Misleading Gimmicks from Consumer Reports

You better cut the pizza in four pieces because I’m not hungry enough to eat six.Yogi Berra (allegedly)

The other day I received an envelope from Consumer. It was soliciting contributions for a raffle fundraiser. The mailing had nine raffle tickets in it. Consumer Reports was requesting that I send back the tickets with a suggested donation of $9 (one dollar for each ticket). The mailing had a lot of paper:

The raffle had a grand prize that would be the choice of an undisclosed, top-rated car or $35,000. There were a number of smaller prizes bringing the total amount up for grabs to about $50,000.

The materials included a lot of gimmicky text. Things like:

  • “If you’ve been issued the top winning raffle number, then 1 of those tickets is definitely the winner or a top-rated car — or $35,000 in cash.”
  • “Why risk throwing away what could be a huge pay day?”
  • “There’s a very real chance you could be the winner of our grand prize car!”

Consumer Reports also indicates that they’ll send a free, surprise gift to anyone who donates $10 or more.

It feels funny to make a donate money based on the premise that I might win more than I donate, but I get it. Fundraising gimmicks work.

I don’t think it would be productive or even reasonable to pretend that humans are (or even ought to be) creatures that donate to non-profits for exclusively coldly-calculated, altruistic reasons.

That said, I get frustrated though when the gimmicks border on dishonest. Doubly so if deception is coming from an organization like Consumer Reports that brands itself as an organization committed to integrity.

One of the pieces of paper in the mailing came folded with print on each side. Here’s the first part that was visible:

Unfolding that paper and looking on the other side, I found a letter from someone involved in Consumer Reports marketing. The letter goes to some length to explain that it would be silly to not at least see if I had winning tickets. Here’s a bit of it:

It amazes me that among the many people who receive our Consumer Reports Raffle Tickers — containing multiple tickets, mind you, not just one — some choose not to mail them in. And they do this, despite the fact there is no donation required for someone to find out if he or she has won…So when people don’t respond it doesn’t make any sense to me at all.

This is ridiculous on several levels.

First, the multiple tickets bit is silly. It’s like the Yogi Berra line at the opening of the post. It doesn’t matter how many tickets I have unless I get more tickets than the typical person.

Second, it seems pretty obvious that Consumer Reports doesn’t care if a non-donor decides not to turn in tickets. The most plausible explanation for why Consumer Reports includes the orange letter is that people who would ignore the mailing may end up feeling guilty enough to make a donation. Checking the “I choose not to donate at this time, but please enter me in the Raffle” box on the envelope doesn’t feel great.

Finally, it makes perfect sense why I might not respond. Writing my name on each ticket, reading the materials, and mailing the tickets takes time. My odds of winning are low. I’d also have to pay for a stamp. Nothing about the rationale for not sending in the tickets is complicated. Consumer Reports knows that.

I’ll pretend that the only reason not to participate is that the stamp used to mail in the tickets isn’t free. That stamp is 55 cents at the moment.[1] Is my expected reward greater than 55 cents?

Consumer Reports has about 6 million subscribers.[2]

Let’s give Consumer Reports the benefit of the doubt and assume it can print everything, send initial mailings, handle the logistics of the raffle, and send gifts back to donors for only $0.50 per subscriber. That puts the promotion’s costs at about 3 million dollars. The $50,000 of prizes is trivial in comparison. Let’s assume that Consumer Reports runs the promotion based on the expectation that additional donations brought in will cover the promotion’s cost.

The suggested donation is $9. Let’s say the average, additional funding brought in by this campaign comes out to $10 per respondent.[3]

To break even, Consumer Reports needs to have 300,000 respondents.

With 300,000 respondents, nine tickets each, and $50,000 in prizes, the expected return is about 1.7 cents per ticket.[4] Sixteen cents total.[5] Not even close to the cost of a stamp.

4/12/2019 Update: I received a second, almost-identical mailing in early April.

I’m not unbiased. I’m not impartial.

Warning: This post is a rant and involves some foul language. Enjoy!


There’s a ridiculous amount of research supporting the idea that humans engage in an incredible amount of deception and even self-deception. People are biased. People respond to the incentives they face. Of course, anyone who has ever interacted with another human knows these things.

