WebProNews

Tag: Yelp

  • Bing Gets Yelp’s Help to Provide Better Local Search Content

    Bing’s stepping up its search game today by adding some heavy artillery thanks to Yelp. The two companies have announced an agreement in which Yelp’s archives of reviews, photos, and other details will be used to surface content to Bing Local search users in the United States.

    The Bing Local search page will soon be displaying a “Powered by Yelp” tag on a page replete with details about a restaurant culled from Yelp’s website. Users will see recently submitted (truncated) reviews by customers, the general description of the business, the business’ overall rating, a map of the location provided by Bing Maps and other assorted information.

    Bing General Manager Mike Nichols said he expects that the inclusion of Yelp’s trove of information will help bring up-to-date, reliable reviews to users. “Enabling people to do more with search involves building a spectrum of features and data that people trust, and teaming up with Yelp is another important step in helping Bing deliver great value to customers,” he said.

    Yelp CEO and co-founder Jeremy Stoppelman concurred, “We’re thrilled that established brands like Bing recognize the value that Yelp communities bring to the local search experience.”

    The new “Powered by Yelp” feature is said to go live today, but I haven’t been able to spot it in the wild with any of the Bing searches I’ve done (even by searching for the example used in Yelp’s example on its official blog). However, Yelp was nice enough to provide an example of what we can expect the new layout to look like:

    Powered by Yelp Bing Local Search

    If you don’t see the new Yelp-infused Bing Local search content today or even tomorrow, don’t worry: full U.S. availability is said to be coming within the next few weeks.

    Bing’s made some significant in-roads lately into making aspects of its search more social with the search engine’s recent three-column redesign that includes related content pulled from Facebook and Twitter familiars. The addition of Yelp to its Local search service should provide users with an even more relevant source information when looking for something more than the average generic blue link.

    Yelp’s having quite the prominent week this week. Today’s announcement of the Bing partnership follows Monday’s reveal that Yelp will be more deeply integrated into Apple’s iOS 6. With one more day left in the week, Yelp still has time to make another game-changing business arrangement before the weekend. Given the high-profile companies the website is rubbing elbows with these days, who knows what Friday could yield.

  • A Few Best Practices for Managing Your Business Online

    As the competitive landscape for small businesses continues to be challenging, it has become increasingly important for small business owners to regularly examine their marketing efforts to evaluate what is working and what is not.

    With the proliferation of marketing opportunities across the web, reviews on social media properties including Facebook, Twitter and Yelp, and hundreds of offerings to measure how effectively your business is communicating its message, it’s easy for a small business owner to feel overwhelmed and under water. Below are several best practices that will help you streamline your small business online marketing and advertising efforts so you can spend more time focusing on your core business.

    Know your online reputation

    With the advent of citizen journalism and the popularity of sites such as Facebook, Twitter and Yelp, where people can essentially post their opinions in an unmonitored forum, it is increasingly important for small business owners to monitor customer feedback so that they can adjust strategies accordingly.

    Maximize your visibility online

    As a small business, you’ll want to ensure you are maximizing your visibility online so that you can effectively compete with other businesses, especially those who are larger and likely have more resources than you do. To do this, you’ll want to consider email marketing, as well as search engine and directory listings, which will increase the number of potential consumers who will be exposed to information about your business. Constant Contact and Orange Soda are both examples of companies that can assist in the execution and monitoring of both email and search engine marketing efforts.

    Evaluate the effectiveness of your campaigns

    You can spend massive amount of money on marketing campaigns, but if you’re not able to measure the ROI of these campaigns, you’re missing out on a key part of the process – analyzing data and understanding how to translate the analytics into actionable insights. While some might argue that it is easy enough to do your own marketing without employing third-party resources, this is less true when it comes to analytics. This is one of the areas where it is highly recommended that you look to a third-party tool to help make sense of your campaign results. Adobe is one such company that can help analyze site traffic and understand key website performance metrics.

    In order to efficiently and effectively monitor and assess your business online, it is important to have a comprehensive view of how your business is being portrayed across the web, how effective your campaigns are in reaching your target audiences, and stay abreast of new tools to help streamline what can often be a burdensome process. By using select third party resources to collect relevant information for your business, you’ll be able to create campaigns that provide a stronger ROI and propel your business forward.

  • Yelp Adds New Updates Feature to Android App

    Local research and reviews platfrom Yelp has just released a new notification bar for Android 3.1, according to its company blog. The new update follows Yelp’s recent addition of private user check-in comments. Here’s a screenshot of the new addition:

    yelp android

    The new notification bar sits at the bottom of the home screen of the app, and alerts a user when a new check-in comment is made by a friend. It also notifies when a new compliment or friend request comes through. Yelp points out that the new toolbar makes it easier to manage social alerts, whether they be new friendships or quick comments.

    Yelp held its IPO earlier in the month, placing shares at $22 a pop. The platform has been making improvements since, likely in part to calm nervous investors, much like Facebook, who has been trying to amp up its advertising segment since its own rocky IPO.

  • Yelp Rolls Out Check-in Comments

    Yelp Rolls Out Check-in Comments

    According to the Yelp company blog, they will now be rolling out with the ability for users to leave Check-In Comments when their friends visit an establishment.

    This will allow users to leave instant reviews or tips when one of their friends goes to a resaurant, or simply “like” the restaurant they’re going to. Or doctor, or retailer, or hotel – Although restaurants are the companies main draw, they also cater to any kind of business.

