June 12, 2009
By now, most of you probably have used– or at least heard of– Craigslist, the free online classified ad service. Craigslist is widely blamed for crippling newspapers by undercutting the most profitable advertising stream of the newspaper business.
But there’s another social media service you may not have heard of that threatens to eat its own chunk of the old-media pie.
Yelp is a community review site where members post their impressions of businesses and events. It’s geared toward dining and entertainment, but users can also find reviews of things like auto repair, veterinary clinics, bookstores and dentists.
Most of the content is user-generated, but Yelp does sell ads and allows advertisers to post news of sales and special offers.
This kind of targeted, local advertising is exactly what newspapers need more of as traditional large national and regional advertisers cut spending or even disappear through mergers and bankruptcies.
But Yelp, begun five years ago in San Francisco and expanding rapidly to new cities, is already hard at work establishing a foothold in the local online ad business.
Yelp is easy to use and allows you to slice and dice information any number of ways– for example, you can follow the reviews of certain people. If you find someone whose tastes seem to match yours, you’re likely to pay attention when that reviewer alerts you to a new bar or sandwich shop they like.
So in addition to cutting into the advertising dollars of old media, Yelp also threatens their position as the best-informed source of local information.
I’ve found, for example, that I tend to enjoy movies that critic Roger Ebert likes. If Ebert gives it a good review, I’m more likely to go.
What if I can find my own Roger Ebert on Yelp– and not just one Ebert, but half a dozen? And what if I can find my Ebert not only for movies, but also for drinking and dining and getting my car fixed?
Suddenly I don’t need the real Roger Ebert any more, and I don’t need the old-media outlets where his reviews appear.
The challenge for marketers is to find a way to put this people-powered site to work for your clients. Just as many businesses now have a Facebook page, they should also get in the habit of asking their customers to post a review on Yelp.
It’s obviously a better fit for some than for others. The latest hot nightspot: yes. A premier maker of industrial generators: not so much.
One potential issue with Yelp is the division between editorial and advertising. The old media were (and still are) scrupulous about keeping news and ads separate. But published reports in the San Francisco Bay area have accused Yelp of tailoring its content to benefit advertisers. Some business owners say they were told that if they bought an ad on Yelp, the site would “bury” negative reviews of their business or even remove them entirely, while moving positive reviews to a more visible place in the rankings.
Yelp denies these practices. But the allegations illustrate once more that today’s Web is still the Wild West, with rules being made up on the fly. Ultimately, the success of Yelp and other such sites will depend on whether users– and advertisers– believe they’re getting valuable, credible content.