Despite this, pretty much every website offering third-party evaluation makes claims of objectivity or independence. Not claims that they try to minimize bias. Claims that they actually are unbiased.

Let’s take TopTenReviews, a site I criticized in a previous post. TopTenReviews says things like:

To be clear, these methods of monetization in no way affect the rankings of the products, services or companies we review. Period.
Bullshit. Total bullshit.

deceptive fish

I’ve complained enough in the past about run-of-the-mill websites offering bogus evaluations. What about the websites that have reasonably good reputations?

NerdWallet

NerdWallet publishes reviews and recommendations related to financial services.

Looking through NerdWallet’s website, I find this (emphasis mine):[1]

The guidance we offer, info we provide, and tools we create are objective, independent, and straightforward. So how do we make money? In some cases, we receive compensation when someone clicks to apply, or gets approved for a financial product through our site. However, this in no way affects our recommendations or advice. We’re on your side, even if it means we don’t make a cent.
Again, bullshit.

NerdWallet meets Vanguard

Stock brokerages are one services types that NerdWallet evaluates.

One of the most orthodox pieces of financial advice—with widespread support from financial advisors, economists, and the like—is that typical individuals who invest in stocks shouldn’t actively pick and trade individual stocks.[2] This position is often expressed with advice like: “Buy and hold low-cost index funds from Vanguard.”

Vanguard is a firm that has optimized for keeping fees low and giving its clients a rate of return very close to the market’s rate of return.[3] In fact, the firm’s founder, John Bogle, is famous for creating the first low-cost index funds.

Since Vanguard keeps costs low, it cannot pay NerdWallet the kind of referral commissions that high-fee investment platforms offer. So what happens when NerdWallet evaluates brokers? NerdWallet uses a silly evaluation methodology that results in a shitty rating for Vanguard.

Vanguard gets 3 out of 5 stars.[4] It’s the worst rating for a broker I’ve seen on the site.[5]

How does Vanguard’s mediocre rating get rationalized? NerdWallet slams Vanguard for not offering the sort of stuff Vanguard’s target audience doesn’t want. Vanguard gets the worst possible ratings for the “Promotions” and “Trading platform” categories. Why? Vanguard doesn’t offer those things.[6]

Imagine a friend went to a nice restaurant and came back complaining that her steak didn’t come with cake frosting. NerdWallet is doing something kind of like that.

The following excerpt is found on NerdWallet’s Vanguard review under the heading, “Is Vanguard right for you?” (emphasis mine):

Ask yourself this question: Are you part of Vanguard’s target audience of retirement investors with a relatively high account balance? If so, you’ll likely find no better home. You really can’t beat the company’s robust array of low-cost funds.

Investors who fall outside of that audience — those who can’t meet the fund minimums or want to regularly trade stocks — should look for a broker that better caters to those needs.

This is silly. Vanguard’s minimum is $1,000.[7] You shouldn’t buy stocks as an investment strategy if you have less than $1,000 to put into stocks![8] If you invest in stocks, you shouldn’t regularly trade individual stocks![9]

From my perspective, NerdWallet is saying that if you are (a) the typical kind of person that should be buying stocks and (b) you don’t use a stupid strategy, then “you really can’t beat the company’s [Vanguard’s] robust array of low-cost funds.”

So there we have it. Despite the lousy review, NerdWallet correctly recognizes that Vanguard is awesome.

NerdWallet didn’t really lie, but it’s biased.

thumbs down

To be clear, I’m being hard on NerdWallet. NerdWallet does a good job aggregating information about financial services and offers decent financial advice in some areas. The evaluation methodology I’m criticizing may not have been maliciously engineered to optimize for profits. NerdWallet may have stumbled into the current methodology. Still, there’s a big problem. NerdWallet’s current methodology is good for its bottom line, so it has a strong incentive not to correct obvious issues. On the other hand, if NerdWallet stumbles into a silly methodology that’s bad for its bottom line, it has a huge incentive to change the methodology.