    Check-in Comments differs from their similar app tool “Tips” in that it is more private. Messages sent are directed at the recipient and cannot be viewed by other customers or the business they’re in. Like all Yelp notifications, you can be alerted to Check-in Comments through push notifications.

    Yelp seems to be adding more social features after its IPO, which debuted last week at $15 a share. Although they are yet to turn a profit, they have still drawn high demand from investors. If they keep pushing social improvements, I think their demand will only increase. Last quarter they were being used on over 6 million mobile devices.

    Check-in comments - Yelp

  • Yelp IPO Sets Price at $15 Per Share

    Yelp IPO Sets Price at $15 Per Share

    The Yelp IPO is on its way and they have set the price at $15 per share, which is a great sign. Initially the stock was expected to trade at $12 to $14 per share, so its priced above target, which is a sign that investor demand is high. The goal at Yelp is to raise $123 million with the offering.

    Yelp is a review site based in San Francisco and has been in business for over nine years. Currently Yelp is valued at over $900 million. Though the site booked revenue over $83 million last year, they haven’t turned a profit since they’ve been in business. In fact, it had a loss of almost $17 million last year.

    Yelp attracts over 60 million unique visitors every month and is best known for their restaurant reviews, but they cover everything from doctors to floor cleaners. They have also hit pretty big with their mobile optimized reviews (almost 6 million devices search them per month).

    According to Yelp’s amended S-1 filing, they plan to offer over 7 million shares of stock with the IPO. Some investors are worried about the true value of a company that hasn’t ever earned a profit. Inc.com has listed 12 things that investors should be aware of with the Yelp IPO.

    Take a lok at what Inc.com came up with:

    * In 2011, net revenue was $83.3 million; in 2010, it was $47.7 million.

    * Significant risks abound: Since the company was founded, it has “incurred significant operating losses.” As of December 31, 2011, the company had an accumulated deficit of approximately $41.2 million.

    * The company may be going through somewhat of an identity crisis. “Our business may be harmed if users view our platform as primarily limited to reviews of restaurants and shopping experiences.” Sure, the company has Yelp Deals, but aren’t reviews its core competency?

    * It seems the company is fearful of talent-poaching from nearby Bay Area competitors. “We rely on the performance of highly skilled personnel, and if we are unable to attract, retain and motivate well-qualified employees, our business could be harmed.”

    * Jeremy Stoppelman, the company’s CEO, will take $300,000 salary.

    * Company costs are soaring. In 2011, costs surged to $99.5 million, up from $57.2 million in 2010, driven mainly by a huge boost in sales and marketing ($54.5 million).

    * As of December 31, 2011, “approximately 18 million reviews were available on business profile pages, approximately 5 million reviews were being filtered and approximately 1.8 million reviews had been removed from the platform.” In other words, Yelp attracts plenty of reviews, but 10 percent of them are basically spam.

    * Unlike Facebook, Yelp needs the dough. Their balance sheet shows they’re running out of working capital, going from reserves of $29 million in 2010, to $19 in 2011.

    * Yelp had 66 million unique visitors on a monthly average basis for the quarter ended December 31, 2011, up 67 percent from the same period in the prior year.

    * There were 606,000 claimed business locations as of December 31, 2011, up 97 perecent from 2010.

    * Yelp recognized revenue from about 24,000 active local business accounts for the quarter ended December 31, 2011, up 109 percent from the same quarter in the prior year.

    * The company plans to trade on the NYSE under “YELP.”

  • Yelp Brings Something Yummy to the State of Denmark

    Attention Dutch gourmands both green and seasoned: ready your palates and forks and save room for your typing skills because Yelp has announced that their network of customer reviews and rankings of restaurants and businesses are now available to your country.

    As of this past Friday, April 20, the online community-powered site that is often the first resort for people looking for reliable customer feedback is now offering Danes the feature to create accounts on Yelp.dk in order to share their raves and revulsions about local businesses. For those on the go, Yelp’s apps for Android and iOS will also be made available in Denmark.

    Miriam Warren, Vice President of European Marketing for Yelp, anticipates that the arrival of input from the denizens of Denmark will offer some straight-forward if not amusing reviews for Yelpers. “When you add the infamous honesty and dry wit of the average Dane to their attention to detail in all that they do (especially with regards to food preparation), we believe we have the perfect fundamentals for a thriving Yelp community,” she said in an official statement.

    Yelp.dk will support a variety of languages, such as Danish, Swedish, Dutch, French, German, Italian, English, and Spanish so as to bolster the Yelp experience to an international level. Denmark is now the twelfth country to get Yelp support in Europe.

    Initially, Yelp says that it will develop the Danish site in country’s capital, Copenhagen, and then branch out on a city-by-city basis.

    Lastly, but not least for businesses hoping to take advantage of Yelp’s launch of a Denmark-specific site, business owners will also have access to Yelp for Business Owners. This feature will be of special importance now that Yelp has begun to offer an improved set of metrics to business owners so they can better promote their businesses on the website.

  • The Cash Value of Social Media Information [Infographic]

    Ever wonder how our social media platforms make enough money to continue to operate? What is the value of the information we send to our social media profiles? These are interesting questions and the folks at backupify.com have been wondering about the same thing.

    Backupify is in the business of backing up data in the cloud, and so for them, their next infographic is a handy tool for illustrating the inherent value of certain varieties of data.

