Yelp: The Good, The Bad, The Despicably Ugly

by Adam Kreitman

If you own a local business, the game’s changed.

It used to be Google+ Local (or Google Places or Google Maps or whatever it’s called this week) was the only game in town and got the lion’s share of the Local Search action.

And because of its prime real estate on Google and on Android smart phones, local business owners still need to focus most of their attention on Google+ Local.

But, with some major recent developments, Yelp has positioned itself to be almost as important to local business marketing as Google.

While there’s a lot to like about Yelp, there’s also a lot to watch out for as one of my clients recently discovered (and, unfortunately, he’s not alone).

Let’s take a closer look at the good, the bad and the despicably ugly when it comes to Yelp…

The Good

The two huge developments driving Yelp’s rise are:

1. A deal with Bing which makes Yelp’s reviews and content a big part of Bing Local’s search results. Bing isn’t huge, but it’s still about 16% of the search engine market (and rising) which makes it hard to ignore if you’re a local biz owner.

2. Yelp’s integration into Apple Maps and Siri. With the recent OS upgrade, most Apple users will be relying on Apple Maps instead of Google Maps to find local businesses (despite the initial problems with Apple Maps). And Yelp, which had already been a key source of data for Siri, is going to be a big part of the local business results Apple Maps users will see.

Here’s what else to like here:

  • Yelp has over 30 million reviews, 78 million unique monthly visitors and its mobile app is viewed on more than 7.2 million unique smartphones. Those numbers should only grow with the Bing and Apple deals, making Yelp a key hub for people to find local businesses.
  • The mindset of Yelp users. People are on Yelp toward the end of the buying process. They’re actively looking for a local business to spend their moolah in. That makes it more appealing than say, Facebook paid ads, where people are looking to be entertained, not buy.
  • If you own a local business you could (and should!) claim your business’ Yelp listing for free. Add photos, a description, hours, etc. to make your listing more appealing. This will help it get found by others and make it more attractive to those who do land on your Yelp listing.
  • Having a lot of positive reviews on Yelp can have a very positive impact on the financial performance of your business. A recent study published by professors from UC – Berkeley found that restaurants with higher Yelp ratings were fully booked about half the time while those with lower ratings were only fully booked about a third of the time.

The Bad

Speaking of reviews, that brings us to the bad. I’ll split this into 2 sections…reviews and paid advertising.

Reviews

Getting good reviews can be great for a business. But overall, reviews on Yelp are a mess. Here’s why…

  • Yelp doesn’t want business owners asking customers for reviews, they want the reviews to happen “naturally”. But, if I’m a business owner and know positive reviews can help my business grow, how the hell can you expect me NOT to ask happy customers to leave a review for my business? It’s a dumb, unrealistic policy.
  • There’s also the issue of fake reviews. Knowing the positive influence great reviews can have, some business owners go out (unethically) and try to game the system to boost their business’ reputations.  Some get friends, family and/or employees to leave reviews. Others will actually pay for good ones.
  • There are also fake negative reviews. These could be posted by competitors or by others who, for whatever reason, are looking to shred a business’ reputation on Yelp.

To try to address these issues, Yelp has an algorithm that “filters” reviews from their system that they don’t think are legitimate.

I don’t envy the job Yelp has here. It’s got to be darn near impossible to truly figure out which reviews are legitimate and which aren’t.

And this problem isn’t unique to Yelp. It’s something that all review sites deal with and is why reputation management has become such a big deal for local businesses.

But, as they try to sort all this stuff out, business’ reputations are at stake…as are the livelihoods of the business owners and employees. And Yelp does seem to draw more ire about the way they handle reviews than the other local review sites.

We’ll get back to reviews shortly in the despicably ugly section, but first a word about Yelp’s advertising platform…

Paid Advertising

The good thing about Yelp’s advertising program is it can position you highly in Yelp’s search results. (If competing businesses advertise on Yelp, they’ll essentially be in a rotation at the top of the rankings according to a Yelp advertising rep I spoke to.)

That’s all well and good but I still put their program under the “Bad” section of this post for a few reasons.

Cost

500 impressions per month will cost you at least $325. That’s over $1.50 per impression (NOT click, impression) which is very high.

Long term contract

You have to sign up for at least 3 months and the rep I talked to about one of my clients was pushing a 12 month contract.

I’m not a fan of companies being locked into long term advertising packages. If your advertising really works and you can show advertisers it works, then they’ll keep advertising with you. If not, let them move on.

Removal of competitor’s ads from your Yelp page

One of the other “benefits” they tout for advertising on Yelp is that they’ll remove your competitors’ ads from your Yelp page.

