A Candid Yelp Advertising Review – Is Yelp Ripping People Off?

Maybe you know and maybe you don’t… but Yelp (a local search and reviews online service) offers paid advertising for businesses called the “Yelp Sponsorship Program“.

Yelp

To sum it up, according to the page advertising this opportunity, this Yelp Sponsorship program allows you to:

  1. Put up a slideshow of the images of your business.
  2. Highlight a user’s review that you like the most (as the business owner)
  3. Promote your business as a sponsored search result and on your competitors’ business pages. Target potential clients while they are making decisions about where to spend their money on a business like yours

It sounds all fancy spansy right?  Sounds like you get even MORE control over your business listing which will help “put your best foot forward” and sneak attack your competitors, stealing all their would be clients.

But Stop the Music, Do These Yelp Advertising Features Actually Accomplish Anything?  Or are They Just Fluff Designed to Lure You in so They can Zap You?

Suck Them in & Then ZAP Them!

Before we proceed, I’d like to first state that my experience and knowledge of this Yelp Sponsorship program comes from dealing with them on behalf of one of my clients.  This client signed up with Yelp (despite my warnings – apparently Yelp’s salesman are SMOOOTH) and I got to learn all about this program.

Having said that, that’s only ONE experience which doesn’t make me an expert but it certainly makes me more knowledgeable of this Yelp marketing program than those who’s never experienced it.

Furthermore, in case you are not familiar with how Yelp works, anybody can post a business on Yelp, as long as it falls under one of their categories and is a “fit” per their policies.  And the rightful owner can claim that Yelp page by jumping through some hoops and voila, you have a FREE listing about your business.

FREE Yelp Reviews Page

FREE Yelp Reviews Page

And for comparison’s sake, here’s an example of a PAID Yelp review page:

PAID Yelp Review Page

PAID Yelp Review Page

With that said… let’s examine feature #1.

The “Slide-Show”

Now, granted the larger images and the “slideshow” adds a bit more snazziness to the page but honestly, how big of a difference does it really make?  If you wanted to see pictures, wouldn’t you be inclined to go visit the business’ actual website?

I’d love to see some split test on this…

Favorite Review

As far as feature #2, I suppose this is a good thing, like Yelp for Business Owners says, “put your best foot forward”.  But then they go and shoot themselves in the foot by posting the “Rating Distribution” graph next to it.  This graph, as you can see, shows all the reviews, INCLUDING the negative ones.

As humans, we are so inclined to ask “what’s wrong” that I reckon most wouldn’t take the “favorite reviews” at face value; they’d go and seek the worst reviews to find out why those folks gave bad reviews.

Yelp’s Business Owner’s Sponsorship Program feature #3 is my favorite.

Yelp Advertising… on Others’ Pages

So the idea here is similar to Google AdWords, when someone searches for a term related to your business, your listing shows up (as, “Sponsored Result”) with the hopes that your business gets clicked on.

Here’s the caveat though, Yelp is charging you per impression basis instead of per click basis.  What this means is that whenever your listing shows up in this manner, it counts against your total allotted amount that you paid of (so you are paying “cost per impression”).  If it were click based (cost per click) you would get charged ONLY if your ad gets clicked.

This brings into a few questions, the least of which are:

  • So how much is it per impression?
  • How many impressions can you expect to get (this is of course dependent on the search volume) – bear in mind that this is a LOCAL search and review online system. Which means that you are really throttling the number of impressions your ads will show up because the number of LOCAL folks doing searches related to you business within your area is a tiny tiny fraction of the searches done nationally combined.
  • Are you able to test different the keywords with which your listing shows up (which is costing you money)?
  • Are you able to TRACK the results you are getting on fine details?  I.e. what keywords are converting, when is the best time to show your Yelp sponsored listing, etc.  Basically, questions that any savvy AdWords expert would ask.
  • How much control do you have over this campaign?  After all, you ARE paying for it.