    If you’re a user of social media or an advertiser on any of the following social sites, this graphic is certainly worth taking a look at. The comparisons across different platforms are interesting, and the dollars generated are shocking in some cases.

    The way organizations and individuals disseminate information is changing and so are the ways brands and products are advertised. Knowing the value of social media ad space is a first step to understanding how the social media is making a lot of folks the big money.

    Take a look:

    How is social data valued

  • What is a Tweet Worth? [INFOGRAPHIC]

    Tweets, wall posts, check-ins, pins, pokes, etc. are all content of value to the social media companies that host them. And now Backupify, a cloud data backup service, put together a chart representing their study on what these actual values are. Backupify was able to deduce general content values by taking into account estimated valuations of companies against correlating number of users.

    The estimates for how valuable each user is to his or her respective network are:

    Path: $12.50 per user
    Instagram: $18.52
    Yelp: $21.21
    Pinterest: $28.09
    Foursquare: $40.00
    Twitter: $71.43
    Dropbox: $80.00
    LinkedIn: $104.46
    Facebook: $118.34

    Delving even further, Backupify took into account each company’s estimated annual revenue and divided it by the number of user items, i.e. tweets, tags, wall post, searches, etc.:

    Tweet: $0.001
    Facebook share: $0.024
    LinkedIn search: $0.124
    FourSquare check-in: $0.40
    Path update: $0.50
    Yelp review: $9.13

    Yelp reviews are worth almost $10?

    backupify infographic

    In related news, Instagram’s $500 million valuation has been met with a bit of skepticism, though the company is set to receive $50 million in venture capitol in a Series B funding round led by Sequoia. Also, just now, it has been reported that Facebook acquired Instagram for $1 billion.

  • New Yelp Metrics Improve Its Use For Business

    Yelp is one of the better social media services for small businesses that want to track how their brand is doing out in the real world. The site has introduced some new metrics that makes the site even more attractive to small business owners.

    Announced today on the Yelp blog, the new “User Views” graph displays the traffic that your unique Yelp page is generating. The new metric also allows business owners to track traffic over a period of 30 days, 12 months and 24 months. Even better, the service also shows businesses how many times they showed up in Yelp search results over the past 30 days.

    Yelp Metrics Improve Its Use For Business

    The new metrics also track how users are interacting with your business. Under a new section called “User Actions,” it tracks how many mobile check-ins and calls were made to your business. On top of that, it tracks how many clicks were made to your Web site from Yelp as well as how many people called your business through the Yelp app. Other tracking features include the number of user uploaded photos, how many times users got directions and the number of Yelp bookmarks.

    Yelp Metrics Improve Its Use For Business

    If you want to take advantage of these new features, you can sign up for a Yelp business listing. This allows your business to have a special page on Yelp that helps drive traffic to your Web site and hopefully your business itself.

  • Apple Fixes That Yelp/Siri Search Problem In iOS 5.1

    When Siri arrived in the iPhone 4S last year, one of the supporting reasons that made it so useful was that Apple partnered with Yelp to provide local search results for restaurants and other businesses, replete with Yelp’s star ratings to help guide your appetites.

    The integration of Siri with Yelp was a boon for the company, as CEO Jeremy Stoppelman explained to The San Francisco Chronicle:

    “The iPhone launch and the subsequent opening of the App Store was a bit of an atomic bomb in our space. It really changed the landscape forever. We always thought mobile would be a big part of what we did, but until the iPhone there was no mainstream mobile web browsing experience. We, of course, are all Apple fan boys and in 2008, most of the engineering staff had iPhones. So we were very excited about having an app that would marry this content with the user on the go. It just changed the game. I find the search experience on Yelp when using an app is just far more intuitive than on the web.”

    If you’ve been one of the many, many Siri adopters, you’ve probably noticed that when you tell it, “Find me some tacos,” or “Indian restaurants,” you’ll be presented with a list of restaurants along with the Yelp ratings, but upon selecting one of the results… you don’t go to Yelp. You’re taken to Google Maps.

    The switcheroo was documented by SearchEngineLand last year. Once you’re on the Google Maps screen that shows the location of the place you want to go, you can see the location’s basic info (phone number and address) but there’s nothing Yelp-y about it. To access Yelp reviews or other details about the restaurant, you’d need to close the Maps app, open the Yelp app, and then type in the restaurant’s name in order to read any reviews and whatnot.

    In other words, Siri’s search results via Yelp fell short of how helpful they could actually be if Siri isn’t going to utilize Yelp’s stockpiles of business information.

    Today, though, Yelp announced that all of that is changing. With the launch of iOS 5.1, Apple updated the Siri/Yelp integration so that when you search for local businesses via Siri and select a search result, you’ll be taken immediately to that business’ Yelp page where you can see the reviews, business hours, photos, and so on. Yelp provided the demonstration video below to show off the improvement.

    It’s not that the original redirection to Google Maps was a terrible thing – you’ll still need to know how to get there. But now you can more easily find more information about the business before you decide if it’s even worth the trip.

  • Are You High on Yelp?

    On Friday, popular online review site Yelp began trading on the New York Stock Exchange. The company had a successful first day with shares jumping from $15 per share initial pricing to nearly $25 per share, making early investors very happy.

    While the shares dipped 14 percent yesterday in the company’s second day of trading, some fluctuation is to be expected in the early days of trading. However, one can’t help but wonder if the high about Yelp will continue or diminish.

