They’re Not Searching; They’re Going to Yelp


“When people want to find a place to go to dinner, they’re not searching; they’re going to Yelp.

– Steve Jobs, Apple Chairman and CEO (April 8, 2010)

I don’t always begin a blog post with an iconic quote from the visionary Steve Jobs, but when I do, it’s because I think that the guy was really on to something. Continue reading “They’re Not Searching; They’re Going to Yelp”

Yelp Ads: A Viable Marketing Strategy, Or a Total Rip-Off?

I like having a blog. It lets me rant about things. Here’s my latest on’s oddball ad model and pricing.

The last article I wrote on Yelp centered around their controversial review-filtering algorithm. Today’s rant, however, will focus on their core advertising and revenue model, how it differs from the popular ad models of Google and Facebook, and why it may not be the *best* fit for a business like mine.

Warning: Lengthy Technical Online Advertising Explanation

Major companies that make money primarily by selling ads online, like Facebook and Google, serve up ads to their users using a competition-based bidding model. When you see an ad on these sites, it is targeted specifically at you using the droves of personal data you’ve provided Facebook and Google over the years. Advertisers then use this data to compete with one another for the privilege of showcasing their products & services to you, with highly-competitive niches commanding large CPM (cost per 1000 impressions) prices.

For example, users who “Like” the iPad Fan Page, or people with browser histories full of iPad-related searches, will likely be shown iPad-related ads on Facebook and Google, respectively. If Facebook/Google sees that a lot of people are clicking these ads, the ads will be shown more often, and their CPM price will increase. Over time, the highest-performing ads for a given niche will nudge out lowest-performing ads, because Facebook/Google makes more money from the ads people are actually clicking on.

When you buy an ad on Facebook/Google, you design the ad, set a budget, and you’re up and running: your targeted ad is displayed, and depending on your niche, you’ll pay anywhere from $.01 to $5.00 per 1000 impressions. Things are a bit different for Yelp advertisers, however.

The Yelp Advertising Model: A Total Rip-Off

Strangely, Yelp’s online advertising model is based around selling subscription-based ad packages in 6-12 month contracts. Their intro ad package (at the time of this writing) requires that a business sign up for a $300/month, 6 month minimum package (with a $600 early termination fee). They guarantee 600 “targeted impressions” each month, i.e., they would show my ad 600 times to users searching for “computer repair” in my area.

This represents a whopping $500 CPM, or $500 per 1000 impressions. This is over 100x what national online advertisers typically pay for huge ad campaigns.

Compared to standard and widely-accepted online advertising models, Yelp’s model looks like blatant exploitation and robbery!

Exploitation of Technical Ignorance

Of course, Yelp Ad sales reps will never, EVER mention terms like CPM or CPC. They don’t want potential advertisers to know just how ludicrously overpriced and low-tech their ads actually are. (Yelp offers advertisers nowhere near the tracking and targeting data that Facebook and Google do)

It seems to me that the Yelp revenue model relies on three factors:

  1. Building a business owner’s perceived value of reviews,
  2. Using that perceived value to justify the sale of expensive ads, and
  3. Exploiting the fact that *most* business owners have absolutely no knowledge of standard online advertising practices.

I cannot support a program that, in my estimation, overcharges people by exploiting their ignorance. Too many unscrupulous computer consultants and other tech-savvy businesses are guilty of similar unethical practices and behavior.

It’s a shame that their ad program is the way it is, because I use and recommend Yelp, and everyone I’ve talked to that works there is extremely friendly and courteous.

But if you’re a business owner and looking for affordable advertising, look elsewhere.

A Review of Yelp Reviews: Content Ownership and Search Result Bias

Computer Services Reviews on Yelp

Early on in my career as a computer service professional, I realized the importance of referrals and word-of-mouth advertising. So I decided to list my business on several review sites in order to gain positive reviews and increased business.


A review site is a website on which users can write and read about people, businesses, products, or services. is a popular review site that offers users a convenient way to seek out new and highly-rated restaurants, write a review on their favorite (or not so favorite) business, or create their own business page.

Consumers and business owners alike love review sites, because they all provide a “word-of-mouth” sense of community and trustworthiness. Yelp’s slogan “Real People. Real Reviews ®” embodies this attitude, and the company’s commitment to providing “real reviews” is so strong that it only scores 3 out of 5 stars: on its own website!

But how can Yelp allow people to use its service for free? How do review sites stay in business?

Paying For and Filtering Reviews, like many review sites, is supported by advertising. And as a popular site (#170 in worldwide rankings at the time of this writing), may charge a considerable fee to allow businesses to advertise with them.

However, critics of the review company say that it unfairly gives its biggest advertisers a higher ranking in search results, or that it punishes and decreases the rankings of businesses that refuse to purchase Yelp ads. Spokespeople from Yelp have repeatedly denied these allegations, responding that the company does everything it can to ensure that the reviews on its site remain real and unbiased.

To help address these credibility problems, the company has instituted a review “filter”: a computer program which determines if a review is legitimate and thus displayed in search results, or suspected as a fake and then filtered out. The filter periodically re-evaluates each review, so that previously un-filtered reviews may disappear, and old filtered reviews may come back.

Silverleaf Computer Services – Filtered!


So I listed my business on Yelp, and clients have written reviews for me. Now, when a person looking for “computer services” near “van nuys” types these terms into Yelp’s search engine, they may find my business near the top. They can click the link to read reviews about the business, where currently only 3 of a total 11 reviews are displayed. One can still find these filtered reviews, but they do not count towards the overall rating.

The majority of reviews for Silverleaf Computer Services weren’t always filtered out: in fact, the filtering soon began after a phone call I received one day. “Billy” from the Yelp Ad Department called to comment on how great my business was doing in search results. He also wanted to know if I felt that my business benefited from being in Yelp (which it has), and asked if I’d be interested in advertising with them.

I politely declined.

Content Ownership and Search Result Bias

I’m not going to bash for unfairly filtering my reviews as punishment for not buying ads. On the contrary, I’ve come to understand that even though these reviews were written to help my business, they are part of an online community that Yelp owns and maintains, and are not “my” reviews.

All review content (though user-generated) effectively becomes the property of the website on which it is written. Yelp, or any ad-driven site, may provide or deny access to its own content as it sees fit: if the site wants to use this valuable content as incentive for advertisers, then it may do so as a viable marketing strategy.

But people who rely on review sites (or any search engine for that matter) for information should realize that these websites are ad-driven, and are NOT free of bias. And while search engines are powerful information-finding tools and do a good job of providing relevant information, search engine results should be taken with a grain of salt because any company that gathers, organizes, and ultimately controls what information is displayed on the Web also has the power to NOT display certain information.

In conclusion, do not simply rely on companies like Yelp or Google to provide only “good” information while filtering out the “bad.” Such reliance can leave you open to manipulation by advertisers, or worse, information filtering and censorship.