WireCutter

Sometimes evaluators aim to create divisions between editorial content (e.g., review writing) and revenue generation. I think divisions of this sort are a good idea, but they should not be thought of as magic bullets that eliminate bias. WireCutter is one of my favorite review sites, but I think it makes the mistake of overemphasizing how much divisions can do to reduce bias:[10]

We pride ourselves on following rigorous journalistic standards and ethics, and we maintain editorial independence from our business operations. Our recommendations are always made entirely by our editorial team without input from our revenue team, and our writers and editors are never made aware of any business relationships.
I believe WireCutter takes actions to encourage editorial independence. However, I’m skeptical of how the commitment to editorial integrity is described. Absent extreme precautions, people talk. Information flows between coworkers. Even if editors aren’t intentionally informed about financial arrangments, it’s easy to make educated guesses. Commission rates offered by Amazon’s affiliate program are publicly available.[11]

Bias is sneaky

Running Confusopoly, I face all sorts of decisions unrelated to accuracy or honesty where bias still has the potential to creep in. For example, which industries should I cover? Industries where companies almost always offer commissions or industries where it’s hard to get a cut from any sales I generate? In what order should providers I recommend by displayed? Alphabetically? Randomly? One of those options will probably be better for my bottom line than the other.

I don’t have perfect introspective access to what happens in my head. A minute ago I scratched my nose. I can’t precisely explain exactly how or why I chose to do that. It just happened. Similarly, I don’t always know when and how biases affect my decisions.

I’m biased

I have conflicts of interest. Companies I recommend offer commissions. You can take a look at the arrangements here.

I try to align my incentives with consumers by building my brand around commitments to transparency and rigor. I don’t make these commitments for purely-altruistic reasons. If the branding strategy succeeds, I stand to benefit a lot.

Even with my branding strategy, my alignment with consumers will never be perfect. I’ll still be biased. If you ever think I could be doing better, please let me know.

Beware of Scoring Systems

When a third-party evaluator uses a formal scoring system or rubric, it’s a mistake to assume that the evaluator is necessarily being objective, rigorous, or thoughtful about its methodology.

I’ll use Forbes’ college rankings to illustrate.

Forbes argues that most college rankings (e.g., U.S. News) fail to focus on what “students care about most.” Forbes’ rankings are based on what it calls “outputs” (e.g., salaries after graduation) rather than “inputs” (e.g., acceptance rates or SAT scores of admitted applicants).[1]

Colleges are ranked based on weighted scores in five categories, illustrated in this infographic from Forbes:[2]

This methodology requires drawing on data to create scores for each category. That doesn’t mean the methodology is good (or unbiased).

Some students are masochists who care almost exclusively about academics. Others barely care about academics and are more interested in the social experiences they’ll have.

Trying to collapse all aspects of the college experience into a single metric is silly—as is the case for most other products, services, and experiences. If I created a rubric to rank foods based on a weighted average of tastiness, nutritional value, and cost, most people would rightfully ignore the results of my evaluation. Sometimes people want salad. Sometimes they want ice cream.

To be clear, my point isn’t that Forbes’ list is totally useless—just that it’s practically useless. My food rubric would come out giving salads a better score than rotten steak. That’s the correct conclusion, but it’s an obvious one. No one needed my help to figure that out. Ranking systems are only useful if they can help people make good decisions when they’re uncertain about their options.

Where do the weights for each category even come from? Forbes doesn’t explain.

Choices like what weights to use are sometimes called researcher degrees of freedom. The choice of what set of weights to use is important to the final results, but an alternative set of reasonable weights could have been used.

When researchers have lots of degrees of freedom, it’s advisable to be cautious about accepting the results of their analyses. It’s possible for researchers to select a methodology that gives one result while other defensible methodologies could have given different results. (See the paper Many Analysts, One Data Set: Making Transparent How Variations in Analytic Choices Affect Results for an excellent demonstration of this phenomenon.)

Creating scores for each category introduces additional researcher degrees of freedom into Forbes’ analysis. Should 4-year or 6-year graduation rate be used? What data sources should be drawn on? Should debt be assessed based on raw debt sizes or loan default rates? None of these questions have clear-cut answers.

Additional issues show up in the methods used to create category-level scores.

A college ranking method could assess any one of many possible questions. For example:

  • How impressive is the typical student who attends a given school?
  • How valuable will a given school be for the typical student who attends?
  • How valuable will a school be for a given student if she attends?