    Can Yelp meet investor and consumer expectations going forward? Let us know what you think in the comments.

    While Yelp has experienced significant growth since its launch in 2004, the company has also experienced its share of criticism, which is the reason people are questioning its future. Most people associate Yelp with restaurant and other business reviews, but it is actually an Internet advertising company. In other words, it competes with the likes of Google and Facebook.

    As we know, this marketplace is very competitive and is growing. Foursquare is even breaking into the review space by allowing users to offer local recommendations and tips after they check in to places of business.

    For Yelp, this means that it has to defend its position. The company has had a rough road in this sense as it has been accused of ripping off the small businesses that advertise through it. Rocky Agrawal on VentureBeat wrote:

    “At a time when much online advertising is being sold for 60 cents per thousand impressions (CPMs), Yelp is charging some local advertisers $600 per 1,000 impressions.

    That’s not a typo. Yelp is charging small businesses 1,000-times the standard online CPM rates for local ads that appear on Yelp. Even when compared to its own ads for national advertisers, the company is charging a 100x premium.”

    Unfortunately, for Yelp, many of its users feel that Agrawal presented an accurate portrayal of how Yelp’s advertising model works. In a follow up article written by WebProNews CEO Rich Ord that focused on “defending online advertising,” we received numerous comments similar to this one from AJ:

    Is Yelp misleading its advertisers? If so, how? Please share you experience with us.

    Francis Gaskins, President of IPODesktop In addition to these ongoing advertising concerns, there are also other issues regarding its advertisers and the economy. Francis Gaskins, the President of IPODesktop, told WebProNews:

    “In this flat-lined economy, customers that Yelp deals with are not experiencing a lot of growth, so they have to claw and fight for every ad dollar that they get.”

    This information raises some big red flags for investors in terms of long-term profitability, which is another questionable area of the company. Yelp has always struggled with making money, and the following chart shows that the company is actually losing money.

    An even greater red flag for analysts and investors, however, is the fact that Yelp relies on its competitor Google for traffic, which, of course, ultimately means that it depends on it for revenue as well. According to Yelp’s S-1 filing, the company revealed just how dominant of a role Google plays in its business:

    “Google in particular is the most significant source of traffic to our website accounting for more than half of the visits to our website from Internet searches during the year ended December 31, 2011.”

    Incidentally, Yelp has taken a particularly outspoken stance against Google claiming that it shows favoritism toward its own products in search results. The filing also stated:

    “Google has removed links to our website from portions of its web search product, and has promoted its own competing products, including Google’s local products.”

    Yelp’s stand against Google is similar to that of FairSearch.org, which is an organization made up of various companies that believe Google has monopoly power. The group and Yelp are working to encourage policymakers to take action against the search giant in order to, based on information from FairSearch’s site, “protect competition, transparency and innovation in online search.” Yelp has even testified toward this effort, but at this point, the government has not acted.

    When WebProNews spoke to Gaskins about these issues, he equated it to Demand Media/Google situation. If you remember, the companies had a deal where Google directed searches to Demand Media’s eHow platform. In Google’s infamous Panda algorithm update, this all changed.

    “I don’t know whether the people buying the stock… at $25 or $24 realize that Google can turn off half their revenue faucet by changing the algorithms and putting their own searches up there,” said Gaskins.

    He went on to say Google could easily do this since it is a private enterprise that controls its own products. As he explained, Google doesn’t need to worry about what could happen to Yelp.

    However, it is these concerns that have Gaskins and other analysts qualifying Yelp as a risky investment. Rick Summer, an senior stock analyst, recently wrote why his firm Morningstar wasn’t applying for Yelp’s IPO:

    “Unfortunately, the company faces challenges translating the small advertising budgets of local businesses into profitability, as about 70% of ad revenue is eaten up by sales and marketing expenses. Although we ultimately expect operating leverage and resulting profitability, success is far from certain.”

    It’s clear that Yelp has several challenges to overcome, but only time will tell if it can prove its naysayers wrong. Do you think it can? We’d love to hear your thoughts in the comments.

  • Yelp IPO Is Here: Trading At $22 Per Share

    The Yelp IPO is here and trading at $22 per share! There’s 7.1 million shares being offered in an effort to raise over $106 million. Look for it under the ticker, “YELP” on the New York Stock Exchange. Originally priced at $15 per share, the price is increasing quickly!

    You can expect something will have to change at Yelp in order for them to get out from underneath their operating costs. Marketing expenses ate up more than 65% of their revenues last year, and experts say that they don’t see a clear path to sustainability for Yelp yet. So it could be a risky investment, but nothing a lot of organizations haven’t gone through while reinvesting heavily to grow operations.

    Here’s an infographic from Statista to help us understand Yelps operations and financials a little better:

    Source: Statista

    Also remember, Yelp depends heavily on Google for traffic. This could be a potentially disasterous situation if Google decides to snub Yelp and promote its own operations, which offers very similar services.

    Senior managing partner of IPOboutique.com commented on what he thought about the Yelp IPO and their reliance on Google:

    “Although I expect to see a pop at the open due to demand (Yelp was twenty times-oversubscribed), losses will likely continue to grow or come down marginally, and I don’t see it as being a profitable entity. There’s already much competition in their arena, and they need to seriously worry about Google,”

    These are words of wisdom. The Yelp IPO is here and currently trading at $22 per share, but be careful. Invest wisely and don’t put all your eggs in one basket. When one goes down another will most certainly go up. Look for these relationships and try to balance your portfolio.