Before I Go On, Let’s Talk About Leakage

What is “leakage“?  Well, in digital marketing term, it means actions taken by your website visitor that doesn’t contribute to your ultimate goal (such as capturing the lead, making the sale, etc.)  This often includes having active links which serve as distractions that take the visitor ELSEWHERE.

Now… take a good look at just about any Yelp review page, do you see leakage? Do you see links everywhere?  But more importantly (and relevantly from a marketing perspective), do you see the box that says, “People Who Viewed This Also Viewed…”?  Do you see how these links tend to be links to direct competition to the business review page you are viewing?

Yelp.com Pay Per Impression is a Friggin’ Joke (& Rip Off You Can Argue)

Okay, so going back to the sample list of questions listed earlier on.  Let’s dig deeper and find out exactly what sort of program Yelp is running (and charging you for).

First of all, here’s the cost for Yelp’s advertising program:

$300/mo – promotes you to 1,500 people in your area looking for a business like yours.
$500/mo – promotes you to 4,000 people in your area looking for a business like yours.
$1000/mo – promotes you to 10,000 people in your area looking for a business like yours.

Blind Mouse TOY

So you are looking at $100 CPM (cost per thousand impressions) to $200 CPM to advertise on their network. In the AdWords world, this is ridiculously high for paying CPM unless you are in some highly competitive and profitable business like real estate and 401k portfolios (oh wait… given the crash of the economy, DOH!).  Even then you are pushing it a bit.  Folks who are paying high CPM on the pay per click networks have thoroughly tested their campaigns, have tracked EVERY single detail, and have all the control in the world.

But on Yelp?  Hellllll no!  You don’t know what your “campaign” looks like let alone have any control over it.  You are like a blind mouse and they are the big bad kitty toying with you.  And yet, they are still charging you an arm and a leg.  And one quick look around Yelp will tell you that most businesses are NOT high-price markets, they are mostly smaller markets like restaurants.

This brings me to my second point of frustration when dealing with these Yelp folks, where’s the proof of these impressions people paid for???  Where are my listings showing up?  And what’s the conversion rate??  Again, they tell you nothing and keep you blind.

YUCK.

Sales Team Who Doesn’t Know Jack and Preys on Toy Mice

Okay, so I had the opportunity to speak to a Yelp representative on the phone on my client’s behalf.  Armed with my knowledge of AdWords, marketing, the works… I came prepared.  Sadly for the person on the other line, that’s more than I can say for her.

I asked about all the things I mentioned before (about click through rates versus impressions, how I can track my campaign, how much control I have, etc.) and she was STUMPED.  She couldn’t understand why we would care about such matters.  As a matter of fact, I’d venture so far as to say she didn’t know JACK about marketing, and yet, she’s representing a team that’s suppose to help us market.

But what REALLY got to me was when I asked her about a 24 hour backout clause, which means that within 24 hours of the start of the campaign, if I am not satisfied with the results I am seeing, I can cancel.  Nope she said… and the reason is because it takes time for the program to ramp up for me to really start seeing results.

EHHH?  It’s the internet we are talking about here right?  I can track clicks fairly easily right?  Hmmm… okay.

So then I went on and asked what is the minimum sign up period, to which she replied, “6 months”.

OMGWTFBBQ, 6 month minimum at $325 a month where you have NO IDEA what’s going on? Thanks but no thanks.

The Proof is in the Pudding – Proof that Yelp Sucked

Against my better judgment, my client went for it anyway, and looking at the chain oDon't Let Yelp Do This to Youf emails he received from Yelp along with how their program is setup, I can sympathize why.

See, Yelp is banking on folks NOT knowing the difference between “impressions” and “clicks”.  They are banking on the fact that businesses will confuse “impressions” with “visitors” – as in, “For $300 a month I can get 1,500 NEW customers every month?  SWEET, sign me up!”  They are banking on folks not knowing how to track their progress and not caring to either.  They are banking on being able to just sweet talk their would be victim on the phone and dazzle them with fluff.

And worse yet, without the clients being able to track the campaign, Yelp is able to get folks to resign, again and again, by giving out meaningless stats.