It’s important which question is being answered. Depending on the question, selection bias may become an issue. Kids who go to Harvard would probably end up as smart high-achievers even if they went to a different school. If you’re trying to figure out how much attending Harvard benefits students, it’s important to account for students’ aptitudes before entering. Initial aptitudes will be less important if you’re only trying to assess how prestigious Harvard is.

Forbes’ methodological choices suggest it doesn’t have a clear sense of what question its rankings are intended to answer.
Confused people

Alumni salaries get 20% of the overall weight.[3] This suggests that Forbes is measuring something like the prestige of graduates (rather than the value added from attending a school).[4]

Forbes also places a lot of weight on the number of impressive awards received by graduates and faculty members.[5] This again suggests that Forbes is measuring prestige rather than value added.

When coming up with scores for the debt category, Forbes considers default rates and the average level of federal student debt for each student.[6] This suggests Forbes is assessing how a given school affects the typical student that chooses to attend that school. Selection bias is introduced. The typical level of student debt is not just a function of a college’s price and financial aid. It also matters how wealthy students who attend are. Colleges that attract students with rich families will tend to do well in this category.

Forbes switches to assessing something else in the graduation rates category. Graduation rates for Pell Grant recipients receive extra weight. Forbes explains:

Pell grants go to economically disadvantaged students, and we believe schools deserve credit for supporting these students.[7]

Forbes doubles down on its initial error. First, Forbes makes the mistake of aggregating a lot of different aspects of college life into a single metric. Next, Forbes makes a similar mistake by mashing together several different purposes college rankings could serve.

Many evaluators using scoring systems with multiple categories handle the aggregation from category scores to overall scores poorly.[8] Forbes’ methodology web page doesn’t explain how Forbes handled this process, so I reached out asking if it would be possible to see the math behind the rankings. Forbes responded telling me that although most of the raw data is public, the exact process used to churn out the rankings is proprietary. Bummer.

Why does Forbes produce such a useless list? It might be that Forbes or its audience doesn’t recognize how silly the list is. However, I think a more sinister explanation is plausible. Forbes has a web page where schools can request to license a logo showing the Forbes endorsement. I’ve blogged before about how third-party evaluation can involve conflicts of interest and lead to situations where everything under the sun gets an endorsement from at least one evaluator. Is it possible that Forbes publishes a list using an atypical methodology because that list will lead to licensing agreements with schools that don’t get good ratings from better-known evaluators?

I reached out to the licensing contact at Forbes with a few questions. One was whether any details could be shared about the typical financial arrangement between Forbes and colleges licensing the endorsement logo. My first email received a response, but the question about financial arrangements was not addressed. My follow-up email did not get a response.
Greedy businessman on a pile of money

While most students probably don’t care about how many Nobel Prizes graduates have won, measures of prestige work as pretty good proxies for one another. Schools with lots of prize-winning graduates probably have smart faculty and high-earning graduates. Accordingly, it’s possible to come up with a reasonable, rough ranking of colleges based on prestige.

While Forbes correctly recognizes that students care about things other than prestige, it fails to provide a useful resource about the non-prestige aspects of colleges.

The old College Prowler website did what Forbes couldn’t. On that site, students rated different aspects of schools. Each school had a “report card” displaying its rating in diverse categories like “academics,” “safety,” and “girls.” You could even dive into sub-categories. There were separate scores for how hot guys at a school were and how creative they were. College Prowler has now rebranded as Niche.com. The new Niche.com site seems to be more professional, more focused on aggregation of category scores, and less useful. Oh well.

Forbes’ college rankings were the first college rankings I looked into in depth. While writing this post, I realized that rankings published by U.S. News & World Report and Wall Street Journal/Times Higher Education both use weighted scoring systems and have a lot of the same methodological issues.

Forbes is less obnoxious and heavy-handed than U.S. News. In the materials I’ve seen, Forbes doesn’t make unreasonable claims about being unbiased or exclusively data-driven. This is in sharp contrast to U.S. News & World Report. Here’s an excerpt from the U.S. News website under the heading “How the Methodology Works:”

Hard objective data alone determine each school’s rank. We do not tour residence halls, chat with recruiters or conduct unscientific student polls for use in our computations.

