Yelp Oveview

Yelp is a social networking, local search and review website created in 2004 that is based on the principle of "Real People, Real Reviews." Yelp has many functional uses which include the ability for users to select their city, post and search for reviews of local businesses and connect with others in their community doing the same through the "Talk" feature, a community message board.

Advantages of Yelp

One of the main advantages of advertising with Yelp is the highly targeted market. Businesses within a community have direct access to Yelp users searching for places to go within their area. Some businesses may choose to utilize Yelp as a free form of advertising stemming only from the user generated reviews. A feature of Yelp also allows business owners who have been reviewed to freely respond to the reviews and communicate with patrons. Yelp also features “Sponsored Results” which is the main form of advertisement. Sponsored Results appear highlighted within a search listing and business owners using this feature are able to enhance their business profiles by adding photo slideshows and preventing competitors from advertising on their businesses page. Many business owners that have received favorable reviews on Yelp have begun to advertise that fact alone with signs saying "People Love us on Yelp." Reviewers have also begun leaving behind calling card at businesses saying "You've been Yelped" to direct owners to the site where they can read the reviews and become further involved in the online community. (Chafkin, 2010)
Yelp has also banded with Facebook in order to further target their audience and personalize the Yelp experience for its users. Yelp users on Facebook can 'like' businesses through Yelp, and invite Facebook friends to join the site.

Promotional video by to explain the site features to business owners and potential advertisers.

Limitations and Threats

The fact that Yelps content is user generated may pose a problem for some businesses since they are subject to poor or even misleading reviews. This has led to frustration among many business owners who find they have unknowingly been reviewed on Yelp. Steve Ranjbin, owner of the Rooz Cafe in Oakland, California, hung a sticker in his coffee shop which read “No Yelpers” after a Yelp review saying “the coffee was lousy, the wait was long” was posted. Ranjbin claims the sticker was a joke but does take issue with the Yelp reviews stating his business had been hurt by reviews which misquoted him and offered false information. ''They don't listen to business owners unless you're an advertiser paying Yelp,” he said. However, even paying Yelp to advertise does not guarentee favorable reviews, as it is Yelps policy to not remove any review, even for advertisers, unless it violates their terms of use policy. (Fost, 2008)

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Business owner Diane Goodman confronted a Yelp user at his home after heposted a negative review of her bookstore. She was booked on battery charges.

Yelp has unfortunately been caught in the middle of 'scandals' in some cities where business owners have accused the website of offering to move negative reviews to the bottom of the page if they became a 'sponsored member.' Although it is against Yelps policy and the company has denied the allegations, these issues have been reported by local news outlets in several cities and have caused some damage to Yelps credibility in the mind of some consumers.

The credibility of Yelp advertisers may be affected by reports such as this.

Yelp also has several competitors. and CityScape are two websites that offer similar search features. UrbanSpoon, a phone and computer application that allows users to search and review local restaurants, is also a competitor, although Yelp has launched its own mobile application as well.


Yelp advertisers pay between $300-$1,000 a month to appear as a Sponsored Result in local searches. This gives them the benefit of a more prominent appearance within the search results listing, an enhanced page with the option of a photograph slideshow, and most importantly advertisements on non-sponsoring competitors pages.

Reach and Frequency

In August, 2010, Yelp experienced an average of 38 million unique visitors within the month. In addition to the website, The Weekly Yelp, an e-newsletter, is available in 42 cities around the country. This makes Yelp a very effective tool for businesses looking to expand the reach of their advertising in a cost effective manner.


As shown in the Limitations section, Yelp has had a serious impact on business owners such as Rooz Cafe owner Steve Ranjbin. Many business owners have taken their grievances against Yelp reviews much further than a small “No Yelpers” sticker. Earlier this year a San Francisco dentist sued a patient and Yelp user for defamation after she posted a Yelp review saying “Don't go here unless you like excruciating mouth torture” along with a detailed description of her experience. The dentist claimed that the review caused a drop in her revue. While the case was thrown out by a California judge, the situation is becoming increasing common. This highlights the obvious impact of user generated reviews and their effect on businesses. (USA Today, 2010) Conversely, Yelp can also be a very effective marketing tool for businesses trying to reach a large portion of the local audience on a small advertising budget. As an example let's look at Seattle, Washington. In 2009, over 70% of the cities restaurants had been reviewed on Yelp, while only 5% had been reviewed in the leading newspaper. (Luca, 2010) This illustrates a huge gap in the amount of businesses that are covered by user generated websites as opposed to traditional media. Yelp has even grown to receive mentions in popular TV shows, like in this clip from USA networks "White Collar."

"Yelp gave it three stars."

Audience Qualities

According to the Nielsen ratings data from March, 2006, 2.5% of all internet users visited within the month, and Yelps numbers have only grown since. (Fost, 2008) A reported 60% of the Yelp users are between 26-25 years old. (Klaassen, 2006) The majority can be described as 'in the know' and are from a more urban demographic. The majority of Yelp users post reviews and content for their local area. Yelp is also partnered with Facebook, and recognizes a users profile when they are signed in while visiting the website. Many Yelp users also use Facebook and a variety of other social networking sites.

Success With Yelp

Because Yelp is highly targeted within city markets, it is hard to show large scale effectiveness of advertising with it, this will instead look at local Morgantown, WV companies that are using Yelp. While there are no Sponsored Results, meaning no local companies have paid to advertise on the website, many local businesses (3,904 of them!) are featured on the site. Most local businesses have earned 3-5 stars and the joy of free buzz and advertising through the positive reviews. These are just a few examples:
  • Slight Indulgence, 5 Stars (4 reviews) - "Very friendly and helpful employees. A great source for wines, coffee beans, gourmet chocolate, home brewing supplies, and coffee, lattes, etc. They really have a little bit of everything in this small store. And if the don't have something you want, they can get it." - Mikala S
  • Black Bear Burritos, 4.5 Stars (40 reviews)- "One of my favorite places to eat in Morgantown. Good, healthyish food with a fun local crowd. The prices aren't too bad either, especially when you consider how the food is super fresh & ingredients are provided by local sources."-Soly Z
  • 123 Pleasant St, 4.5 Stars (8 reviews)- "They do not sell the normal beer... this place is not of the normal. It can have punk shows one night and a poetry slam the other. Plus it is right across from Black Bear. Only downside is it gets extremely hot. I would say for a new age date you hit this up and black bear."-Daniel D


Fost, D. (2008, May 21). 'The Coffee Was Lousy. The Wait Was Long.'. New York Times, p. 6. Retrieved from Academic Search Complete database.

(n.d). Want to complain online? Look out. You might be sued. USA Today, Retrieved from Academic Search Complete database.

Luca, Michael. "Reviews, Reputation, and Revenue: The Case of" Boston University. Boston University, n.d. Web. 29 Nov. 2010. <

Klaassen, A. (2006). Media Morph: Advertising Age, 77(26), 26. Retrieved from Academic Search Complete database.

Chafkin, M. (2010). You've Been Yelped. Inc, 32(1), 48-55. Retrieved from Academic Search Complete database.