  • Yelp Could Reach Value Of $840 Million With IPO

    After three months of preparation Yelp has reached a consensus about a value for their stock and is almost ready to go public. Currently they report a target of $12- $14 per share and at that price, value of the company could soar to around $840 million. The shares will be made available on the New York Stock Exchange (NYSE) under the ticker symbol “YELP”.

    Yelp offers recommendations and reviews for visitors on everything from social functions to saturday night entertainment. As of the end of 2011, they attract nearly 61 million unique visitors. A couple of years ago Google was interested in purchasing Yelp, who turned down the $500 million offer.

    Because the timing of the IPO is so closely positioned with the much anticipated Facebook public offering, Yelp will have to be skillful about how it manages the effort. If they can illustrate the strength, vitality, and versatility of their brand, they may prove to be one of the most profitable internet IPOs to date.

    Dave Smith of International Business Times conveys the potential of Yelp and the forthcoming IPO:

    “Yelp will be a great stock to buy, and it’s probably one of the few Internet companies that is actually worth buying.”

    “More so than Facebook, Yelp stock could be extremely valuable because Yelp has so much more room to grow, while Facebook users lament when the platform makes any changes whatsoever.”

    So it will be interesting to see what happens when these stocks finally go on sale, and even more interesting when we see which of them pays off, if not both. I wouldn’t want to gamble on either one of them being a huge money maker right now; the market is very fickle at present.

  • Yelp Check-In Title System To Match Real-World

    Yelp has made some changes to their title system to make their check-in system more of a reflection of the real world. For those of you who don’t know what a check-in is, Yelp offers this explanation:

    “A check-in is a simple way to keep tabs on where you’ve been, broadcast to your friends where you are, and discover more about other people in your community. After a couple of check-ins at a business you are given the title of “Regular” and if you have the most check-ins there you become the Duke (or Duchess).”

    Also Yelp offers this advice about the system to users:

    * You still have to be a repeat visitor to a business to be a Regular there, but yelpers who have visited a business more frequently and more recently are given a higher Regular ranking.

    * The Regular ranked #1 now earns the business’ Dukedom crown, not just the person with the most check-ins there all-time.

    So the more you visit a business or online merchant, the quicker you’ll reach Duke or Duchess status, but this will also make it easier for others to challenge your position. You will find a lot of people on Yelp who know about the latest and greatest places to hangout, eat, or drink. You will be able to gain an insiders perspective from locals and others who frequently visit establishments.

  • Yelp Sets Share Price For March IPO

    In November we reported that Yelp had filed for its IPO. The original filing stated that Yelp intended to raise $100 million. Yesterday Yelp filed paperwork with the SEC to set its share rpice and the date of its IPO.

    According to the new filing, Yelp is set to go public on March 2, and will trade with the stock symbol YELP. Initial share prices will be $12-14 per share. The company intends to sell 7.15 million shares, raising $100 million.

    Yelp provides local search and review services via their website, yelp.com, and apps for a variety of mobile devices – Android, iOS, BlackBerry, Windows Phone, and WebOS. The service allows users to find a variety of local businesses, check reviews and ratings, see business hours, and more. It also provides navigation assistance to help users find where they’re going.

    Yelp has come a long way since late 2009, when it was in negotiations for a buyout by Google. Yelp has millions of visitors every month and generated nearly $60 billion in revenue in the first nine months of 2011. The vast majority of its revenue comes from advertising. The IPO filing suggests a valuation of $839 million for the company.

  • Online Advertising is More Than Just Clicks!

    Online Advertising is More Than Just Clicks!

    I noticed a VentureBeat article that makes me shake my head in amazement at the apparent lack of understanding of online advertising. The sensationalistic headline, “Yelp advertising is a rip-off for small advertisers” reveals a simplistic viewpoint on the value of targeted online advertising. Yelp is not ripping off small business advertisers, but in fact is providing a platform that business are benefiting from whether they are paying Yelp for prominent placement or not.

    However, my article is not really as much about Yelp as it is about defending online advertising, which the article in question attacks with a vengeance. In essence, the article paints a picture of online advertising where all ads should be sold for 60 cent CPMs regardless of whether they are geo and industry targeted or provide branding with prominent placement. Don’t charge too much or you might be accused of being a “rip off”!

    Additionally, the article attacks the very core of online advertising by stating, “”For online advertising, I strongly recommend against commitments and impression-based advertising.” In short, the article advocates that all advertising be priced like Google Adwords and Facebook ads or similar. As marketers know, online advertising is more than just clicks. It’s about reaching your potential customers and pay per click (PPC) advertising isn’t the only way to go about that.

    >>> Do you feel that Yelp is a rip off? Do you believe that all online advertising should be cost per click (CPC)? What is your experience with online advertising, good or bad? Comment Here…

    Let’s give this article a proper dissection:

    1. The article states, “At a time when much online advertising is being sold for 60 cents per thousand impressions (CPMs), Yelp is charging some local advertisers $600 per 1,000 impressions. That’s not a typo. Yelp is charging small businesses 1,000-times the standard online CPM rates for local ads that appear on Yelp.”.