The rankings formula uses exclusively statistical quantitative and qualitative measures that education experts have proposed as reliable indicators of academic quality. To calculate the overall rank for each school within each category, up to 16 metrics of academic excellence below are assigned weights that reflect U.S. News’ researched judgment about how much they matter.[9]

As a general rule, I suggest running like hell anytime someone says they’re objective because they rely on data.

U.S. News’ dogmatic insistence that there’s a clear dichotomy separating useful data from unscientific, subjective data is misguided. The excerpt also contradicts itself. “Hard objective data alone” do not determine the schools’ ranks. Like Forbes, U.S. News uses category weights. Weights “reflect U.S. News’ researched judgment about how much they matter.” Researched judgments are absolutely not hard data.

It’s good to be skeptical of third-party evaluations that are based on evaluators’ whims or opinions. Caution is especially important when those opinions come from an evaluator who is not an expert about the products or services being considered. However, skepticism should still be exercised when evaluation methodologies are data-heavy and math-intensive.

Coming up with formal scoring systems that look rigorous is easy. Designing good scoring systems is hard.

Thoughts on TopTenReviews

Thumbs down image
I’m not a fan.

TopTenReviews ranks products and services in a huge number of industries. Stock trading platforms, home appliances, audio editing software, and hot tubs are all covered.

TopTenReviews’ parent company, Purch, describes TopTenReviews as a service that offers, “Expert reviews and comparisons.”[1]

Many of TopTenReviews’ evaluations open with lines like this:

We spent over 60 hours researching dozens of cell phone service providers to find the best ones.[2]

I’ve seen numbers between 40 and 80 hours in a handful of articles. It takes a hell of a lot more time to understand an industry at an expert level.

I’m unimpressed by TopTenReviews’ rankings in industries I’m knowledgable about. This is especially frustrating since TopTenReviews often ranks well in Google.

A particularly bad example: indoor bike trainers. These devices can turn regular bikes into stationary bikes that can be ridden indoors.

I love biking and used to ride indoor trainers a fair amount. I’m suspicious the editor who came up with the trainer rankings at TopTenReviews couldn’t say the same.

The following paragraph is found under the heading “How we tested on the page for bike trainers”:

We’ve researched and evaluated the best roller, magnetic, fluid, wind and direct-drivebike [sic] trainers for the past two years and found the features that make the best ride for your indoor training. Our reviewers dug into manufacturers’ websites and engineering documents, asked questions of expert riders on cycling forums, and evaluated the pros and cons of features on the various models we chose for our product lineup. From there, we compared and evaluated the top models of each style to reach our conclusions. [3]

There’s no mention of using physical products.

The top overall trainer is the Kinetic Road Machine. It’s expensive but probably a good recommendation. I know lots of people with either that model or similar models who really like their trainers.

However, I don’t trust TopTenReviews’ credibility. TopTenReviews has a list of pros and cons for the Kinetic Road Machine. One con is: “Not designed to handle 700c wheels.” It is.

It’s a big error. 700c is an incredibly common wheel size for road bikes. I’d bet the majority of people using trainers have 700c wheels.[4] If the trainer wasn’t compatible with 700c wheels, it wouldn’t deserve the “best overall” designation.

TopTenReviews even states, “The trainer’s frame fits 22-inch to 29-inch bike wheels.” 700c wheels fall within that range. A bike expert would know that.

Bike crash

TopTenReviews’ website has concerning statements about its approach and methodology. An excerpt from their about page (emphasis mine):

Our tests gather data on features, ease of use, durability and the level of customer support provided by the manufacturer. Using a proprietary weighted system (i.e., a complicated algorithm), the data is scored and the rankings laid out, and we award the three top-ranked products with our Gold, Silver and Bronze Awards.[5]

Maybe TopTenReviews came up with an awesome algorithm no one else has thought of. I find it much more plausible that—if a single algorithm exists—the algorithm is private because it’s silly and easy to find flaws in.

TopTenReviews receives compensation from many of the companies it recommends. While this is a serious conflict of interest, it doesn’t mean all of TopTenReviews’ work is bullshit. However, I see this line on the about page as a red flag:

Methods of monetization in no way affect the rankings of the products, services or companies we review. Period.[6]

Avoiding bias is difficult. Totally eliminating it is almost always unrealistic.

