Yelp is accused of extorting local businesses and manipulating reviews in an explosive new documentary by Prost Films. We talk with director Kaylie Milliken about Yelp’s aggressive paid advertising sales tactics and claims of small business bullying.
5 Questions You Can Answer After Listening to this Episode on Yelp and the Ethics of Online Review Sites With Kaylie Milliken:
1. Why are online reviews so important for local businesses?
2. Could Yelp be a small business bully?
3. What are the biggest issues with online reviews?
4. True or false: Kaylie Milliken is Weird Al Yankovic’s niece.
5. Should my business pay to advertise on review sites like Yelp?
When our host Dave Eddy isn’t fanboying over SEO, he occupies his time with all things local business. He knows just how important online review hubs like Google My Business and Yelp can be for small brands. He’s also seen first hand the huge impact that positive and negative reviews can make to a business’ bottom line.
So when Dave came across a documentary investigating online directory Yelp on claims of extortion, review manipulation and even review fabrication, needless to say he wanted to dig deeper.
In this episode, we chat with CEO of Prost Films and director of Billion Dollar Bully Kaylie Milliken about ethics in the online review industry and just how much value these big marketing companies can give (or take away) from your local business.
INTERLUDE! If you’ve just discovered Redback Solutions, below is a short video about who we are and what we do. If you just came for the article, you can simply skip past the video and keep reading 🙂
Why Are Online Reviews So Important for Local Businesses?
Whether visiting your website, searching on Google or using online directories like True Local, TripAdvisor or Yelp, online reviews have immense pulling (or pushing) power for consumers. Over the last decade, online research has become a normal part of the buying process, so much so that 40% of Australians read reviews 1-3 times a week.
Our favourite mantra here at Redback Solutions (aside from “I ❤️ SEO”) is: “People buy from people, not faceless corporations”. A whopping 90% of customers make buying decisions based on positive reviews. This is why they hold so much influence—because word of mouth matters.
Building up a decent stash of online reviews is also critical to any local business’s good SEO strategy. According to MOZ’s Local Search Ranking Factors Survey, It’s estimated that online reviews make up 10% of how search engines like Google rank results.
The 3 Biggest Issues with Online Reviews
1. The voice of the minority
Unless you’re a serial reviewer (and there are plenty of those out there) you are more likely to post an online review when you’re super-duper angry, or slightly less often when you’re super-duper happy.
So unless your business provides consistently terrible or consistently outstanding service to each customer, the majority of them won’t bother to leave a review. These extreme experiences can negatively affect your business’s online reputation, when in reality, most of your customers would rate you 3–4/5.
What happens when you’ve got no reviews? This is probably the most dangerous situation to be in. All it takes is one misinformed person to be furious that you don’t open on Sundays, leave you 1 star and a tirade on Yelp and BAM! Now the only opinion of your business that potential customers will see is a negative one.
This is why it’s so important for local businesses to encourage their happy customers to leave a great review and reduce the likelihood of an unfair reputation.
2. Everyone has different standards
The star rating system is widely used by review sites to easily show consumers what their peers think on average. The trouble with star ratings however, is that everyone has their different standards.
I’m often confused by 3 star reviews that include no complaints and are entirely positive, because unless I’ve had a bad experience with a business, I’ll usually leave 5 stars. I know many people however, from whom you you’d be lucky to get a 3 or 4 star review for the same service.
3. Fake or incentivised reviews
There are plenty of ways to pay for fake or biased reviews, some people even make a business out of it! While paying for reviews is downright wrong, the lines become blurred when marketing platforms and businesses offer discounts or other incentives to post positive reviews.
Yelp doesn’t directly incentivise users who post reviews, in contrast to other review-based sites like Trip Advisor who actually run promotions to reward users for submitting reviews. It is unclear if Yelp penalises these businesses or not, but we do know that they don’t publicly condone this behaviour. Yelp’s PR Manager Rachel Walker explains:
“We don’t recommend that businesses directly solicit or incentivise or pay for reviews because this can lead to a bias that can be really harmful to consumers”
To be worthy of being chosen as a member of Yelp’s elite, you must leave reviews regularly with “high quality tips” and have a detailed personal profile (among other things). There are those who claim that these elite Yelpers have the power to extort extra-special treatment or even be bribed by businesses to write rave reviews.
What is Yelp and How Does it Work?
As we’ve established, Yelp is a local business directory that acts as a marketing platform. Like other sites of this kind, Yelp uses crowd-sourced reviews to help consumers make more informed choices about where to eat, shop, travel, get their car serviced, whiten their teeth—anything!