    This simply doesn’t make sense to anyone who has experience in online advertising. Sixty cent CPM’s are NOT the standard online rates for local ads. That is a rock bottom rate that large ad sellers charge for non-targeted inventory. To get placement on a premium site that is geo targeted with a very specific industry niche, advertisers will pay substantially more, even a $600 CPM. Sometimes much less, but certainly not a measly 60 cents!

    2. The article states, “Now consider the types of local Yelp ads that small businesses buy: In this scenario, the ad goes to the advertiser’s Yelp review page. That’s a page where users are free to leave any kind of review for the business, including ones that trash it. That ad runs about a $600 CPM.”

    What about TripAdvisor or Urbanspoon? The concept of reviewing restaurants or other businesses does not make paying for a premium placement a bad decision. Obviously, a business should make sure they are providing a great service and excellent product before advertising. However, it is pretty naive to believe that it’s somehow stupid to pay top dollar for a highly targeted ad spot on Yelp simply out of fear that someone could “trash” your business. As businesses in the service industry know, review sites and apps like Yelp can drive significant new business for free and it seems to me that paying for that top placement might even drive more business.

    3. The article states, “It’s common for more targeted inventory, such as the type that Yelp provides, to command higher CPMs. But triple-digit CPMs are extremely unusual.”

    At least the article finally acknowledges that targeted ads are worth more than untargeted ads. However, the assumption that it is “extremely unusual” to charge over $100 CPM’s and therefore makes Yelp a rip off is inaccurate. Ad spots are priced based on demand for those spots by advertisers and obviously Yelp has more demand than they can deliver for many of those top spots on review pages. There is good reason for this – businesses want to be the dominant brand in their service category in their locality. To many businesses, that is worth paying a premium and they don’t consider themselves “ripped off”. If you own Rory Lake’s Karaoke Dreams in Chicago, you want to be the featured listing for “Nightlife in Chicago”. Rory is not making that decision because of a high or low CPM, he is spending cash with Yelp because he wants to be the dominant brand in the nightlife category. He wants everybody that uses Yelp to at least consider stopping by Rory Lake’s Karaoke Dreams. All advertising isn’t about the cost, sometimes it’s simply about the exposure, despite the price.

    Rory Lake's Karaoke Dreams in Chicago on Yelp

    4. The article states, “At the high end, it’s a $600 CPM. At the low end, that’s a still eye-popping $367 CPM — more than 10-times the rate of a Super Bowl ad.”

    Is the writer suggesting that no ad should cost more on a CPM basis than Super Bowl ads? Super Bowl ads are by their very nature only loosely targeted, skewing somewhat more male and youthful, but not much more targeted than that. After all, Super Bowl 2012 set a record as the most-watched television show in U.S. history because almost everybody from young kids to Grandma watched it. Again, targeting increases the value for advertisers and thus increases the cost. Yelp is not only targeting by business type, it is also targeting by geo location. This adds significant value over a Super Bowl ad on a CPM basis. Not to mention that with a Super Bowl ad, a business that spends $3.5 million for a 30 second spot deserves a little CPM discount.

    5. The article states, “To make matters worse, Yelp requires a 12-month commitment for these rates. Even if Yelp doesn’t deliver your business a single customer, you’re on the hook for $3,600.”

    Paying $3,600 to be the top position on a popular site and app like Yelp for your business category and in your locality is a deal if your business needs branding. It’s about being in the right spot at the right time in order to attract customers. As with all advertising, the hope is for all new customers to become regular customers, thus paying for the cost of your Yelp ad. If you’re a donut shop, would you want your competitor’s shop to be at the top of Yelp or would you consider paying to make sure you are? Additionally, advertisers on Yelp are reaching potential customers that have only one reason to use yelp; to purchase a product from them or their competitor. With that in mind, a $3,600 fee to reach real potential customers rather than just Facebook clickers can be a great deal.

    6. The article states, “For comparison, Facebook only requires that you set your budget to $1 a day and does not have a commitment. A business could try it for a week, see if it performs and then decide.”

    It is very misleading to say Facebook only requires $1 a day, since if that’s your budget you will not even get one single impression of your ad run on Facebook. To be fair, Facebook is a cheaper alternative for advertisers. However, to be fair to Yelp, it is not even remotely comparative. Facebook clicks range from around 50 cents to $3, but the targeting and volume of clicks would not match Yelp’s in my experience. Facebook allows targeting by location and interest. However, the interest is based on people’s selection in their profile or what they have “liked.” It’s not all that scientific because if I “liked” a restaurant on Facebook, it does not mean I would click a different restaurant’s ad in the future. That’s why Facebook ads are not great for micro targeting and Yelp ads most certainly are!

    7. The article states, “I cannot think of any scenarios where I would advise businesses to advertise on Yelp at these rates.”

    I can think of a very good reason … branding. As a business owner I want my business to be the most noticed in my category and location. I don’t want my competitors to be. I understand as a business owner that many businesses also want to be at the top of Yelp categories, so I am willing to pay a premium for my business to be there instead of theirs.

    8. The article states, “For online advertising, I strongly recommend against commitments and impression-based advertising.”

    Actually, many businesses desire to effectively reach their targeted potential customers and that Facebook and Google are not always the best way to do this. Really, should all online advertising be cost per click? Advertisers, such as WebProNews or Yelp value their audiences and have limited space in which to allow businesses to also reach their valued audiences. Those targeted audiences are worth way more than 60 cents per thousand impressions or a few cents a click. For a sponsor to lock up ad space for them to reach their potential customers and potentially keep their competitors out of that space requires a “commitment” with the publisher and is worth paying a premium CPM. Just ask the advertisers on Yelp, WebProNews or even VentureBeat.

