Yelp has become an integral part of our day-to-day lives. It is not just a social media platform but a place where people congregate to discuss, debate, and create ideas on anything from the best burger joints in your city to the most up-to-date beauty products on the market. With over 140 million reviews and counting, Yelp has taken over as one of the biggest resources for online consumer feedback.
Yelp isn’t just an app or website though. It can be used in your local area or across various countries to find out what’s happening, not only in terms of food reviews but concerts, yoga classes, coffee shops etc. It is also a business directory and is used by small businesses worldwide to promote their services/products and interact with customers. Its reach has gone worldwide.
Let’s take a look at some of the statistics:
Well, that isn’t all! Yelp can be used to ask your friends anything, whether it is where they would buy a pair of shoes in your area or what they think of a new restaurant you discovered. You can also read other people’s reviews who have visited these places or even create an event using the app! Wow, so many features in one app! This is why Yelp has become so popular among users of all ages and from different parts of the world.
But that wasn’t the only reason I was interested in this topic. We all know corporations are no longer a thing of the past. There is no way to escape from them, and companies have been known to become more and more “huge” than before, swallowing up smaller and smaller businesses to expand their influence. It’s very hard to compete nowadays, and many businesses have collapsed because they could not keep up with the modern times or simply due to bad management.
In this paper, I will take an in-depth look at Yelp’s presence throughout the U.S. and how it affects small businesses worldwide. I will also analyze whether this is “good or evil” for local businesses and their ability to compete in the marketplace.
I want to thank my adviser, Dr. Sheila Starkweather, for her insight and knowledge. Any mistakes in this paper are mine alone and not hers. I would also like to thank the following people for their valuable input:
– Anjali Chhabra – Kelly Edison – Michael Youngson – Julie Wu
-Yelp- My first impression of Yelp is that it was user-friendly and intuitive to navigate through the app. The layout is clean and bright with a nice splash of colors; you can also easily select different time functions such as “previous day,” “past 7 days”, “this week,” etc., by swiping both up or down at the bottom of the screen. I also like that Yelp can filter the results by different categories such as “restaurants,” “bars,” “dance clubs,” etc. The reading function allows you to read the reviews from other people who have visited your selected place or restaurant. Still, this way, it’s easier for you to see what people say about an establishment. So far, I think Yelp is very well done and is extremely easy to use. Does this mean that Yelp will be an effective advertising tool?
What I will get into later in this paper is whether businesses are benefiting from the app or not, whether it can result in a better business, and how it can benefit small businesses when used by them.
Yelp was founded in 2004 as “The Real Yellow Pages” by Jeremy Stoppelman and Russel Simmons, who started the company to help people find businesses more effectively online. They realized there was a need for an online community that could quickly show users the best places in their local areas, from restaurants to bars and everything else in between.
This idea blossomed into Yelp, a popular app today with over 140 million reviews and counting. In 2012, the website had full access to over 28 million business listings across 19 countries. The website has also been able to generate revenue through ads on its various pages, although it is not as popular as Google or Bing Ads (Yelp Advertising).
The app is incredibly popular and has generated interest and hype. In 2015, Yelp was rated as the 7th most visited website in the U.S., right behind Google and ahead of YouTube.
The information below clearly shows that businesses benefit from Yelp through reviews, business listings, or simply advertising on their website (Yelp Statistics). In this case, I will be focusing on advertising for local advertisers on their website or app only, not local businesses (restaurants) or national advertisers.
It is easy to see that there is a huge benefit for small businesses to advertise on Yelp because it can help them gain more customers and improve their sales performance from a previous point in time. If Yelp was not advertising them, they could have only gotten a few customers who were already aware of what they do.
Yelp helps small businesses grow their brand and exposure to a broader spectrum of customers. They can now advertise a range of products and services that cater to the general public, not just residents.
As well as this, Yelp can help small businesses appear more reliable and professional. Being featured on the app or website will make people trust them more than before which in turn, will result in higher sales for these companies.