Employees doing evaluations will sometimes have a sense of how lucrative it will be for certain products to receive top recommendations. These employees would probably be correct to bet that they’ll sometimes be indirectly rewarded for creating content that’s good for the company’s bottom line.

Even if the company is being careful, bias can creep up insidiously. Someone has to decide what the company’s priorities will be. Even if reviewers don’t do anything dishonest, the company strategy will probably entail doing evaluations in industries where high-paying affiliate programs are common.

Reviews will need occasional updates. Won’t updates in industries where the updates could shift high-commission products to higher rankings take priority?

TopTenReviews has a page on foam mattresses that can be ordered online. I’ve bought two extremely cheap Zinus mattresses on Amazon.[7] I’ve recommended these mattresses to a bunch of people. They’re super popular on Amazon.[8] TopTenReviews doesn’t list Zinus.[9]

Perhaps it’s because other companies offer huge commissions.[10] I recommend The War To Sell You A Mattress Is An Internet Nightmare for more about how commissions shadily distort mattress reviews. It’s a phenomenal article.

R-Tools Technology Inc. has a great article discussing their software’s position in TopTenReviews’ rankings, misleading information communicated by TopTenReviews, and conflicts of interest.

The article suggests that TopTenReviews may have declined in quality over the years:

In 2013, changes started to happen. The two principals that had made TopTenReviews a household name moved on to other endeavors at precisely the same time. Jerry Ropelato became CEO of WhiteClouds, a startup in the 3D printing industry. That same year, Stan Bassett moved on to Alliance Health Networks. Then, in 2014, the parent company of TopTenReviews rebranded itself from TechMediaNetwork to Purch.

Purch has quite a different business model than TopTenReviews did when it first started. Purch, which boasted revenues of $100 million in 2014, has been steadily acquiring numerous review sites over the years, including TopTenReviews, Tom’s Guide, Tom’s Hardware, Laptop magazine, HowtoGeek, MobileNations, Anandtech, WonderHowTo and many, many more.[11]

I don’t think I would have loved the pre-2013 website, but I think I’d have more respect for it than today’s version of TopTenReviews.

I’m not surprised TopTenReviews can’t cover hundreds of product types and consistently provide good information. I wish Google didn’t let it rank so well.

Third-party Evaluation: Trophies for Everyone!

A lot of third-party evaluations are not particularly useful. Let’s look at HostGator, one of the larger players in the shared web hosting industry, for some examples. For a few years, HostGator had an awards webpage that proudly listed all of the awards it “won.”

Many of the entities issuing awards were obviously affiliate sites that didn’t provide anything even vaguely resembling attempts at rigorous evaluation:

Fortunately, HostGator’s current version of the page is less ridiculous.

Even evaluations carried out by serious, established entities often have problems. Rigorous evaluation tends to be difficult. Accordingly, third-party evaluators generally use semi-rigorous methodologies—i.e., methodologies that have merit but also serious flaws.

In many industries, there will be several semi-rigorous evaluators using different methodologies. When an evaluator enters an industry, it will have to make a lot of decisions about its methods:

  • Should products be tested directly or should consumers be surveyed?
  • What metrics should be measured? How should those metrics be measured?
  • If consumers are surveyed, how should the surveyed population be selected?
  • How should multiple metrics be aggregated into an overall rating?

These are tough questions that don’t have straightforward answers.

Objective evaluation is often impossible. Products and services may have different characteristics that matter to consumers—for example, download speed and call quality for cell phone services. There’s no defensible, objective formula you can use to assess how important one characteristic’s quality is versus another.

There’s a huge range of possible, defensible methods that evaluators can use. Different semi-rigorous methods will lead to different rankings of overall quality. This can lead to situations where every company in an industry can be considered the “best” according to at least one evaluation method.

In other words: Everyone gets a trophy!

This phenomenon occurs in the cell phone service market. At the time of writing, Verizon, AT&T, T-Mobile, and Sprint all get at least one legitimate evaluator’s approval. (More details in The Mobile Phone Service Confusopoly.)

Evaluators are often compensated in exchange for permission to use their results and/or logos in advertisements. Unfortunately, details on the specific financial arrangements between evaluators and the companies they recommend are often private.