    The article mentioned Super Bowl advertising earlier… exactly how many people clicked those CPM ads?

    >> Discuss the article with Rich Ord and other commentors in the comments section….

  • Yelp Users Are Easy To Spot

    Yelp Users Are Easy To Spot

    Yelp is an easy way to check in and review restaurants and other establishments in cities across the U.S.

    Its users, or are they yelpers, are the reason the service is so popular. It allows users to compare reviews for different places from similar minded yelpers. It’s not all that unique anymore with Facebook check-in and Foursquare offering similar services, but Yelp does have its diehards.

    A new infographic helps us, the non-user or casual yelp user, spot the diehards among us. The yelp user who must review every restaurant they go to. The yelp user who must catalog every gas station in a 100 mile radius. To hardcore yelp users, we salute you:

    yelpusers

  • Groupon To Enter Yelp Territory?

    It appears that Groupon may be looking to get more into Yelp’s territory if unconfirmed rumors turn out to be true.

    TechCrunch’s Jason Kincaid says he has heard from unnamed sources that the company is in talks to acquire Clever Sense, which makes the app Alfred, which is a Yelp-like recommendation product.

    Alfred uses what the company calls zero-query search. “I’ve got personalized, relevant recommendations for you from the start. Not sure whether you want ramen or ravioli? I can show you a stream of recommendations right when you open up the app, so you can consider all your options,” the company says on its site (presumably using the voice of Alfred).

    A few months back, Alfred got a group recommendation feature, where users can tell the app who they’re dining with.

    Alfred is available on Android and iOS. In fact, the Android version just came out this week.

    It would certainly make sense for Groupon to offer a recommendation app and that offer deals when relevant.

    Neither company is commenting on the rumored talks. No surprise there.

  • Yelp IPO Filed For 2012

    Yelp has filed for its initial public offering. Reports have had it valued between $1.5 billion and $2 billion.

    The company outlines its growth strategy in the SEC filing:

    We intend to grow our platform and our business by focusing on the following key growth strategies:

    Growth in Existing Markets. Within existing markets, we will seek to increase the number of reviews, attract more users, increase usage of current users and attract more businesses.

    Expand to New Geographic Markets. We are active in the United States, Canada and Europe, and we see a significant opportunity to continue expanding our footprint in new markets, both domestically and abroad. While we have not yet begun to sell advertising in our international markets, we intend to begin hiring an international sales force in 2012.

    Platform Expansion. We plan to continue to innovate and introduce new products for our website and mobile app and to introduce our content and solutions on new platforms and distribution channels, such as automobile navigation systems, web-enabled televisions and voice-enabled mobile devices.

    Enhance Monetization. We intend to grow our sales force and expand our portfolio of revenue-generating products in order to reach more businesses and increase the amount they spend on our advertising products.

    “In the first nine months of 2011, we generated $58.4 million in net revenue, representing 80% growth over the first nine months of 2010,” the filing also states. “In this same period, we generated a net loss of $7.6 million and an adjusted EBITDA loss of $1.1 million.”

    You can view the whole document here. For an IPO date, it only has 2012.

  • Google Antitrust Hearing Takes Place Today

    Google’s big antitrust hearing with the Senate Committee on the Judiciary Subcommittee on Antitrust is today at 2:00PM. The witness list includes: Google Executive Chairman Eric Schmidt, Nextag CEO Jeff Katz, Yelp CEO Jeremy Stoppelman, Covington & Burling LLP partner Thomas Barnett and Wilson Sonsini Goodrich & Rosati, PC partner Susan A. Creighton.

    Stoppelman shared his testimony on the Yelp blog today:

    Yelp Testimony

    Google has a post here with “responses to senate hearing witness claims”. Here are the responses to claims from Stoppelman:

    1. CLAIM: “Google is no longer in the business of sending people to the best sources of information on the web. It now hopes to be a destination site itself for one vertical market after another, including news, shopping, travel, and now, local business reviews. It would be one thing if these efforts were conducted on a level playing field, but the reality is they are not.”



    RESPONSE: Sometimes the best, most useful answer to a query is one of the traditional “ten blue links.” But sometimes it’s a news article, sports score, stock quote, flight times, video, shopping results, or a map — any of which we may place above or among the other results from across the web. Every search engine has shifted toward providing more answers directly in the search results — because it’s what consumers want.


    2. CLAIM: “We again asked that Google cease its practice of co-opting content from Yelp for its own benefit. Google responded by removing Yelp links from portions of Google’s web search product, providing a new twist on the same old false choice: if we chose not to help power Google Local, we could not appear in the “merged” portions of Google’s web search results. To date, consumers cannot find links to Yelp in Google’s merged results, belying Google’s public pronouncements that “the competition is just one click away.”



    RESPONSE: Yelp’s website continues to appear in organic web search results like any other site we index (for example, on relevant searches such as “restaurants” and “review site”). However, to meet Yelp’s demand not to use the content we crawl from Yelp for any of our local search services, their website no longer appears on results from precisely those local search services, including when those local results are on the google.com search results page. 