To give you a perspective of just how much SUCKINESS is in this program, with the aid of Google Analytics and my idea of adding a page that leads people to a printable in-store coupon, we were able to see how the program performed.  Here are the stats, in 2 months time, Yelp drove 64 unique visitors to this special landing page (which again helps us track the comers from our Yelp advertising campaign) and of those 64 visitors, we got 9 customers that we can tell.

This meant 32/1,500 = 2% conversion from visitor to Yelp to the website and 0.3% from impression to actual customer.  Put it another way, my client paid $72.22 for each of those clients – clients who are just diners to his restaurant.

NOTE: We are not even sure if these visits and visitors are a direct result of my client PAYING for this Yelp advertising program, read below to see what I mean.

Ouch.

Look, You Don’t Need to Pay for Yelp, Nor Do You Want To

Don’t get me wrong, Yelp.com is awesome, I use it all the time to get the low down on new restaurants, find a plumber, etc.  But you don’t need to pay to use it!  Business owners can get free Yelp review pages and those rank (from a search engine optimization perspective) just as well as the paid for pages.

This means you’ll get traffic regardless!

Hope this was enlightening for you.  Like I said earlier on, I’ve had only one experience with Yelp and boy was it a horrible one.  I’d love to hear some success stories and some proof that it worked.

Until then, don’t pay Yelp a dime to join in on their “Yelp for Business Owners” program, especially if you are a restaurant owner.

Raymond Fong

If you are looking for real trackable result, I’d like to recommend you take a look at our gowth hacking agency. We help businesses (both startups and traditional businesses) gain more exposure, get more leads, obtain more customers, and ultimately add to their bottom line leveraging the internet.

deviatelabs-logo-black

P.S. You might be interested in this post I wrote as well, “Yelp Strikes Again…

451 thoughts on “A Candid Yelp Advertising Review – Is Yelp Ripping People Off?

  1. Donna

    Thank you for mentioning and clarifying the impressions vs clicks detail. Spent some time on the phone with a yelp rep today and she’s calling back in a couple days to give me the formal presentation. Such a high price tag. Besides a good SEO specialist, where do you recommend small business invest their advertising dollars and efforts?

    Reply
    1. Raymond Fong Post author

      I don’t know if spending money hiring a SEO specialist is necessarily the way to go for a local business such as yours. If you have proper listing setup on directories such as MapQuest, Google My Business, Google Maps, free Yelp listings, Foursquare, Facebook page, WhitePags, Yahoo, YelloPages, SuperPages, and Hotfrog, you should have fairly good coverage from a local SEO perspective. I’d give them a shot first. Just be sure the business name, phone number, and address all match exactly to each other and to your website.

      I’d give that a shot before hiring a SEO specialist.

      Reply
  2. Michael N

    I have been so fed up with yelp ads that I decided to google ‘yelp ads is garbage’ and this article popped up. Boy do I wish I would have read this article almost a year ago. Same Steve Pizzo suckered me in. I have 2 new clients from yelp ads and about 5k down the drain in a year. I just recently came to my senses and wanted to cancel but they wanted to hit me with 700 termination fee. Since I only had 2 months left I said what the heck and left it in hopes that I would receive at least 1 phone call. Well I did receive one..from. Home advisor representative trying to lure me in. Yelp ads is a scam.

    Reply
  3. DOUG ARMSTRONG

    My business received a cold call from con artist/ex car salesman turned Yelp superstar Steven Pizzo. I was planning to look into Yelp for advertising, so his timing couldn’t have been better. He sold me on the fact that all paid ads appear on top of all organic listings on Yelp. He even showed me examples of similar business like mine, and the ads seemed great. The second the contract was signed, this guy stopped answering calls and returning emails. Prior to the sale, his customer service was excellent. That should have been my first sign. No business owner should sign up with Yelp if they want to deal with a company with integrity. For 3 months they charged us for services but when you tired to find our name on Yelp, the LAST company which occupied the address would appear “permanently closed”. Our business name, profile, or pictures did not exist on Yelp for 3 months! We bought this to their attention and they agreed it was a mistake, but insisted that because they ran the ads on our business they were doing there job. So, they were running the ad but when you clicked on the ad it would take you to a business listing that was no longer in business. Never the less, I cancelled the service because I lost trust in Yelp. They continued to charge my card 3 months after the written request, and charged me a $700 termination fee. Fraudulent business practices is a norm for Yelp from my experience.