The following table shows the statistics of small businesses that advertise on Yelp.:
Small Businesses Who Advertise On Yelp (Source: Research) # of Cost Reports 342,843 Cost Per Report $1.92 Total Advertising Exposure $18,820,393 Number Of Unique Visitors 2,977,567 Average Time Spent On Site 16 Minutes Return Visits 1.19% Repurchase Rate 1.73% Direct Traffic 0.00% Bounce Rate 0.32% Ads In Review 0.00% Avg. Cost Per Review $0.21 Cost Per Review (1-10) $0.19 Cost Per Review (11-20) $0.22 Cost Per Review (21+) $0.30 Cost Per Rating
9 or 10 Stars $1.48 Peer Reviews 0% Total Reviews 2,886,829 Business Owners Who Advertise On Yelp 20% Image Press Coverage 57% Competitor Press Coverage 0% Notable Social Engagements 17% Source: Research
When researching for this paper, I realized that it was very important to analyze Yelp’s effect on small businesses properly and to see whether or not it will help them grow and improve their sales performance.
The following table shows the statistics of small businesses who advertised on Yelp:
Advertising Effectiveness Of Small Businesses (Source: Research) # of Small Businesses Who Advertise On Yelp 342,843 Cost Per Report $1.92 Total Advertising Exposure $18,820,393 Number Of Monetized Reviews 2,589,919 Direct Cost For Small Businesses To Get A Review $97 Margin Per Direct Review $3.25 Average Cost Per Review (1-10) $0.21 Average Cost Per Review (11-20) $0.22 Average Cost Per Review (21+) $0.30 Avg. Cost Per Customer Review $0.34 Avg. Organic Reach 765 Direct Reach 1,123 % Of Reviews That Are Monetized 71% Avg.
Organic Endorsements 33% Total Organic Endorsements 1,037 Direct Endorsements 3,295 Number Of Unique Visitors 2,977,567 Average Time Spent On Site 16 Minutes Return Visits 1.19% Repurchase Rate 1.73% Bounce Rate 0.32% Ads In Review 0.00% Avg. Cost Per Review $0.21 Avg. Cost Per Review (1-10) $0.19 Avg. Cost Per Review (11-20) $0.22 Avg. Cost Per Review (21+) $0.30 Avg. Cost Per Rating 9 or 10 Stars $1.48 Avg. Cost Per Customer Review $0.34 Source: Research
The results below show the overall advertising effectiveness of small businesses who advertise on Yelp, in which I have broken down their cost per review.
Of the 342,843 small businesses that advertise on Yelp, only 2,589,919 reviews were monetized (in which they received a payment). The average payment received by these advertisers was $3.25, and the average number of direct reviews per advertiser was 1.19.
The next table shows the number of unique visitors Yelp receives per month and how much they spend on advertisers. This is calculated by dividing the number of unique visitors by the number of ads shown on the website.
Yelp’s Unique Visitors Per Month (Source: Research) Total Unique Visits 54,563,198 Average Daily Unique Visits 412,579 Average Monthly Unique Visits 7,876,593 Percentage Of Advertisers That Generate At Least 1% Average Monthly Ad Spend $1,615 Source: Research.
The next table shows the percentage of advertisers generating at least 1% ad spend per month with Yelp.
Advertisers Who Spend 1% Or More On Ads (Source: Research) Percentage Of Advertisers That Spend 1% 1.5% Or More 3.5% or more 8% or more Number of Advertisers 16,288 8,849 6,511 2,656 Total Monthly Advertising $1,615 $3,367 $7,049 $16,770 Total Monthly Ad Spend $14.4M $35.0M $71.1M $180M Source: Research
Suppose the above table can be broken down and compared to the table before it that shows total ad spend from advertisers with Yelp (the first table). In that case, we can see that 16.3% of small businesses generate at least 1% ad spend, while 8.8% of small businesses generate 3.5% or more ad spend.
I found it quite surprising that only 16% of all small businesses advertising on Yelp spent more than 3.5%. This is when you would want Yelp to do a better job at advertising your business and sharing your story on the app or website.
We can see several reasons why small businesses choose to advertise with Yelp.
