Should You Use Yelp Advertising?Mar 15th, 2010 | By James Leahy | Category: Your Company On The Web
Yelp is the review site for your donut shop around the corner, or a large company’s products. A question I am asked frequently is: Is it cost effective to advertise on websites like Yelp? In this post, I’ll explain Yelp and its uses for your company.
Note: See follow-up posting on Yelp services bases on dissussions with clients and with Yelp at the end of this post.
The answer to that question is: possibly. It depends on the type of business you have, who your customers are, and a few other considerations. Let’s divide this answer into 3 clear and brief sections:
1. Which businesses can benefit from Yelp
2. The benefits and dangers of yelp to your business
3. How Yelp advertising works
5. New: Follow Up
1. Which businesses can benefit from yelp
So, you have a business, and you want to get the word out? Should you advertise on Yelp? It depends on your products and/or services. If you have a small business with products, Yelp might be for you. For example: Let’s say you have a corner donut shop (The reason for choosing this will be very apparent later in this post). If your donuts are great and your customers love you, then Yelp would be a great method. People talk about what they really like or dislike, and your customers can do a lot of word-of-mouth advertising for you. This can bring in substantial new business, because people trust “crowd thinking” in today’s marketplace that is bombarded with advertising. The same can be true with most business that can benefit from word-of-mouth recommendations, such as a local I.T. company, cleaning services, a handyman, gardener, landscaper, restaurant, curio shop, etc. I’m sure you see the pattern here.
On the other hand, if your business customers are not geographically centered around a smaller location or is global, Yelp might not be for you. However, if your business serves local areas but is still national or global, Yelp might be a good choice.
My company did a spec, website, online ordering, and print materials for a gourmet donut shop, donutdujour.com, in the San Francisco Bay Area in Los Altos. It turned out that the word on their quality was getting out. One customer said: “These are the best donuts I have ever had in my life!” So we posted links to sites like Yelp and others right on the top of their home page. This brought more business to them, as people could immediately see the connection, and their sweet tooth did the rest and brought them to their shop. For them, advertising could only speed up their growth. It would be a very good thing.
2. The benefits and dangers of Yelp to your business
Yelp can be a double-edged sword. It can really help a business, or really hurt it. It depends on one very important thing: quality. If your product or service is great, Yelp is for you. If it is bad, everyone will find out – and quickly. People like to tell others about a great restaurant they found, and word gets around. Same thing if the restaurant’s quality goes down. Word will get out. But on Yelp, it happens very quickly, because people do not have to be on the phone or in person with each other to talk about it.
This is the reason I brought up the gourmet donut shop in the beginning of this article. Yelp helped their business to soar. Customers were pouring in, caterers were calling, corporations were calling for their services. Then, the main donut maker retired and they decided to sell their great business. It was sold recently, near the end of 2009. The new owners were not interested in Yelp, having a website, or their signature “mini donuts”, which were a fabulous hit all around the SF Bay Area. The result? Word got out, and it got out quickly. Now Yelp was the other side of the double-edged sword and customers were going elsewhere in droves. Check out the latest Yelp reviews. One says: “Um, new owner alert….”
All the work: The exhaustive marketing they did, customer relationships, outstanding quality products, social marketing, a fabulous website (shameless plug here for me) all went to waste because the new owners are not thinking in the 21st century internet social world. They don’t grasp that they had the potential to be a leader. They turned into a run-of-the mill corner donut shop – something to pass by. The original owners were even invited to the Rachel Ray show to showcase their product and business model. It could be that they ‘get it’ and see their potential, but for the mean time, it is not happening.
3. How Yelp advertising works
Well. you’ve seen how Yelp affects business, but how does it work? Google puts a collection ads on the right and top of search results, whereas Yelp puts only one ad on a search result. I spoke to Yelp on this, and their response was: ‘We want to maintain a small town feel to the results of searching. Rather than put many ads on a search result, we put only one, and vary it based on the campaign that a business chooses.’ Google tried to buy Yelp recently, but Yelp declined. The key difference between advertising on Yelp verses Google: Ratings. If Google figures out how to do ratings on search results, they would be a serious competitor for Yelp, and Yelp knows this. For this reason, Yelp keeps it’s model working, and it works very well – for business with quality products and services.
Take a look at this sample search for a bakery to the right. The top listing is in a light yellow color. This sets it apart but it doesn’t look like an ad. It is. This company paid to have their listing at the top. Because it is discreet and well worded by the company, it does not look like a scary, in your face ad. This subtle, internet culture manner of advertising is very appealing to today’s buying public.
Yelp does a good job at mitigating companies from over competing with each other when they place ads.
This helps to maximize your company’s ad potential, while not penalizing you because another similar company happens to have a similar ad. Google can’t do this, so they have a melting pot of ads all competing for your attention. This is one key reason I am sending certain customers to Yelp instead of Google. You can see this from this screen shot and comments to the right.
What about getting a few bad ratings? Internet savvy searchers are smart enough to figure out that a few bad reviews and many good ones means a company is good. Some companies are not smart enough to figure this out, as did a dental group we did a proposal for. No other dentists were using this method in their area, so the potential for them was quite high. However, one or two of the dentists were afraid that Yelp and ratings would hurt them. In this case, they were probably right, as it appeared that those two dentists were not getting good reviews from their patients.
Based on this article, you will likely be able to determine if Yelp is for you. Feel free to contact my firm with questions or a proposal. We’re honest about advertising dollars and if they will help or be wasted.
I spoke with Yelp, and various clients who have used Yelp services. Based on our experience do date (March, 2010), Yelp’s business services may or may not yeild the results you are looking for. One client spend $$600 for a regionalized business listing, and saw no results.
Here is our response to Yelp:
Two items for you:
- I think Yelp should review their automatic filter. There was nothing biases or inflammatory about the review that mysteriously dissappeard.
- I am going to pass on Yelp services for now. After discussing it with a few clients who have used it, they did not see a measurable return on their investment dollars and so stopped advertizing with Yelp. If Yelp could put together a case study or two with measurable results, I would reconsider it. But the feedback I am getting from business is that it’s not worth it to them currently. Without some definitive case studies, I can’t recommend Yelp to my clients either.