‘Views’ or ‘Calls’? Yelp is Agnostic

Yelp is differentiating itself from InsiderPages, Judy’s Book and other review-based Yellow Pages by giving local advertisers a choice: buying a “calls program” (Pay-Per-Call) or a “view program” (Pay-Per- Click).

CEO Jeremy Stoppelman told The Local Onliner that advertisers want to set a monthly Internet ad budget. It doesn’t matter whether they reach their ceiling via pay-per-call or pay per click, he says – and in any case, many walk-in businesses aren’t judging their advertising ROI based on the phone calls they receive.

Familiarity also plays a factor. In the Bay Area, which is Yelp’s headquarters, many advertisers have already used CitySearch’s pay- per click system, which is three years old. Other sites have found that Pay-Per-Call provides a much higher return, typically in the $4-7 range. But it will be interesting to see whether Yelp sticks to its hybrid program, which seems well-thought out to me.

A Profile of Yelp

I didn’t know much about Yelp, which is “off the circuit.” But the site participates in Google Local’s aggregation of reviews (along with CitySearch, InsiderPages, WCities and some others). It touts over 100,000 reviews and had over 500,000 visits in December. If each visitor came five times, that means it has 100,000 uniques. The site has received $5 million in funding from Bessemer Venture Partners.

28-year-old CEO Stoppelman, one of PayPal’s first hires, says the site has been bent on creating deep community using “living, breathing content providers.” Competing sites have bribed reviewers with Starbucks cards, gas cards and other means to pump up the volume, but Stoppelman never wants to take that route. Those reviews are often slapdash and untruthful, he notes, adding there is no substitute for good word of mouth.

The site launched in 2004, around the same time as its competitors. The Bay Area has been its focus, and still accounts for 35 percent of the site’s traffic. But it has begun to branch out. It has additional directories in Boston, Chicago, New York, Los Angeles, San Francisco and Seattle. I see a good smattering of reviews in other cities as well. Top categories are Restaurants and Shopping.

Four of the site’s 18 employees are in Boston and Chicago, respectively. Yelp is advertising for four more employees, at least one of whom will be based in New York.

Stoppelman says the site’s modus operendi is to dig deep in each of its markets. It isn’t especially counting on partnerships, aside from a vendor deal with Open Table.

Yellow Pages partnerships would be “very difficult because they’d have to handle the negative reviews.” Newspapers would be more appealing, but may be too slow. Stoppelman also says he doesn’t really get the social networks that hope to create stickiness with local articles and discussions, a la BackFence.

Looking at Yelp alongside InsiderPages and Judy’s Book, it is really hard to see a great deal of difference between them (although Judy’s redesign makes it the most compelling, graphically). But Yelp definitely has good quality reviews; a strong young, urban focus; and some really nice mapping and blogging tools. For now, it all works well.

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