So many corporations are jumping into the social media space that a small few are defining exactly what you should (and should not) do. Today we are going to look at ePerks.com, a real estate web site that is a lead generator for real estate agents. Looking at the overall reaction that has occurred over the past few months, this will probably be a case of how social media killed the corporation.

From the beginning of June 07, ePerks went into a fairly aggressive campaign of traffic building through various sponsored posts in the blogosphere. To start off this wonderful story, lets take a look at some amazing quotes currently floating around about ePerks:

” Sleazeball lead vendor ePerks.com (corporate motto: “We don’t totally suck because we can’t get anything right!”) has found a great new way to respond to criticism: Censorship.” ~ Gregg Swann, Bloodhound Real Estate Blog.

Beware of ePerks- “Wow, now here’s a company to avoid. I found an ad on Craigslist for real estate Broker help. I know I should have known better, but I want to share this with you so none of you make the same mistake.” - Dennis Pease - ReMax Real Estate

One of my favorite bloggers Mary McKnight created this list of posts which includes hundreds (if not thousands) of comments:

• Ruthann Macklin: Im Mad As Hell-You Will Be Too When You Read About Vlad Zablotskyy and ePerks
• Kevin Wilhelm: Spreading the word about Vlad Zablotskyy and his battle with ePerks
• Susan Goulding: ePerks & Freedom of Speech?
• Sean Giorgianni: Zablotskyy the Scrivener
• Aaron Mallo: Suport Vlad Zablotskyy in his defense against ePerks.com frivolous suit
• Hunter Jackson: E Perks Sues Blogger Vlad Zablotskyy
• Mitch Argon: ePerks Sues Real Estate Blogger
• Dennis Blackmore: Why Real estate Agents are Bailing out of ePerks
• Barry Cunningham: Real Estate Radio
• Aaron hoffman: Nominee for PR Blunder
• Felipe Cook: ePerks and Freedom of Speech
• Don Reedy: Stop ePerks and get sued
• Debra Davis: Atlanta Homes and Condos
• Colleeen Kulikowski: How ePerks, Wake Up
• Gregg and Denise Tomlinson: Eperks using questionable tactics
• Benjamin Ficker: Spreading the word about e-jerks
• Ginger Sala: ePerks vs Blogger: Is free speech at stake?
• Scott Schang: Vlad Zablotskyy - A Martyr for Reputation Management
• Andy Beard chronicling the story
• Greg Swann starting up a fund to help the blogger (Vlad)
• Phoenix Real Estate Guy, Jay Thompson calling them out as EJerks
• Inman News which covered Vlad’s legal problems in March.

Looking at a partial list of 25+ industry bloggers in the real estate industry giving negative reviews, we can now ask the question:

What does that type of publicity do to a company?
Well… it doesn’t help it. That is for sure!

Starting in January, ePerks traffic took a staggering impact as it went from 165k a month to 50k a month within sixty days. After the decrease ePerks never came out of the tailspin.

The reduction in visitors in January of 2008 was just a signal flare, which could have been foreseen by a simple analysis of how the site was performing months beforehand. After the service launched in July 07, ePerks pages per visit (and visit duration) took an identical route straight to the bottom. The site apparently converted very little from an outside perspective since its creation. (keep in mind that the June/July 07 numbers below are artificially inflated as the only people visiting the site those months were employees, developers, and beta users who had a reason to stay on the site.)

The outrage created in the social media blogosphere was simple: dozens of unhappy customers came out and said that they had paid for leads and saw no return. When the social media space errupted, hundreds of negative reviews quickly submarined any attempt to buy more traffic. Spending more and more budget to market a business was simply driving more prospects to turn to the blogosphere and inquire about the quality of the product they were about to spend thousands on.

The impact of the reviews appears to be a rather brutal shot at the bottom line of ePerks. Taking a look at the paid advertising driving a majority of traffic to ePerks, online budgets quickly went to zero (data provided by SpyFU)

At this point in time, searching for the name ePerks on Google takes you to result #3, a proud entry saying “ePerks- A Scam or A Gem? | Go Beyond MLS” which is the original post by Vlad Zablotskyy that may have been the spark that lit a corporation soaking itself in gasoline.

The whole situation highlights some root problems for companies:

1. Make sure you have a quality product and grow your company at an acceptable rate to provide value to your clients.
2. Never call a prospective client an idiot (this was done here.) It will come back to haunt you.
   
3. Never, Ever, EVER, turn your social media relations over to a lawyer.
   

What is your perspective on companies experiencing negative/positive impacts from social media? Does anyone else see this as an increasing trend?