    3. CLAIM: “Is a consumer (or a small business, for that matter) well served when Google artificially promotes its own properties regardless of merit? This has nothing to do with helping consumers get to the best information; it has everything to do with generating more revenue.”



    RESPONSE: In fact, most of the click traffic (roughly two-thirds of clicks) from our local search result pages goes directly to small business websites, and review sites make up the next largest percentage (about a quarter of clicks). Less than 10% of clicks from our local results page go to Google Place Pages.


    4. CLAIM: “Today represents a rare opportunity for the government to protect innovation.”



    RESPONSE: Unfortunately, what Yelp and other sites are proposing is that the government intervene in one company’s product design — specifically by regulating search results. While competitors may like that, ultimately we believe that regulation of search results will make make search engines less useful for consumers.

    FairSearch sent us an email with findings from a FairSearch-sponsored survey about Americans and the FTC’s antitrust investigation of Google. The main findings, as presented by the organization are:

    • Most Americans support the FTC investigation of Google.
    • The majority of Americans are troubled by Google’s dominance of the online marketplace, both in the abstract and when Google is named.
    • Majorities find Google’s business practices unfair.
    • Over six in ten (63%) say it is unfair for Google to use the profits it makes from its dominant position in search advertising to buy smaller, innovative companies at an early stage, preventing them from becoming competitors.
    • Eight in ten (79%) Americans favor the FTC’s investigation of the company for restricting fair competition and misleading consumers. Half (49%) say they strongly favor the FTC’s actions.
    • Over eight in ten (84%) say it is unfair for Google to take content from other websites and present it as its own, depriving these other websites of potential consumer traffic.
    • Three-quarters (74%) say it is unfair for Google to raise prices for advertising without notice and to favor large e-commerce companies over small local businesses.
    • Over six in ten (64%) believe a single company that controls 79% of the market for a good or service should be subject to existing antitrust laws. Only a quarter (23%) say such a company should not be subject to these laws and 13% are not sure.
    • Almost six in ten (57%) feel that Google’s control of 79% of the search advertising market is bad for consumers. Only a third (33%) consider this a good thing for consumers.
    • Two thirds (65%) believe Google’s control of the mobile search market is bad for consumers.

    Do you think Google is anti-competitive? Let us know in the comments.

  • Why Zagat Might Be a Smarter Purchase for Google Than Yelp

    By now you’ve heard the news that Google has purchased Zagat Reviews. For those of you who aren’t familiar with Zagat, it has a worldwide set of reviews that travelers have relied on for decades to choose the right restaurant.  Google famously flamed out in its bid to buy Yelp in 2009, and has finally added the restaurant reviews it has craved. Not everyone thinks that Zagat was a worthy relacement for Yelp. One wag was quoted in TechCrunch as saying, “If you were losing to Wikipedia would your next move be to buy Encyclopedia Britannica?“

    As big a fan as I am of the snarky comment, however, this one doesn’t ring true for me.  I totally understand how Yelp reviews are very important and I see why Google went after them first, but I am left wondering whether Google ended up far better off than people think, perhaps even better off than if they had bought Yelp.

    First, regardless of whether they bought Yelp or Zagat, Google has desperately wanted to have its own reviews to add to its local offerings and now they have them. What’s more, I believe that Zagat reviews have a better brand image than Yelp’s. Whatever advantage Yelp might have had in cachet over Zagat was that Zagat might have seemed old school, but now that Google owns them, you can bet they can overcome any dowdy image that might have dogged them. How long before you see a Zagat app on Android that allows you not only to search for restaurants but to be one of the raters yourself?

    Then, there is the question of the price. That same TechCrunch article linked above pegs the price at somewhere below $66 million, because there is no government review needed for acquisitions under that price. Contrast that to the half-billion dollars reportedly rejected by Yelp. Even if you print money the way Google does, having an extra $400+ million to spend on other things can’t hurt. They could buy six more content companies the size of Zagat, for example and still have some change left over.

    But people who criticize this deal are missing something else. Zagat is not like Encyclopedia Britannica, because Zagat reviews are not written by one person based on one opinion. Zagat’s has a system that uses hundreds of thousands of surveys to combine for their restaurant ratings. Their system is full of fact checkers and other checks and balances to make sure that the reviews are accurate.

    Now, think about that. Suppose you take that systematic process that Zagat has painstakingly worked out over the years and you hand it to Google. Google could very easily start with Zagat reviews and then add a social media ratings and review component that allows Zagat’s to scale their reviews way higher than they do now. And fact checking of reviews is woefully missing from ratings systems today and sorely needed. Even simple things like, “Is the restaurant still open?” or “Is that phone number still accurate?” would be a major improvement to Google’s local offerings, because Google just doesn’t keep data up to date today.

    So, stay with me here. On top of what Google bought that everyone knows they bought–Zagat’s restaurant ratings–is it possible that Zagat’s system of collecting and curating ratings could be applied to other businesses, too? All of these rating systems have developed the Yelp way, aggregating many ratings of unknown quality. Google, for all of its love of technology, was the first one to implement a search ranking system based on links, allowing the human element to affect search quality–permanently for the better. It wouldn’t shock me if Google wanted to use humans in a scalable process that improved ratings quality.

    But even if this deal is about nothing more than buying a set of restaurant ratings, it is still a very good deal for Google. Expect to see these ratings incorporated into Google forthwith, which is a major improvement for all restaurant searches.

    Check out Biznology for more articles by Mike Moran