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Yelp Co-Founder Admits There Is Room For Improvement

The Huffington Post The Huffington Post 22/02/2016 Quora

These questions originally appeared on Quora - the knowledge sharing network where compelling questions are answered by people with unique insights.Answers by Jeremy Stoppelman, CEO and co-founder of Yelp, on Quora.Q: Given the seemingly arbitrary "Yelp Sorted" reviews, how can you prove that Yelp doesn't rate paid advertisers preferentially?

A: Every day our automated software goes through the more than 95 million reviews that have been submitted to Yelp to select the most useful and reliable content. Unlike many other sites, our stance is quality over quantity when it comes to reviews. As a result, we only recommend about 71% of the reviews that are submitted.

If advertisers could control their reviews, then you'd expect them all to have perfect 5-star ratings on Yelp. Spoiler alert: They don't. To test this, do a few searches in broad categories in your area - maybe for a dentist, mattress, or locksmith. You'll find ads for businesses with all sorts of star ratings. Conversely, you'll find thousands of businesses in organic results with great ratings that don't pay Yelp a dime, and we're fine with that.

Still don't believe us? Feel free to do your own version of a simple Google test like this [ "Yelp advertiser" AND "rude staff"] by inserting your own negative phrases in the last set of quotation marks. The words "Yelp advertiser" only appear on pages of advertisers, which begs the question: if these Yelp advertisers get a special "Delete" button for negative reviews, why in the world aren't they using it? (Hint: because it doesn't exist.)

Additionally, an independent academic study (not commissioned or paid for by Yelp) found that advertising plays no role in how reviews are recommended on Yelp. Or as this in-depth profile of Yelp in BuzzFeed puts it: "Harvard Business School professor Michael Luca has co-authored a new study that effectively debunks the extortion theory." Conspiracy theorists have had their day in court on more than one occasion, but courts have repeatedly dismissed their lawsuits claiming that ratings and reviews on Yelp are somehow tied to advertising. The FTC also concluded a year-long investigation of similar claims without taking any action. You can find the media reports here: PC World, WSJ,HuffPost, CNET, LA Times, CNN Money.

Q: How can Yelp positively affect small business and help them grow?

A: Yelp levels the playing field between small local businesses and mass chains, allowing them to earn new customers based purely on doing an incredible job day in and out vs. simply having a massive advertising budget. Thanks to Yelp amazing local businesses now get free exposure just for having a great product and delivering good service.

We know that 89% of Yelp users spend money at a local business within a week after searching on Yelp. That kind of purchase intent drives dollars directly to small businesses. And if they use the free tools we give them, like responding to reviews, businesses report getting an average of $8,000 more in annual revenue.

Yelp also creates an opportunity for businesses to hear feedback and make improvements based on that feedback. People have always talked about what they liked or didn't like to their friends, but the difference is with Yelp, now businesses can see and respond to that feedback and be a part of the conversation.

Q: In what areas does Yelp have the most room for growth?

A: Consumer adoption and advertiser growth remain low hanging fruit. While most of us here know Yelp and well, Yelp only has unaided brand awareness of about 30% among digital adults in the US. Similarly, we only have about a third penetration among smartphone users. And we have about 20 million monthly users of our mobile app. That is a lot of opportunity to make more consumers aware of Yelp and get them using the Yelp app.

On the local business front, there are about 20 million local businesses in the US and about 50 million in the countries where Yelp exists. Only 100,000 businesses currently advertise on Yelp as of last quarter and about 2.6 million have claimed their page. Local search advertising is an enormous market and we are still just barely scratching the surface. A major reason for that is that most small business advertising spend is still offline.

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