Power bloggers win big bucks on dubious deals

By Yoon Ja-young

The Internet era gave birth to power bloggers, who attract thousands of visitors to their site everyday with postings on diverse topics. Some of them, however, prove to be power sellers, receiving huge commissions for writing positive reviews of products or services and even selling them directly.

The controversy was stirred by a blogger nicknamed Babyrose, who runs a popular blog about cooking on the country’s biggest portal Naver. The wife-turned-blogger was a superstar online, with over 50,000 visitors daily seeking her recipes and tips on home management. Naver has designated her a Naver Power Blogger since 2008.

On top of recipes, she often held a group shopping event. She uploaded reviews of diverse items, mostly kitchen tools, explaining how these products helped her. The review followed a group shopping opportunity, which attracted visitors with lower prices.

However, an ozone sterilizer sold through her blog turned out to leave an excessive amount of ozone, which could harm people’s health, according to the Korea Agency for Technology and Standards. The agency recommended a voluntary recall, which Lolus, the manufacturer, is refusing.

Those who purchased it through the Babyrose blog sought a refund and it was revealed that she was paid 70,000 won in commission for each ozone sterilizer sold, priced at 360,000 won. Since around 3,000 people bought them through her, she is estimated to have made over 200 million won through the ozone cleaner mass shopping event.

“A group of victims contacted us, and they met with a lawyer. They can file a class suit or civil lawsuit. What they want, ultimately, is a refund,” said Cho Yoon-mi, director at the Green Consumer Network, a leading consumer NGO. As there are no legally binding standards for ozone emissions yet the manufacturer is refusing to give a refund, according to Cho. Some of the victims, however, are contending that they became sick after using the product.

Power bloggers becoming power brokers

Cho said that Babyrose has several problems. “First of all, she exaggerated the benefits of the product. Secondly, she didn’t notify visitors that her positing was a sales activity,” she said.

There are around 700 power bloggers designated by Naver in diverse fields ranging from cooking and childcare to IT, cars and sports. Many of them hold group shopping events. However, few consumers suspect them of receiving a commission from the manufacturers.

“I never thought about it. I thought they did it to recommend products they thought were good. I trusted their reviews as they seemed to be very professional housewives,” said Park Ji-hyun, an office worker who often buys products such as food and cookware from power bloggers.

Some bloggers have become more influential than traditional media, equipped with professional information in their individual fields. People feel a closeness between the power bloggers and themselves, and trust them like a neighbor.

The truth is that some of the reviews and group shopping events were for money. “I would call them a kind of merchant. Power blogging is like a profession. Many of them involve the entire family to manage the blog. It’s more like a family business,” Cho said.

Underlying and sly, they hid the fact that they were paid commission. In 2008, a blogger who ran a popular Internet cafe on cosmetics turned out to be enjoying free trips to French cosmetics company headquarters and receiving 500,000 won per review. In the case of Babyrose, her review promoted a problematic product.

Some bloggers approach businesses and suggest that they could post a positive review in exchange for monetary gains. Businesses also turn to bloggers for viral marketing. A blogger, who posts mostly on MBA courses and the economy, said that he was surprised when a film PR agency suggested that they would compensate him for writing a movie review on his blog.

Small companies that lack marketing channels often resort to viral marketing, but big companies aren’t any exception. Both Samsung Electronics and LG Electronics, have bloggers who post reviews of their new products.

Let consumers know

Consumer groups say that consumers should be notified if the posting was made due to sponsorship. “In the United States, bloggers who are compensated for posting reviews are obliged to make this fact known to the public,” said a secretary for Rep. Lee Seong-nam of the main opposition Democratic Party, who is preparing a bill to regulate commercial postings by power bloggers. Those violating the regulation face up to $11,000 in fines in the United States.

Cho of the Green Consumer Network recommends people to buy goods through official channels. “They may get information from power bloggers, but then they should buy from an official channel. Official online transactions have a system to protect your money, but bloggers don’t. There is no way to get the money back,” Cho said, pointing out that power bloggers aren’t registering as online sellers as requested by the online transaction act.