Here are a few publicly known examples:

  • Businesses must pay a fee before displaying Better Business Bureau (BBB) logos in their advertisements.[1]

  • J.D. Power is believed to charge automobile companies for permission to use its awards in advertisements.[2]
  • AARP-approved providers may pay royalties to AARP. [3]

I have a theory. I’m not sure it’s correct, but I think it deserves consideration. An organization that is advertising an endorsement from the most rigorous evaluator in its field probably won’t be willing to pay a lot to advertise an endorsement from a second evaluator. A company with no endorsements will probably be much more willing to pay for its first endorsement.

Since there are many possible, semi-rigorous evaluation methodologies, maybe we should expect at least one evaluator to look kindly upon each major company in an industry. This phenomenon could even occur without any evaluator deliberately acting dishonestly. For example, lots of evaluators might try their hand at evaluation in a given industry. Each evaluator would use its own method. If an evaluator came out in favor of a company that didn’t have an endorsement, the evaluator would be rewarded monetarily and continue to evaluate within the industry. If an evaluator came out in favor of a company that already had an endorsement, the evaluator could exit the industry.

Bogus Evaluation Websites

Sturgeon’s law: Ninety percent of everything is crap.[1]

Rankings & reviews online

The internet is full of websites that ostensibly rank, rate, and/or review companies within a given industry. Most of these websites, even the ones that rank well in Google, are crap. Generally, these ranking websites cover industries where affiliate programs offering website owners large commissions are common.

Industries and product categories where useless review websites are especially common include:

  • Credit cards
  • Web hosting services
  • Online fax services
  • VoIP services
  • VPN services
  • Foam mattresses

If you Google a query along the lines of “Best [item from the list above]” you’ll likely receive a page of search results with a number of “top 10 list” type sites. At the top of your search results you will probably see ads like these:

Lack of in-depth evaluation methodologies

Generally, these “review” sites don’t go into any kind of depth to assess companies. As far as I can tell, rankings tend to be driven primarily by a combination of randomness and the size of commissions offered.

Admittedly, it’s silly to think that the evaluation websites found via Google’s ads would be reliable. Unfortunately, the regular (non-ad) search results often include a lot of garbage “review” websites. From the same query above:

Most of these websites don’t offer evaluation methodologies that deserve to be taken seriously.

Even the somewhat reputable names on the list (i.e. CNET & PCMag) don’t offer a whole lot. Neither CNET nor PCMag clearly explain their methodologies, and the written content doesn’t lead me to believe either entity went in depth to evaluate the services considered. [2]

Fooling consumers

If consumers easily recognized these bogus evaluation websites for what they are, the websites would just be annoyances. Unfortunately, it looks like a substantial portion of consumers don’t realize these websites lack legitimacy.

Google offers a tool that presents prices that “advertisers have historically paid for a keyword’s top of page bid.” According to this tool, advertisers are frequently paying several dollars per click on the kind of queries that return ads for bogus evaluation websites:[3]

We should expect that advertisers will only be willing to pay for ads when the expected revenue per click is greater than the cost per click. The significant costs paid per click suggest that a non-trivial portion of visitors to bogus ranking websites end up purchasing from one of the listed companies.

How biased are evaluation websites found via Google?

Let’s turn to another industry. The VPN industry shares a lot of features with the web hosting industry. Both VPN and web hosting services tend to be sold online with reasonably low prices and reoccurring billing cycles. Affiliate programs are very common in both industries. There’s an awesome third-party website, ThatOnePrivacySite.net, that assesses VPN services and refuses to accept commissions.[4] ThatOnePrivacySite has reviewed over thirty VPN services. At the time of writing, only one, Mullvad, has received a “TOPG Choice” award,[5] indicating an excellent review.[6] Mullvad is interesting in that it has no affiliate program—an unusual characteristic for a VPN company.

Mullvad’s lack of an affiliate program allowed me to perform a little experiment.

I Googled the query “Best VPN service”. I received 16 results, 7 of which were ads. 15 of the results provided rankings of VPN services (one result was an ad for a specific VPN company).

Three of the ranking websites listed Mullvad:

  • Tom’s Guide
  • TheBestVPN.com
  • PCWorld

3 out of 9 isn’t great, but it’s not terrible either.[7] None of the 6 ranking websites that I received ads for listed Mullvad.