Advertisers are courting social-networking users because their opinions matter. More than 65 percent of 112,000 people surveyed said they were more likely to purchase products or services that they learned about in social-networking services, according to Powered Inc., an Austin-based company that helps Sony Corp. and Hewlett-Packard Co. with their social-media strategies.

Edelman Trust Report finds that trust in a recommendation, based on a personal experience of “a person like me”, has grown from 22% to 58% in just 6 years. AdAge reports that

77% of U.S. consumers trust businesses less than they did a year ago; consumers trust their peers’ opinions online more than any other source.

So what is the meaning of “peer” or “a person like me” in an environment where most recommendations are anonymous, and the privacy of the recommenders is carefully protected? We all are too well aware of unscrupulous, and not too smart, marketers who tried to game the system with widely publicized failures. However that very publicity seems to give us even more confidence in our “peers”, as it makes us believe that the sheer number of reviews and recommendations of the authors, and the transparency of the Internet, will protect us from being manipulated.

Sometimes positive recommendations of people I know, will cause me not to buy the recommended product, as I am aware in our taste or skills difference. So how can we rely on the experiences of people we don’t know at all? I suppose there is a lesser of the two “evils” compared to the traditional advertising or “unbiased” review by paid experts.

As we have been working on mining Consumer Insight from unstructured and untagged data, I have been thinking of ways to algorithmically weight and/or score the “Authenticity” and “Authority” of authors in context of their product reviews and recommendations.

I believe that when someone (I hope that is me) manages to figure how to do it, it would bring even more value and meaning to the market. It would enable us to make more personalized choices.

Another thought, related to peer2peer marketing, came to me while I was exploring Cloud Expo grounds of the Dreamforce 2009. Not a single Dreamforce exhibitor with “Marketing” in their name, was demonstrating any functionality or service focused on learning and/or managing Customer Experience. I suppose to most people “Marketing” is still “Shouting”.

Joel Rubinson, Chief Research Officer of the ARF, in his post “To understand social media, marketers must drop the C word”, quotes

“Lynne d Johnson, the ARF’s head of social media (formerly head of communities at Fast Company mag.) asked our expert panel about ROI, it was clear that we don’t have all the answers yet.  However, the answer I liked best was Heather’s; “What is the ROI for you to send your mother a mother’s day card?”  So I might add, what is the ROI for authenticity?  Who cares?  What kind of company do you want to be? “

I have an answer for Ms. Heather Maxwell from General Mills’s rhetorical questions – I am sure that among other things, General Mills wants to be a profitable company. Perennially unprofitable companies have a nasty habit of disappearing from the business landscape, along with the employment they provide to social media visionaries.

I am not arguing against authenticity, transparency and other virtues mentioned in Joel’s post, in fact I strongly support them. However dismissing core business value, just because we cannot figure out a sound methodology to formalize it, is disingenuous and is bad advice.

ROI has nothing to do with authenticity – it is a tool to help us make choices. The choices we make can be authentic or not.

Next time you have to choose between an invitation to a friend’s pool party and helping your uncle with a move, think of ROI and be authentic.