Yelp has been getting a lot of attention lately. Mostly because of Google becoming more friendly with them in the organic search results but also because there's been a handful of lawsuits that have made large waves in the online reputation space. I've even found myself almost hitting "Elite" status on Yelp after reviewing so many business on their iPhone app....it's pretty cool....and Yes, I do go out to eat a lot....maybe too much.
Many of the business professionals I work with have asked me, "Should I advertise my business on Yelp"? The answer is MAYBE.
Consider the following before spending money with Yelp.
CPM: When evaluating an online marketing activity, it's best to do some fast calculations of some very important metrics that will either bring you new customers or flush money down the toilet. Most non-pay-per-click ads are priced on a CPM model (cost per 1000 impressions). Based off the Yelp pricing I've heard from small business owners being quoted, the monthly cost ranges from $350 a month to several thousands per month. On the low end, Yelp states you'll see around 500 impressions for the $350 dollars you're spending. That comes to $700 CPM. When comparing that to other CPM rates like retargeting (highly targeted towards people who have already visited your site) the costs there are normally around $2.50 CPMs. That makes Yelp Advertising 30,000% more expensive. Hmmm. You do the math.
Let's take it a step further and estimate your cost per client acquisition. At $700 for 1000 impressions, let's assume that you will see a click through rate of 1%. That equals 10 clicks at $70 bucks per click. What if those clicks turned into people calling your business at a HIGHER THAN NORMAL percentage of 5%? That would give us 0.35 phone calls (not even a full phone call). The math comes to well over $1000 in cost for a phone call at this point. Maybe instead of a call, it's a visit to your location. What's your conversion rate to get them to come back again....or maybe even become a lifetime customer? For most small businesses, this simply doesn't add up.
Call Tracking: I'm a huge advocate of tracking your calls. Especially for small business owners where your marketing budget is small. You want to allocate that small amount of funds to something that actually turns into an ROI, right? Understanding ROI from Yelp is more difficult than other marketing tactics I've taken. It makes zero sense to place a call tracking number inside your Yelp profile. If you care anything about your Local SEO, please please please, do not change that number from anything else but your actual business number (for further clarification on this point, contact me).
Google Adwords: Are you already spending money here? If so and you're getting low cost leads and calls....please continue to hone in on a better performance there instead of throwing more ad dollars at Yelp. I also suggest that you couple this with remarketing and Facebook Ads/ Facebook Remarketing as you'll most likely see a higher and cheaper conversion rate.
Long Term Contracts: Yelp tries to keep that relationship long term. I can totally understand from a business perspective why that is but it does hurt the little guy. Yelp sales people will also tell you that staying on longer does help increase conversion but I haven't seen any specific Yelp numbers there to confirm this statement. If you decide to spend money on Yelp advertising, I suggest you negotiate shorter term agreements and have your lawyer go over the verbiage in your agreement with a fine tooth comb.
Yelp is definitely the new, sexy, flashy tool out there right now, but do some thinking about this before jumping in bed with these guys.
For more info on local marketing, contact the Market Loyal team here.