Angie's List has been in the media a lot lately – for its IPO last November, for its current sale of stock to generate advertising revenue (thereby diluting the value of existing stock), and for its decision to return to advertising on the Rush Limbaugh show in spite of significant controversy. However, there's another elephant in Angie's parlor, and it threatens to utterly destroy the credibility of Angie's List's marketing, not to mention the integrity of its business model.
Angie's List has long marketed their service to consumer subscribers by cultivating a belief that businesses are not allowed any control over subscriber-written reviews of those businesses. This supposedly fool-proof policy is echoed by many who advocate for Angie's List:
no one can pay to be on Angie's ListThis perception is a result of Angie's List advertising promoting a policy in rather absolute terms, and designed for very specific marketing purposes. Another example of the myth, again from a third party:
And remember no contractors can pay to be on Angie's List.But Angie's List went public last November, and has since been furiously engaged in tapping businesses, as well as the customer-subscribers that patronize those businesses, for revenue. Rather than come clean with subscribers about their evolving business model, Angie's List has sought to retain the consumer-friendly appeal of its earlier policy in order to avoid mass un-subscriptions. This makes for a tricky business relationship in which Angie's List arbitrates between two other groups while partially concealing its relationship with one of the two groups. The implications, after the jump.
This is the current, official version of policy from Angie's List:
Companies don't pay to be on Angie's ListDo you notice a subtle perceptual difference? It is no longer can not, it is now do not.
As in, companies do not pay to be on Angie's List, but maybe they can pay for something else that amounts to the same thing?
Indeed, businesses do have a relationship with Angie's List in which money is exchanged. The extent to which this forces verbal gymnastics upon Angie's List may be understood from this interaction with an advertiser:
Dawn Bedgood posted to Angie's ListAssuming that the assertion that Angie's List "[charges] contractors to be listed on their site as a source of advertisement" is truthful (and i've seen it corroborated in comments following other Daily Kos articles), what can we make of the puzzling response from Angie's List that "You’re right that contractors can pay to offer a discount to Angie’s List members, but they cannot pay to be listed on Angie’s List"?
We entered into an advertising contract with Angie's List several months ago. If you are a contractor considering doing the same, PLEASE keep reading!
Angie's List makes money a couple of ways - One is by charging homeowners to become a "member". Another is by charging contractors to be listed on their site as a source of advertisement. The commercial that says businesses can't pay to be on Angie's List is clearly not 100% truthful - you can pay to be on Angie's List. What happens next is the fun part!
As business owner, you sign a contact for 12 months (at a hefty price I might add) to be listed on their site as a vendor. It's only subsequent to entering into a contact that the bad news starts heading your way.
FIRST, you find out that your listing placement among the other vendors in your area depends solely on your number of customer reports and has absolutely nothing to do with the monthly fee you are paying each month (ie: you have to go out and do the work of getting referrals sent in.). OK, it's some extra legwork, but it's doable. The problem is, Angie's List neglects to disclose another tiny piece of information: THE ONLY reports that affect your listing/rating/placement, etc. are reports given by existing "members" (ie: homeowners who pay to have access). Customer reports that you obtain do not count because they are "unverified", unless the reports are from paying members of their website. In fact, these reports won't even show up on Angies List!
Simply, unless all of your clients are existing, paying Angie's List members, your monthly cost to advertise on Angie's List is a COMPLETE waste of time and money.
While we have received excellent and much appreciate reviews from our clients, I have never received one customer from Angie's List and I am canceling my contract.
P.S. There is a penalty fee for early cancellation. Of course there is. :) I hope this is informative for any of you considering buying into a program like this. [emphasis added]
Angie's List responds:
Angie's List – Hi Dawn, we’re sorry you’ve been dissatisfied with your advertisement. You’re right that contractors can pay to offer a discount to Angie’s List members, but they cannot pay to be listed on Angie’s List. And only contractors that receive an A or B rating from our members are invited to offer a discount. Our members make their hiring decision based on overall grade and number of reviews and when there’s an added discount to that stellar track record, it’s a bonus for them. Most contractors love that only member reviews count toward their overall grade. But we do allow reviews from non-members and anyone can view those comments anytime on your profile page. The grades just don’t count until they become a member. Contractor results are sorted based on discount and then the number of reviews. At any time our members can choose to change that sort logic. If you’d like to talk in more detail or have any more questions, please contact Tom Hulbert, Director of Ad Sales, directly at 866-543-5478 ext 3960 or email@example.com [emphasis added]
Is that double talk, or what? Is it any wonder that Angie's List prefers to communicate with its advertisers privately?
The dilemma results in such technological (and mental!) gyrations as this, from the Angie's List website:
Can a service company or health professional pay to change their rank on Angie's List?Language contortion, again. But let us consider these last several points [from Angie's List] together:
Angie's List has several search settings. There is a search setting that will return profiles that have coupons/discounts first, but members can choose not to display these results.
This search option doesn't change the grades the company or professional has earned, and they cannot pay to show up at the top of the List for every search under any setting.
"...contractors can pay to offer a discount to Angie’s List members..."So, businesses
"There is a search setting that will return profiles that have coupons/discounts first..."
"...they cannot pay to show up at the top of the List for every search under any setting..."
Is this any way to run a business?
Other recent discussions of Angie's List and Rush Limbaugh on Daily Kos include Angie's List's CEO is a doctrinaire far right operative 1st and a CEO 2nd?, and Three Ways to Stop Rush Limbaugh. I also wrote a diary a few days ago about Rush Limbaugh and Angie's List.