Yes, that’s right, if you have a Yelp page and your competitors sign up for advertising, their ads can appear on your page! But if you pay Yelp, those ads can be removed.

Hey, it’s their platform and their rules but, personally, this rubs me the wrong way.

Poor data tracking

I also wasn’t very impressed with the data tracking they provide. They don’t seem to provide good tracking data to help you determine whether your advertising is generating an ROI or not.

The Despicably Ugly

This is where advertising meets reviews. Let me share a story with you…

I have a client who, for a long time, had four 5 Star reviews on Yelp. Last month, however, he got a call from a Yelp rep asking if he wanted to advertise with them. During the conversation she mentioned the negative rating on his Yelp page.

When my client looked on Yelp, all his 5 star reviews were gone and the only one that was there was a brand new 1 star review (and one that, after a lot of research, doesn’t even appear to be legitimate).

The rep explained that the reason the 5 star reviews (some of which had been there for years) had been removed was likely because they were the only reviews those people had ever left on Yelp and, in Yelp’s eyes, that’s a sign those reviews may not be legit.

Then, according to my client, the rep went on to say there are a lot of factors that go into the algorithm that determines which reviews show up and which ones don’t. And she basically made it sound like advertising with Yelp could help promote his positive ratings and bury the negative one.

Last year a class action lawsuit was filed against Yelp for this sort of thing. There were a number of ways business owners alleged Yelp manipulated ratings and reviews including:

  • Businesses that stopped advertising with Yelp saw negative reviews, which had been knocked to the bottom of their page when they were paying for advertising, spring back up to the top.
  • Some claimed Yelp offered to move or remove bad reviews if they advertised.
  • Others claimed that positive reviews disappeared when they rebuffed Yelp’s sales team.

This lawsuit was dismissed pretty quickly so the court didn’t see the merit in it. However, allegations of these sorts of practices still get reported all the time. Though every time they come up, Yelp strongly denies that reviews are influenced by whether or not you advertise with them.

I want to make it clear that in my conversation with the Yelp rep, she did not make any sort of statement that made it sound like my client could make the positive reviews come back and/or bad one go away by advertising on Yelp.

She just said that by promoting the site through paid advertising, we could encourage more positive interaction with customers which could, in theory, lead to more positive reviews.

Should You Advertise on Yelp?

Yelp has a lot of potential. And the site’s prominence in the local space is only going to grow.

However, their advertising program, in its current form, isn’t particularly attractive. And, with their seemingly underhanded practices, they rub me (and plenty of other business owners) the wrong way.

My client may very well end up holding his nose and advertising on Yelp. But, for now, we’re going to hold off and focus on some campaigns we’re running on other platforms. Bing and Yahoo! send about 50 times more traffic to his site than Yelp does so it makes sense to focus there before trying Yelp.

So is Yelp advertising right for your business? Well, as with all forms of advertising you have to test it out, measure the results as best you can and determine if the ROI is there.

And it may very well be there with Yelp, especially in light of their deals with Bing and Apple.

However, I’d be much more likely to recommend it if they made their advertising program seem more like advertising and less like extortion.

Russ Henneberry October 4, 2012 at 3:11 pm

Wow. Very thorough post here Adam. Thanks for writing it!

Tom Sommers October 4, 2012 at 4:12 pm

I agree with your assessment of their filter. Suddenly the 7 reviews I had from patients had all disappeared. I haven’t received anything other than a 5 star review, so maybe they thought they weren’t legitimate. Either way, I discourage patients from using Yelp for that reason.

Bob Sommers October 4, 2012 at 7:05 pm

Great post Adam:
Yelp is becoming a very big player on Bing, Yahoo and Apple. They’ve done a very good job of positioning themselves as the top review site and it looks like Google is making it even easier for them to take the top spot based on their recent review removal process. We’re going to have to learn to play with Yelp whether we like it or not.

What haveyou October 18, 2012 at 6:43 pm

Interesting. This didn’t make sense, though:

“I have a client who, for a long time, had four 5 Star reviews on Yelp. Last month, however, he got a call from a Yelp rep asking if he wanted to advertise with them. During the conversation she mentioned the negative rating on his Yelp page.”

What negative rating? This only says he had four 5-star reviews.

Adam Kreitman October 18, 2012 at 6:55 pm

Sorry for any confusion, the next sentence should clear things up…

“When my client looked on Yelp, all his 5 star reviews were gone and the only one that was there was a brand new 1 star review (and one that, after a lot of research, doesn’t even appear to be legitimate).”

It appears that Yelp uses the appearance of negative reviews as a trigger to contact business owners to sell them on advertising with Yelp.

Thanks!
Adam

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