    Reply
  4. Melissa

    I am being given a really good sales pitch by the yelp representative. I was not even given any options too choose from just $2250 per month. I didnt ask about nor was told anything regarding the impressions. Just the per click price which was about $9.00 per but was not a locked in rate and was subject to change. The “Call to Action” button and tracking were discussed. I guess I am thankful that the price point was what it was. I would have paid $350. but i needed time to think about $2250. I told the rep that i needed to do a little more research and think it over so, i am so glad i did and found this Blog. There were some things that didn’t make sense but I thought maybe I was just being slow and didn’t understand how it worked. But after reading this I realize my questions were valid and you Mr. Fong have cleared things up and I think I have a better picture of the pros and cons. I am sure Yelp is good for some businesses but it isnt for everyone. Thanks for all the information.

    Reply
  5. Alex Donaghue

    Mr Frog,

    Great article. Guess what? I just got suckered into a second campaign with Yelp ads. Lest campaign it felt like I was working for Yelp. Every customer that I received from them that money went straight to Yelp. This second time I had a WAY better website set up and there was no way I couldn’t close the deal as long as I got the leads. Well guess what…. no leads, even though my dashboard said I received 1000s of leads and projected my cash flow to something super ridiculous. I call the Yelp team constantly asking for tips and help and they cant give me anything. What a waste of time and money! I wish I could review Yelp ads on Yelp for businesses to see before they waste their money.

    Reply
  6. DJEmir

    I was expecting a doable .10 to .50 per click Prices sky rocketed to $16.75 a click which is ludicrously expensive. I personally have not seen a return on my investment at all. And have been extremely upset with the lack of control over the campaign and the lack of returns. It always sounds great in theory but it really doesn’t work at least not for me.

    Reply
  7. patrick

    Dear Mr Fong I have been following these comments for awhile and recently took on a client that is spending 2K-3K a month. Now that we are in the Mobile world and they have a click to call button on their ad manager knowing you would approve i added a tracking no yesterday – do they break down the clicks ? what other advice can u offer and i would be happy to share results with your readers

    Reply
    1. Raymond Fong Post author

      I assume you’re talking about tracking on Yelp and within Yelp. You would want to get clarity on what a “click” is – I believe Yelp means a “click on your Yelp ad” is a click – but remember that this does not necessarily translate to anything else after (i.e. the person who clicks on your Yelp ad gets taken to your Yelp listing page but may not call or click through to your website etc. which results in a non-monetized click that you just paid for).

      So get clarity on what a “click” really is.

      AS for tracking on your website, having Google Analytics installed will help you monitor how much real traffic is coming in via Yelp.

      Reply
  8. Rose

    We have a problem with Yelp not showing our good reviews ~ we had one bad review. Which they had stated they came to our office for a sales pitch, We never have customers come to our office. We go to their homes.

    Since then we have tried to have yelp take it down~ They have not

    We have also had several other customers write good reviews which they do not post~ they hide them saying they are not relevant and do not tally them into the rating~

    The Owner believes that if we advertise with them they will take the false bad review down and post the others.

    Has this happened to anyone else?

    Is there some validity to this thinking of being blackmailed to advertise with yelp?

    Reply
    1. Raymond Fong Post author

      There are definitely business owners who feel like this happened to them as well although I don’t know if 1. there are any concrete evidence and 2. if any concrete evidence can even be acquired by someone other than Yelp itself.

      Reply
  9. Kim Gaskins

    I sure do wish I had read this before I was lied to. The sales rep told me my cost per click under the program I enrolled in would be .90/click. After signing, I never seen my rate that low. I pay almost $4/click which is out of my price range for a beginner. Not only that, I rarely see my ad in the manner of which the rep explained it would be seen. And my reviews…every review that I got was taken down by yelp. Just be warned that the sales rep will not be totally upfront with you. If you are a new business trying to grow, you may be better off with the free service.

