We Give Yelp Advertising for Restaurants One Star

Yelp's advertising products for local businesses boast the ability to:

  1. Put up a slideshow of the images of your business, and include a short video
  2. Highlight a user’s review that you like the most (as the business owner)
  3. Promote your business as a sponsored search result and on your competitors’ business pages. Target potential clients while they are making decisions about where to spend their money on a business like yours

By paying as an advertiser, Yelp opens up a whole new set of features for you, including the ability to add unlimited photos to your Yelp account and a high-quality 60-second video produced by a professional videographer to be displayed on your listing. Your adverts are displayed on the listings of other related businesses in your area as well as in the search results when a potential customer is looking for a restaurant in your area. Your competitors’ adverts will also be removed from your listing, allowing you to keep the purchasing focus solely on your business.

Despite that sounding all fine and dandy, these features come at a premium price. Yelp's advertising structure works as such: 

  • $300/mo – promotes you to 1,500 people in your area looking for a business like yours.
  • $500/mo – promotes you to 4,000 people in your area looking for a business like yours.
  • $1000/mo – promotes you to 10,000 people in your area looking for a business like yours.

In essence, you are looking at $100 CPM (cost per thousand impressions) to $200 CPM to advertise on their network. Pricing at these rates is usually accompanied by in-depth campaign analytics, full control of your ads, and the ability to iterate ads rapidly; however, on Yelp none of that exists. 

Our Client

In our personal experience, we tested Yelp's advertising program with one of our fine dining clients (average ticket per head of $35) located in a tourist market. With the aid of Google Analytics, Yelp's horrible analytic dashboard (tracking calls, clicks, and maps cannot be compared month over month), and access to our client's sales for the past three years. 

Our client paid $425/month with a three-month minimum agreement, which is truly a four-month agreement because you must cancel a month prior to the next bill (We won't even get into Yelp's shady sales practices and agreement terms). Here are the stats, in six months time, Yelp drove 84 unique visitors to a custom landing page we designed to accompany Yelp's call-to-action. If you include all traffic referred to the client by Yelp during the span of the advertising campaign that number jumps to 226 unique visitors. From the 84 unique visitors that were attracted through Yelp's call-to-action four calls were placed from that page and one map engagement. This meant 84/9,000 = 1% conversion from visitor to Yelp to the website and once on the landing page 4% converted to customers. Thus, the cost of client acquisition that is trackable works out to be over $500 per client. That number does go down once you track the increase of calls to our client from Yelp, 56 clients called through Yelp compared to 42 a year prior with no advertising. Meaning 14 more leads were generated, costing our client $134.21 per diner acquisition. Insane! Yelp's argument would be that this will be a lifetime customer; however, in tourist markets this is not true. 

Restaurants are not the only type of local businesses with Yelp pages. Yelp has listings for lawyers, doctors, designers, florist, etc. and for a lifetime client in those industries Yelp might be worth it; however, in the restaurant industry it is certainly not. We advise our clients to stay far away from paid advertising on Yelp due to the inability to properly track campaign performance, immense cost, having no control over ad displays, long-term contracts, high leakage, and sketchy sales and term agreements.