Yelp is now a multinational corporation but it is doesn’t hold nearly as much gravity in Australia as it does in the US, which holds 115 million of Yelp’s 145 million monthly users.
It is free to list your business on Yelp, but in reality (mostly in the US) a customer has probably already listed it and left you a review. On Yelp, anyone can list a business, so business owners usually need to simply claim their business. It is also generally impossible to remove your business from Yelp.
A great way for small local businesses to market to new customers, Yelp listings have always been more popular for independent businesses rather than big chains. According to a 2011 Harvard Business Study, Yelp’s affect on chains is “statistically insignificant and close to zero”.
In order to reduce the instances of fake reviews, Yelp developed an algorithm to filter them. Reviews found to be dubious are not deleted, but simply hidden at the bottom of each business’s Yelp page under a small grey link that reads: “reviews that are not currently recommended”. These non-recommended reviews are not included in the overall star rating of a business.
Yelp discloses very little about the algorithm which they use to filter reviews, except that it is based on “quality, reliability and user activity”. Their reason for being so tight-lipped is understandable; if Yelp were to tell everybody how their filtering system works in detail, the system would be swindled overnight and immediately become useless.
Considering business pages are free to create, how does Yelp make money? Operating on a Pay Per Click (PPC) advertising model, businesses advertising on Yelp can boost the likelihood of appearing in the ad section at the top of a relevant search, just like on Google.
It is also possible to pay to advertise on competitors’ Yelp pages. Depending on how much you pay for Yelp advertising, you can upgrade your Yelp profile with more features like video and call to action buttons, and even remove competitors’ ads from your Yelp page.
Yelp Accused of Bullying Small Businesses
Kaylie’s journey to creating Billion Dollar Bully began after a casual conversation with her doctor revealed some doubts about the credibility of Yelp’s review filtering system.
After going home and doing some research, she found that there were many business owners who claimed to have been negatively affected by this system, solely because they had refused to pay for advertising on Yelp.
Allegedly, Yelp salespeople would call these businesses non-stop attempting to sell advertising packages. When the businesses continued to refuse, they claim that their good reviews were filtered, leaving them with a lower star rating.
“I have over 2,000 patients, and every other week one of them writes a positive review on Yelp and none of them sticks… Businesses are at the mercy of Yelp!” Michael Abaian, Dentist.
A star rating on a website might not seem like a big deal, but don’t forget just how huge Yelp is in America. Small local businesses who can’t afford advertising rely heavily on the platform to bring in new customers. It’s almost impossible to remove your business from Yelp, so a bad reputation could destroy you.
Kaylie’s soon-to-be-released documentary on Yelp review manipulation has been in the making since 2015. It gives a voice to business owners who claim to have been extorted and bullied by Yelp salespeople, simply because they refused to advertise on the site.
So what does Yelp have to say about this?
Yelp has always stressed that their algorithm for filtering reviews is completely independent from their advertising. This means that according to Yelp, businesses who pay for Yelp advertising have no advantage over those who don’t pay, regarding which reviews are filtered or not.
The 2011 Harvard Business Study was a win for the online business marketing giant, as it investigated the effect of Yelp reviews on both reputation and revenue. As cited on their blog, the HBS found that there was no correlation between advertising on Yelp and having your business’ good or bad reviews filtered.
“neither 1- nor 5-star reviews were significantly more or less likely to be filtered for businesses that were advertising on Yelp.”
While forever staunchly defending their filtering algorithm, the company concede that it has its faults. Yelp media representative Vince Sollitto explains:
“Our job is to find and filter out fake reviews… Some legitimate content might get filtered and some illegitimate content might sneak through. We’re working hard at it.”
As for Kaylie’s upcoming documentary, representatives from Yelp appear not to be perturbed:
“There is no merit to the claims they appear to highlight, which have been repeatedly dismissed by courts of law, investigated by government regulators including the FTC and disproven by academic study.”
Should Local Businesses Pay to Advertise on Review Sites like Yelp?
There are two sides to every story, and for every Yelp hater that claims to have been extorted, I imagine there’s a successful small business screaming their praises—don’t quote me on that ratio!
Could these accusations of extortion and bullying be a complex misunderstanding caused by Yelp’s incredibly aggressive sales tactics? Is it possible that certain Yelp salespeople are so desperate for commission that they resort to abusing the system in order to sell advertising?
In the end it’s the business owners who should be making an informed decision as to whether or not Yelp advertising is right for their business. This decision should definitely not be made out of obligation or fear.
I suppose we’ll know more after watching the documentary and (perhaps more importantly) hearing Yelp’s response.
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