    Reply
  10. Chas

    Mr. Fong
    Great information, We pay $350 for their 3000 impression “beginner program” it included a video (they shot). They have been trying to get us to upgrade to a level 2 pay per click program for the past 2 years, I have resisted. We have a cupcake shop, I would say 80% of our customers come from yelp, I am most happy about that, not sure if it is based on impression use or customers just searching, according to their analytics. We have gotten YTD 16,338 user views and 2364 leads. What has always been my concern is what would the results be if I did not pay?

    Reply
    1. Raymond Fong Post author

      The user views and “leads” – are those reported to you by Yelp or some other tracking program you use (independent of Yelp)? I ask because if you look at Yelp’s definition of Customer Leads, they include “Clicks to Your Website” and “Call to Action Clicks” and a other actions that may not result in direct sales. They are desirable actions for sure but don’t confuse them with direct ROI.

      The only way for you to know if their program is paying off for you is if you either 1. pause the program completely for some time and see how that impacts your bottom line or 2. change your “impressions” to say… half or less and see if that impacts your bottom line.

      Basically, see if changes to your paid number of impressions impact your bottom line. Hopefully that makes sense. (#2 would be the “safer” route for you considering your fear of missing out).

      Reply
  11. Cindy Granados

    I wish I had read this before I got conned by their sales pitch in September. I was promised 35 to 40 customers. Cost would range between $125 – $850 max per month. I responded, ” if you can produce me 40 new customers I can easily afford $850 per month.” In October I got 2 customers (value ($414); my bill $850. I was told by the sales lady that it was $11 per click but was billed $14 per click! I did the early termination of $700 but it requires a 30 day notice. Of course now there’s another dreadful bill to look forward to. I recently got suspicious when I started getting more involved in reviewing my account as I was getting charged $14 per click. I notice that it was logging clicks and unanswered calls. When I called back the missed call, it was a marketing firm. I asked how he received my information, he responded he paid $.10 for my info. Yelp’s ad campaign ischarging me $14 per click and selling my information for $.10 to marketing firms. Sounds like fraud to me! Is there any legal recourse I can take?

    Reply
    1. Raymond Fong Post author

      Sorry to hear that Cindy, you’ll have to consult with a lawyer. As for your charges, if it’s on a credit card you might speak with them as well and maybe they can give you insights/feedback on how to proceed (i.e. perhaps via a chargeback). If you have the “promises” in writing, I think your credit card rep would be very interested to hear how a merchant (Yelp) failed to deliver what they promised.

      However, I am not a lawyer and not versed on the legal side so you should still consult with an attorney.

      Reply
  12. joi

    Excellent article. Thanks. I have been using Yelp going on month 4. I began with a promotion and when it ran out I continued with their lowest $150 mo. one new client pays for the ad, so for now the exposure is worth it. Anything over 1 client is gravy. I don’t like their business model or ethics I feel its shady. But for now I’ll use them. I am interested in other resources.

    Reply
    1. Raymond Fong Post author

      Yeah, they may be worth it for some businesses whose clients are quite valuable.

      The thing you have to think about is… would you get that “new client” withOUT paying for their service? I.e. you’d still have a free listing with Yelp and folks would still be able to find you.

      Reply
  13. Jeff

    I had a meeting planned (but was most likely going to say no) with yelp tomorrow. Looked around and found this site. Cancelled the meeting. Kind of interesting how reviews of yelp deterred me from using yelp, right? Thanks for the article and comments!

    Reply
  14. Paul

    Sole proprietor here, new to advertising. I didn’t make a dime last month from any of these and it is now going to cost me $1000 that I cannot afford. Not one new client. I didn’t make $1000 all month last month. Total rip off. They are charging $175 for the clicks or leads or whatever, and the fees for the video, etc. plus the $700 cancellation.

    Reply

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