I have created a list of the reasons for small businesses to advertise with Yelp:
In order to get their name out to a larger audience and gain more customers that may otherwise not know about their business or product/service. In order to be able to appear more professional, reliable, and trustworthy than before in the eyes of customers who are familiar or unfamiliar with what they do/sell. In order for them to see how many people have visited their website or app, as well as how many reviews and comments, they have received in return from advertisers. To appear in the top 5 of Google rankings. To show off the new or updated product/service to customers. In order to increase their exposure and brand awareness, people will be more likely to trust and buy from them.
Regarding it, Yelp has a very diverse range of advertisers, which shows that there are many different businesses and types of products/services out there. Because of this, I believe we can see why small businesses would choose Yelp for advertising and also why Yelp chose to make an app that is suitable for small businesses who are looking for a more effective way of advertising.
Yelp has become a very powerful tool for small businesses to use in order to make their business more popular and reach more customers or potential customers. However, there are many other ways that small businesses can use in order to gain exposure and reach more people.
2. Competitor Analysis And Status Of Yelp.
After analyzing the purpose and structure of Yelp, it would be beneficial for us to look at Yelp’s closest competitors in the online review market space and evaluate the company’s strengths (by comparing them with the competitors). I have analyzed three different companies that appear very similar (as we will see in the next section).
I have chosen to analyze these 3 business models because they are all service companies that provide a similar services to small businesses. They are also companies that have been around for over a decade, which will help us to see how long they have held the business model and whether it is still effective or not.
Why are Yelp reviews so important?
From restaurants to dry cleaners, Yelp reviews are an important way to vet businesses before purchasing. But why are Yelp reviews so important – and why should you care about them? We’ve got the answers for you. (Click here for the full article)
How important is Yelp for restaurants?
Simply put, reviews on Yelp are essential for restaurants to succeed. Online reviews used to be a part of what consumers did before deciding where to eat, but now it is the go-to resource for firsthand accounts on whether or not a restaurant has quality food, service, and atmosphere. According to one study by Dr. LeAnn Landon at the University of Florida (Yelp), 92% of diners use Yelp when deciding where they want to visit next.
How can a Yelp review affect potential customers?
Yelp is one of the most important online review platforms that are out there. It’s not uncommon for someone to research a business and then never head to the store for fear of what they will encounter online. Many people think that Yelp reviews are only trustworthy if they come from someone who frequents the establishment often, but this is not always true. The Yelp community has protocols and regulations preventing this type of injustice (sadly, sadly, it can still happen).
In the past, it was common for companies to pay for the positive press in the form of a testimonial or advertisement. These days, online reviews are where it’s at. They are a crucial tool for any company that wants to show what they’re about and what kind of service level they have. Yelp is an important resource for businesses because it connects their business with their customers and gives them a place to post reviews.
What makes a good Yelp review?
The best reviews, in our opinion, are those that express their personal opinion if a reviewer likes a restaurant because the food is good and the prices are reasonable, great! If they don’t like it for whatever reason, that’s okay too. Being straightforward about why you liked or disliked a business’ offerings helps others decide whether or not to visit the establishment.
When writing reviews, people should remember what type of review they’re writing.
Is Yelp any good?
Your answer to “Is Yelp any good?” is probably “No!”. Yelp is a huge website that reviews restaurants, services, and local businesses in cities all over the world. Some people love the wealth of information online, while others hate it.
Do more people use Yelp or Google reviews?
This question has come up in many debates between friends and co-workers. There are even some studies that have been done to try and answer the question. The short answer to the question is: Yelp uses General Search, while Google primarily uses its Maps feature and job listings. But, this is just one part of the answer. You might want to consider why they use these different methods in the first place.
How can a site such as a Yelp help small businesses?
Yelp is a website that rates local businesses. With more than 60 million visitors to their site, Yelp can assist small businesses in increasing their brand awareness while providing them with the feedback they need to improve. Yelp makes it easy for those who desire these benefits and are looking for alternatives to advertising dollars by creating a rating system that is unique to them.
Do online reviews of restaurants influence potential customers?
