Yelp Expands Its Ad Targeting and Messaging Features for Small Businesses

Why it matters:

• More than five million local businesses have active Yelp pages.
• During the first three months of this year, 146,486 new businesses opened—up 4% from the same period in pre-pandemic 2019—and Yelp is seeing revenues hit record levels.
• Yelp is looking to fuel additional growth with tools that will attract more businesses to advertise on its platform.

Online review site Yelp looked at the small business landscape and decided its clients wanted more of two things: customization and control.

In response, it has rolled out upgrades that let business owners target their ads to specific geographic locations, reach a wider audience of potential customers, and more easily control their advertising budgets and Yelp pages.

In August the platform added a feature that lets consumers filter business by COVID-19 protocols. Businesses such as nightclubs and restaurants now can add, “All staff fully vaccinated” and “Proof of vaccination required” labels to their Yelp pages to help customers more easily search for businesses with those rules.

The new features are enhancements to the revamped Yelp for Business platform the company launched a year ago.

Amid a pandemic-shined spotlight on local merchants, Yelp’s courtship of small businesses echoes recent moves by sites from Facebook and Pinterest to Groupon and Google, which are all offering new tools and platforms designed to help entrepreneurs grow.

[Read here for the latest news on solutions and trends for small businesses.]

Yelp: Helping business owners reach ‘high-intent customers’

The pandemic hit Yelp hard, as small businesses stopped advertising or closed completely. It ended 2020 with a net loss of $19.4 million, down sharply from net income of $40 million for 2019.

Yelp cut the size of its local sales force in half and modernized its technology to let business owners self-manage their advertising accounts.

“We’ve been focused on giving business owners more control over their Yelp pages and ads, helping them reach and engage with the high-intent customers they want the most, all while giving then the ability to better measure the effectiveness of their advertising,” Alon Shiran, vice president of product at Yelp, told CO—.

“We’re seeing good ROI [return on investment] from these features and hearing positive feedback directly from our customers,” Shiran said.

Yelp now is forecasting strong growth in 2021, after seeing record earnings and its best growth in six year this spring as Americans returned to restaurants and hired service providers.

In April, the Yelp Economic Average, which tracks business activity, reported that 146,486 new businesses opened in the first three months of this year, up 4% from the pre-pandemic first quarter of 2019.

Consumers have contributed over 224 million reviews of restaurants, stores, plumbers, auto shops and other small businesses since San Francisco-based Yelp was founded in 2004. More than five million local businesses have active Yelp pages, and the company was averaging 503,000 monthly advertisers as of the first quarter of this year.

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New business features: From data on ad performance to ‘call-to-action’ buttons

The new features Yelp has added this year for businesses include:

• Custom location targeting: Yelp business clients previously could only target their ads to a specific radius around their business address. Now, they can identify geographic regions where they want to run ads, even if they are outside of that radius. This benefits service businesses that may find their best customers in neighborhoods well beyond their physical location.
• Connect audience model: This expands the Yelp Connect feature, which previously let businesses share information about themselves with consumers who followed the business on Yelp. Now, those businesses also can reach people who engaged with similar businesses on Yelp or searched for related business categories.
• Customizable call-to-action buttons: Businesses can customize the call-to-action, or contact, button on Yelp Connect with text specific to their business.
• Help with ad copy: Yelp will provide tailored examples of ad copy that can be customized, to help business owners craft compelling and effective ad copy.
• More control over ad budgets: Business owners can set the amount they want to spend per month and get machine-learning-generated budget recommendations based on past ad campaigns and audience data.
• A mobile dashboard for ad data: This gives business owners in-depth data on their mobile devices about how their Yelp ads are performing.

‘The leads are more relevant’

Response to the custom location targeting feature has been particularly enthusiastic, Shiran said.

After adding that feature to its ad platform, Yelp found that service providers were about 10% more likely to sign up for ads and, on average, spent more with Yelp, he said.

Businesses who self-service their Yelp accounts and that are leveraging the location targeting “are seeing a lower cost per click on their Yelp ads due to more relevant targeting, and we’ve seen a lift of more than 7% in self-serve, service-enable categories” as a result of the new feature, Shiran said.

David Ghahramany, owner of Art’s Heating and Cooling in Pleasanton, California, told Yelp that location targeting “has allowed me to focus on the areas that I want to work and want to advertise [in].”

“Within just a week of editing my targeted ad delivery, I’m seeing much more value from my ads on Yelp,” Ghahramany said. “The leads are more relevant and my time is spent connecting with customers that will generate revenue for my business,” he said.

The pandemic, Shiran said, showed how important it was for businesses to be able to communicate quickly with their customers. During lockdown periods, restaurants, stores and service providers needed to be able to easily inform customers about new operating methods like online takeout, curbside pickup and virtual consultations.

“Communication was and remains the most critical component for business owners in this time, especially as they were diversifying their revenue streams,” Shiran said.

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