We all know Yelp – we’ve probably all used Yelp’s comment section to decide whether or not that business is worth giving our money to. What you might not know is how they are extorting the small businesses they partner with.
For starters, it’s helpful to understand that Yelp generates revenue through a pay per click (PPC) search model. This means whenever a user clicks on your advertisement, you pay Yelp a small fee. You never pay Yelp a cent if no one clicks on your ad.
In theory, this sounds great – if someone is seeking out your product or service and clicks on your ad, chances are you’re going to see some of that return. This is what makes paying $15, $50, or even $100 a click worth it.
In practice, it’s not all it’s cracked up to be. When setting up your Yelp account, you are able to plug in keywords that correspond with your business. For example, owner of San Francisco-based Headshots Inc. Dan St. Louis – former Yelp advertiser turned anti-Yelp advocate – plugged in keywords for his business, such as “corporate photographer” and “professional headshots”. When someone in the Bay Area searches one of those terms, they are likely to see Headshots Inc.’s Yelp ad.
You are also able to plug in keyword searches in which your ad will not appear. That sounds great too – no need to pay for ad clicks that will ultimately not bring in revenue for your business. In the case of Headshots Inc., Dan plugged in terms such as “affordable baby photography” and “affordable studio photography”, as his studio is quite high-end and would very likely turn off a user who is using the word “affordable” in their search.
How Yelp really cheats its small business partners is that it finds loopholes in your keyword input to place your ad in as many non-relevant searches as possible. This ensures that your ad is clicked more and, as a result, you have to pay them more without reaping any of the monetary benefits for your business.
If you plugged in “cheap photography” to your list of searches in which your ad will not appear, Yelp might still feature your ad for the “cheap photos” search. As if a small business owner has the time to enter in every single possible keyword someone might search!
In the case of Headshots Inc., Dan ended up paying $10k in total ad spend to Yelp with very little return. Needless to say, he is pissed.
So what does this mean for you if you use Yelp for your business? If you don’t want to completely opt out of Yelp’s shenanigans, try these 3 tips from Dan:
- Try searching some potential irrelevant keywords – are your ads showing up in these searches?
- Do your best to block the irrelevant keywords. It’s impossible to get them all, but the more you do the more money you will ultimately save.
- Keep an eye on the conversation rate on your profile – does more clicks mean more client inquiries? Make sure Yelp isn’t sending low-quality traffic to your profile.
Ultimately, it’s about protecting your small business. Yelp is the latest in big tech to be outted for manipulating individuals and small businesses to up their margins – a truly despicable act, if you ask me. If you don’t have tens of thousands of dollars for ad spend, then either boycott Yelp or try these tips – your company may depend on it.