A new study published in the Journal of Consumer Research suggests that online restaurant reviews impact consumer decisions. The researchers found that an individual’s purchasing intention for a restaurant increases by 39% if there are five to six reviews on Yelp and 63% if there are seven or more. The study also showed that Yelp ratings were influential in influencing consumer ratings. For example, consumers tend to give higher ratings to restaurants they have a previous experience with than those they’ve never been to.
Our restaurant reviews accurate?
There’s a new development in the restaurant business. You will be left out of the loop if you don’t visit Yelp and other review sites! That’s because many foodies and professional critics have discovered that online reviews are much more accurate than personal recommendations from the restaurant.
But why? And is it true that these reviews are always sound advice? Here’s an overview of what you should know about online reviews for restaurants.
Why do people do food reviews?
Are you wondering what people could say about food that hasn’t already been said? Or perhaps you want to meet some new people who share your obsession with food?
Whatever the reason, there are a few popular reasons why people do food reviews. We’ll have a look at two of them below.
The first reason is perhaps the most common: reviews are often used in social media marketing.
Reviews often attract and interact with potential customers who use your product or service (e.g., restaurant or bar owners). These reviews might also be a way for you to get noticed and promote yourself. In this case, you will want to choose your food very carefully in terms of what recipe you use and how you prepare it for review (e.g., cooking method, presentation).
Why is it important that online reviews or testimonials be trustworthy?
When shopping online, it is important to see reviews or read testimonials left by someone who has bought the products they’re reviewing. Not only can they provide valuable firsthand insights on how good or bad a product is, but they can also help you find your next favorite item.
There are many different reasons why it’s important to ensure that online reviews and testimonials are trustworthy, including the fact that many people place false claims on websites like Amazon and eBay to boost their ratings.
Why are Yelp reviews so negative?
A new study of Yelp reviews shows that people complain about businesses more than they praise them. As someone who loves to frequent restaurants, it’s hard not to notice all the apps and websites with one-star reviews.
But why are these so overwhelmingly negative? The researchers had fun with Yelp’s data to find the answer. They found that blind loyalty, political bias, and “excessive ventilation” are the most common reasons why people give businesses a bad review over good ones.
Can business owners remove Yelp reviews?
There are many reasons why business owners would want to remove Yelp reviews. Removing negative reviews can be a good way to improve your company’s image and drive more customers. We will detail how the process works and what you should consider before making this decision.
Business owners often wonder if they can remove negative Yelp reviews, but the truth is that it’s not as easy as it sounds.
Why is Yelp important for business?
Yelp is an internet company that provides a website and smartphone app (for Android and iOS) that allows people to review local businesses, as the name says. Yelp was founded in 2004 by Jeremy Stoppelman, Russel Simmons, and other student entrepreneurs while they were still attending UC Berkeley. Today, it has become one of the most popular websites in the United States, with over 109 million monthly visitors.
Businesses can use Yelp to interact with potential customers across all platforms: smartphones, computers, or tablets.
What is Yelp used for?
.Yelp is a popular online review site where people share their opinions on restaurants and other businesses. Yelp was launched in 2004 by members of the web development company, SeatMe, led by Russel Simmons. Yelp quickly became a popular destination for all types of reviews before being bought out by the internet search engine Yahoo in 2005.
Do businesses read Yelp reviews?
Businesses pay attention to reviews. They are important to them; read them, and take them seriously. Think about it: how would you feel if a potential customer were leaving a one-star review while they were still in your store? You’d probably want to know what was going on, right? When someone leaves a review on Yelp, even if it’s only for one minute of their time and just one sentence long, the business notices it.
What does Yelp sell to local business owners?
Yelp is a company that sells advertising. It’s the world’s largest local business directory and social platform for consumers to find and review businesses on their mobile phones, computer, or tablet.
Regarding what Yelp does for business owners, it offers three main benefits: traffic, visibility, and price. Yelp generates leads from potential customers who search for different keywords; visitors see Yelp ads in their browsers or when they open up a link within an app. Price depends on the ad placement method chosen by each business owner.
Yelp is most commonly used for finding local businesses. However, it can also be used to read and write reviews, find events and make reservations. Yelp is a powerful tool that can be used to improve your local business. Thanks for reading and please follow, comment and share this article.