This is how an article by Lisa Barone on outspokenmedia.com begins. Obviously, this article is written by one of those positively affected customers of Yelp. Why did I say that? Let’s see after we get to know about Yelp.
Yelp.com operated by Yelp, Inc is a local directory service with social networking and user reviews (Spot on! Wikipedia it is). It was started in October 2004 in San Francisco, California. It generates revenue through local business and brand advertising. Yelp grows by getting users to write reviews of businesses and also by engaging them through social networking features. The type of business varies from restaurants, shopping, beauty parlors, automotive, doctors and other home services.
Yelp offers a platform for both consumers and businesses to find each other especially through reviews and ratings. A typical search on Yelp displays the best match of the keywords (if found), brand advertisements on top, sponsored local advertisements related to the search keywords, other local businesses related to the search etc. The sponsored listing (paid advertisements) get to select a review of their choice to be displayed as a teaser along with the listing. Otherwise, all listings display the overall rating along with the name of the business. When a particular business listing is selected, it displays the details like location, website of the business, photos (if any) and all the reviews that it has got.
The following is the link to a small presentation that showcases the position of brand and sponsored local advertisements, the percentage of reviews from each type of business constituting the total number of reviews on Yelp, its revenue breakdown as based on a study in 2011 and the consumer traffic statistics as updated and presented by SiteAnalytics.com. The data charts are retrieved from an article on Business Insider.
Though business ratings and reviews are the primary features that people look for at Yelp, it also features daily Yelp deals – something similar to Group-on deals created by business owners, event listings – events happening in the locality with event dates, and also social networking options for Yelp users – rather known as Yelpers!
You cannot post a review or follow a reviewer on Yelp until you sign up as one of their users. Creating a user profile with Yelp is free and it gives you the option of connecting with other yelpers, follow their posts, show your interests for listed events and also chat in online forums. Yelp uses Facebook to find your friends as soon as you sign up. Yelp also utilizes google maps to overlap their local business locations and display to the user along with the business listings.
So far, so good! Yelp has helped the consumers find what they want with user reviews and ratings. It has helped businesses attract customers through their online presence, paid advertisements, offers and deals. Yelp also encourages the businesses to recommend other local businesses for linked advantages. Say for example, a florist or a gift shop in downtown NYC recommends or lists the bakeries, party halls and restaurants in the same area; a user who wants to browse for all these businesses to organize an event in that area is benefited on the whole. The businesses can help each other attract traffic too.
A business owner who set up an account with Yelp will be able to monitor consumer traffic, statistics, respond to positive and negative reviews and in short, speculate if the business is on the right path or not.
Now that I have talked about all this, let’s revisit what I said in the beginning of this post – one of the positively affected customer. I said that because there is another side of reviews and criticisms that is revolving around Yelp. Yelp claims to offer unbiased reviews to consumers and that it is Yelp’s specialty that other review sites are not offering. To achieve this, Yelp uses something called the ‘review filter’ that automatically filters out spurious and suspicious reviews. To understand better, please watch the following video that explains this technique.
Yelp has its official blog linked to Yelp.com too where it has a few posts explaining how and why Yelp uses this technique. It also mentions that the algorithm is continuously modified and improved to make it more fair and effective. Nevertheless, complaints and lawsuits keep increasing in this regard.
Especially, many small business owners complain that this is an extorting technique that Yelp utilizes. If more and more good reviews keep adding to a particular business, Yelp sales people start contacting the business owners to opt for paid advertising. The business owners report that the sales people even offer to remove the bad reviews from their listing if they accept this offer. Unfortunately, if they refuse the offer, it is reported that the good reviews are removed from the site leaving behind only the damaging ones and the rating of the business is also affected only by the visible reviews. Sounds unfair, doesn’t it?
There also exists a Facebook page called We Hate Yelp formed by individuals and business owners who feel betrayed by Yelp’s review filter and who think Yelp is biased and extortive. If Yelp claims to benefit local businesses and the consumers alike with unbiased and truthful reviews, why hasn’t it improved the review filter over all these years? Does this project the flippant attitude from Yelp’s side? May be! Because the complaints are on a steady rise and more customers and business owners are starting to move away from Yelp. There are so many lawsuits filed claiming defamation and extortion. The following links are examples of some of the articles published in this regard.
What’s more intimidating is that after all this confusion, if users still want to voice their reviews on this site, they are apparently risking a lawsuit too. To Yelp or Not To Yelp? explains the latest of this kind!
Considering all this, what do you think Yelp is to consumers and businesses? A boon or a bane?