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Yelp Paid Ads: Sound Investment or Rip-Off?

Posted On: June 22, 2013

As we noted earlier, Yelp can be a huge boon to your local business. If you don’t have a listing on Yelp, you’re missing out on a key opportunity to promote your business and leverage the power of customer reviews.

Taping letters from happy customers to your wall only communicates your great customer service to people inside your front door — and they’re already your clientele. Having those great reviews posted on your Yelp page gets the word out to everyone.

However, the picture has become muddied recently by Yelp’s foray into paid advertising. Yelp is promoting this new initiative as a way to trump your competitors by giving your Yelp page better visibility. Sounds great, right? In reality, many marketing experts are suggesting that Yelp’s paid ads currently cost far more than what you receive in return.

The numbers can get a little confusing if you’re not familiar with cost per impressions, which is the model Yelp is using for the ads. Much like traditional advertising, an impression merely means that someone has seen your ad. You’re paying for the ad regardless of whether or not someone clicks through to your site. Cost-per-click, by comparison, only costs you money if someone clicks through.

With Yelp ads, the cost per impression (CPM) is exponentially more expensive than it is with standard CPM advertising. It’s also much harder to track how effective your advertising is when you can’t get click-through numbers. Yelp is also requiring a one-year commitment for its most favorable rates, which aren’t particularly low in the first place.

When you add it up, it doesn’t make a lot of sense to pay for Yelp advertising at this time, though that might change if the platform makes some changes to its business model (and its pricing) in the future. If it’s something that interests you, let us know. We’ll help you weigh the pros and cons of investing in Yelp paid ads.

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