Are Yelp Ads Worth It?

*UPDATE March 2019*

Over the years Yelp has continued to be a staple in the way many web searchers look for serviced based needs. A few things have changed, however.

Firstly, the way users find Yelp has changed. At the time this article was written, most people that were on Yelp had already done a fair amount of research before deciding to turn to Yelp when they were ready to make a decision. Now, Yelp listings are consistently showing up on the first page of related Google search results. This means Yelp is able to get traffic right from the beginning of the inquiry, not only relying on the user to come to the site when they decide they are ready.

Updated Rates:

$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.

Though Yelp does seem like an appealing place to advertise, many people have shared unsettling stories about their experience with Yelp. Perhaps the most common complaint reported has been business owners having a significant amount of 5 star reviews removed from their business pages after ending their paid membership and returning to the free listing. Or worse yet, even having good reviews removed after refusing to upgrade to the paid membership at all almost as if it were a punishment. This has caused many business owners to lean away from advertising with Yelp. The company recently announced that it was struggling to retain advertisers and has in return seen significant drops in stock value over the course of the last 2 quarters.

MAIN ARTICLE:

It depends.

Whether or not to pay for Yelp ads is a question we are frequently asked by clients. Truth is, deciding whether to fork over the high prices for Yelp advertising depends on a variety of factors – the main factor being: what is your ROI per customer acquisition.

Let’s take a look at the reason people use Yelp

In general, web searchers find their way to Yelp after they’ve already done a significant amount of preliminary research on the service they need.

Of course, how much a “significant amount” actually is varies based on the service they are looking for, i.e. one spends less time researching thai food before choosing a restaurant than someone does shopping around for a mortgage lender.

The bottom line is that people searching on Yelp know what they want, but are looking for more information on WHO to buy it from. They are a warm market, and are open to advertising. This is one of the reasons why, at Design SEO Hosting, we always push our clients to obtain positive Yelp reviews (but that’s a whole other post entirely).

Let’s look at how much advertising on Yelp costs

Because Yelp does not publish their ad rates or even make them known unless you contact them directly as a business interested in advertising, be forewarned that these numbers are subject to change/speculation.

Estimated Yelp Advertising Rates:

Annual Commitment (Billed Monthly)
$350 – 600 targeted ads/month & cost of the Video Production
$300 – 600 targeted ads/month & slideshow
$550 – 1500 targeted ads/month
$800 – 2575 targeted ads/month
$1050 – 3600 targeted ads/month

6 Month Commitment
$400 – 600 targeted ads/month & 2/3 of video production with 1 time fee of $299
$325 – 600 targeted ads/month & slideshow

CPC Advertising (Paid Per Click)

Click advertising = $3.50 per click

Customers can pay Yelp can have competitor ads removed – unsure of the cost for this service

Can you afford to advertise on Yelp?

For many small businesses, those advertising rates are simply out of their budget. And frankly, it doesn’t make sense to even consider it unless your ROI is above a certain threshold.

For example:

Let’s say you are a yoga studio. You pay $800 to have 2575 targeted ads shown per month through Yelp. A normal click through rate for advertising is between 1-2%, so we’ll be generous go with 2%.

For that month you will have 52 people that click through to your page. Let’s be generous again and say that of those 52 people, 2% of them convert. That means 1 person that saw your ad and clicked through actually became a paying customer. Therefore, you just paid $800 for that customer; i.e. an $800 cost per acquisition. This makes no sense for a yoga studio. Even if that student purchased a monthly unlimited membership (average price $150), and they continued that monthly membership month after month, it would not be until the 6th month that you received a return on your investment for that customer.

Who are Yelp ads good for?

Referring back to the example above, advertising on Yelp does make sense for a certain segment of businesses – those that can afford to and find value in a high cost of acquisition.

If you’re a lawyer, doctor, real estate agent, broker, lender, dentist, chiropractor or other service provider, Yelp ads may be worth your while.