotive (12.6%). The award for lowest conversion rates goes to Apparel (1.57)%, followed by Furniture (2.57)%, and Real Estate (2.88%). 

![](https://storage.ghost.io/c/03/80/0380d96d-ef7e-450e-96b3-2963e18aaab5/content/images/2023/06/Screen-Shot-2023-06-23-at-11.26.31-AM.png)

**Our take:** 

- The majority of these categories are local and have SMB advertisers. Few are e-commerce. Most of the clicks are going to organic links/listings.
- In Near Media's user research most people say they "never click on ads," which is largely true; yet they do click on LSAs.
- The impact of SGE on organic and ad clicks remains to be seen, though ads are not "pushed down" like organic results in an AI result.

### Poll: 67% Have Internet Remorse 

For years tech companies told the public they were "[making the world a better place](https://abc.xyz/investor/founders-letters/2004-ipo-letter/?ref=nearmedia.co)." They argued their products and tools were enabling people to be more efficient and productive. There's considerable truth in these claims – I owe my career to the internet – but they tell only part of the story. The internet has made certain things more convenient and other things worse (e.g., [social isolation](https://www.nngroup.com/articles/does-the-internet-make-us-lonely/?ref=nearmedia.co), [political polarization](https://greatergood.berkeley.edu/article/item/is%5Fsocial%5Fmedia%5Fdriving%5Fpolitical%5Fpolarization?ref=nearmedia.co), [disruption of democracy](https://www.theatlantic.com/ideas/archive/2022/07/social-media-harm-facebook-meta-response/670975/?ref=nearmedia.co), [mass surveillance](https://techcrunch.com/2023/06/13/us-intelligence-report-purchase-americans-personal-data/?ref=nearmedia.co)). Now a [Harris poll](https://www.fastcompany.com/90909279/gen-xers-and-older-millennials-really-just-want-to-go-back-in-time-to-before-the-internet-existed?ref=nearmedia.co) of US adults finds that 67% of respondents, if they could, would go back to a time before ubiquitous screens and social media. This is probably a function of multiple factors, including connection fatigue and FOMO anxiety. Among 18-34 year olds the "internet remorse" figure was 63% but it was 77% for those 35-54\. Another factor: change makes people anxious, especially rapid change. In a [separate poll](https://www.ipsos.com/en-us/change-happening-too-fast-and-too-slowly?ref=nearmedia.co) by Ipsos, a plurality (46%) of US adults said that AI development is happening too fast, while 30% said it was going at the right speed. Social and technological change are speeding up and we have to find a way to live them. 

![](https://storage.ghost.io/c/03/80/0380d96d-ef7e-450e-96b3-2963e18aaab5/content/images/2023/06/Screen-Shot-2023-06-23-at-9.38.21-AM.png)

Source: Ipsos (n=1,117 May 2023)

**Our take:** 

- If people were actually given the power to turn back the clock and do away with the internet most probably wouldn't. This is a fantasy.
- Still, mass online data collection and social media have caused real problems that have not been fully addressed, let alone solved.
- The early consumer efficiencies of the internet, including in local, have plateaued. AI may deliver more gains, though it's not yet clear.

## Recent Analysis

- **Near Memo special edition:** [Overture Maps Foundation is building the future of digital mapping](https://www.nearmedia.co/near-memo-special-edition/).

## Short Takes

- **Dropbox Dash**: [universal search tool](https://blog.dropbox.com/topics/product/introducing-AI-powered-tools?ref=nearmedia.co) for all your work.
- **Google**: [don't use AI/LLMs](https://www.seroundtable.com/google-ai-llms-diagnose-seo-issues-35592.html?ref=nearmedia.co) to diagnose SEO/site problems.
- How to win **SGE carousel** rankings [with "SME" content](https://searchengineland.com/google-sge-snapshot-carousel-strategies-b2c-b2b-seo-428490?ref=nearmedia.co).
- **TikTok** has become a massive focus group for brands ([WSJ](https://www.wsj.com/articles/tiktok-trends-pink-sauce-product-development-661c4178??ref=nearmedia.co)).
- SMBs [increasingly willing to accept](https://bredin.com/blog/2023/06/bredin-report-what-smbs-want-in-a-payments-solution-part-1/?ref=nearmedia.co) **digital payments**.
- **LexisNexis** selling data, [enables mass surveillance](https://theintercept.com/2023/06/20/lexisnexis-ice-surveillance-license-plates/??ref=nearmedia.co) of immigrants.
- **LinkedIn** wants you to [use its AI tool](https://www.linkedin.com/feed/update/urn:li:activity:7077766600572981248/?ref=nearmedia.co) ... to write LinkedIn posts.
- AI-powered **You.com** adds new generative [AI "pro" features](https://about.you.com/introducing-youpro-the-all-in-one-ai-toolkit/?ref=nearmedia.co).
- Microsoft **predictive targeting** [drove](https://about.ads.microsoft.com/en-us/blog/post/june-2023/the-future-is-now-with-predictive-targeting?ref=nearmedia.co) 46% conversion bump.
- **DuckDuckGo** privacy browser comes to [Windows](https://duckduckgo.com/windows?ref=nearmedia.co).
- **YouTube** to incorporate [AI-dubbing tool](https://www.theverge.com/2023/6/22/23769881/youtube-ai-dubbing-aloud?ref=nearmedia.co) to reach int'l audiences.
- **Meta** ditching news in Canada [as punishment for Online News Act](https://nationalpost.com/news/politics/showdown-looming-as-online-news-bill-is-about-to-become-law?ref=nearmedia.co).
- **Facebook** still the [top entry point for news](https://pressgazette.co.uk/social%5Fmedia/facebook-becoming-less-important-for-news-as-video-networks-grow-in-popularity/?ref=nearmedia.co) but it's declining.
- Roughly 33% of [agency jobs at risk](https://www.marketingdive.com/news/advertising-agencies-automate-jobs-generative-AI/653499/?ref=nearmedia.co) from **AI replacement** by 2030.

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