Business Owner Resentment a Persistent Problem for Yelp

Yelp logoBy almost all measures Yelp is doing very well. Yet it has a major and continuing problem: business owner resentment.

Theories that Yelp manipulates reviews to reward or punish SMBs on the basis of whether they advertise doggedly persist — even among sophisticated digital marketers. I continue to see people push these ideas in email and online forums. I was also forwarded a crazy prediction that Yelp would be “gone” in 24 months.

Despite the indignation of a number of people I’ve encountered and who think I’m blind, I’ve not seen any clear evidence that Yelp is manipulating reviews. Indeed, class action lawyers were unsuccessful making this case in court. However it’s a rumor that won’t die, not unlike the “birther” theories of President Obama’s birthplace and religion.

Neal Polachek pointed me to an article in the LA Times that covered a recent Yelp “town hall” in LA. It began as a meeting to promote Yelp to local businesses and allow them to ask questions. It turned into a therapy session for SMBs who wanted to vent their frustration at the site for various reasons, including its controversial review filter:

But the glowing comments from the panel didn’t sit well with the audience, and when the town hall opened up for Q&A an hour and a half later, business owners were quick to vent their frustrations.

Many slammed the company for allowing review posters to write inflammatory comments — one restaurant manager said she cried for three days after a Yelper said her restaurant was filled with Nazis, another said he’d received negative reviews from Yelpers who admitted they’d never tried the food — while others said they had been subjected to aggressive advertising calls from Yelp.

I was not in attendance but the article conveyed frustration, confusion and resentment that many business owners feel toward Yelp. It’s not clear what Yelp can do — beyond much more outreach — to address this. There are some “structural” tensions at the core of Yelp’s business and as long as Yelp relies heavily on conventional advertising as a business model (and it will) those issues will remain.

Yelp has aggressively sought to dispel any notion that its review filter and ad sales are in any way connected. But it can’t seem to get beyond this idea with some business owners. They may not be a majority but they are a vocal minority.

Right now business owners in major US cities cannot ignore Yelp and there’s really no equally powerful competitor — not even Google when it comes to local reviews. But the resentment that many business owners feel toward Yelp is like a tumor that must be addressed or it will continue to grow.

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23 Responses to “Business Owner Resentment a Persistent Problem for Yelp”

  1. Andrew Goodman says at

    I can think of another company that for years, was the subject of business owner suspicion related to allegedly pulling various tricks “to force people to advertise.”

    You still hear those complaints and allegations today, actually.

    It’s not surprising. It’s actually very difficult to come up with algorithms that can enforce rules of relevance, quality, non-spam, verity, etc.

    And of course, every company would love to think that reputation is something they can totally control, and that the online services are there to do their bidding at absolutely zero cost.

    The other company’s name is Google. It’s still going strong. It’s worth $290 billion.

    As a good friend of mine told a UK business owner who was thinking of suing Google for some “unfair” drop in search rankings… “what you should actually do is go over to the Googleplex, pucker up, and plant a big smooch right on Larry Page’s butt for the millions of dollars in free business that your organic listings have driven up to this point.”

    Individual business owners with (occasionally justified, usually selfish) complaints aren’t going to bring down a large publisher like Yelp, any more than they can bring down Google.

  2. Greg Sterling says at

    Agree that Yelp won’t be “brought down” but I think it’s a problem that Yelp must take seriously and address.

  3. Andrew Goodman says at


    In some sense, I think the false positives on untrustworthy reviews (etc.) will diminish with time as this is a true big data play and their algorithms are learning.

    Also, reviewers have to get better at building more trustworthy profiles, which I expect will happen with time.

    Review sites are going to justifiably take these “instant profile, 1-2 review” folks’ content with a grain of salt. “Real reviewers with real profiles” will have their content greenlighted. It’s amazingly easy for the algorithms to figure out who is a genuinely valued member of the community… and it’s just hard enough to fake that, that few phony reviewers go to the trouble to build up that level of authenticity. No one asks that a reviewer be perfect or share your interests… just that reviews not be fake or biased via business owner control.

  4. Greg Sterling says at

    To the extent that Yahoo needs to cultivate the good will of SMBs to get them to advertise I think it has to continue to do outreach and education (which it’s doing) and address these frustrations. You’re saying the algo will get better over time. Perhaps but now there’s a reputation and perception problem (however false) to overcome. 

  5. Andrew Goodman says at

    This is basically the exact same type of complaining we’ve seen when business owners feel maligned on Angie’s List or TripAdvisor.

    TripAdvisor seems to have won over quite a few hearts and minds and is gaining momentum in Yelp’s space, in part because of the friendly outreach to which you refer. They have more kits & collateral & such to help business owners benefit from their online presence… but the flip side of this… is that solicited reviews and some of the friendly interaction between the review site and the businesses, may not produce as accurate a result. Yelp is taking a hard line on “solicited reviews,” even, because they believe that is the best way to help the consumer. It might be wise for them to soften stances such as this to at least tip the cap to the notion that it is indeed business owners who pay Yelp’s bills.

    Google has rarely done so, though. It’s worth pointing that out.

  6. Greg Sterling says at

    Agree that Yelp should soften somewhat and do much more education about what’s permissible — even up to best practices for getting reviews from your customers. 

  7. Marketing Day: August 22, 2013 says at

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  8. Randy Parker says at

    Greg nailed it. Nearly every SMB I speak with would say it’s relationship status with Yelp is “complicated.” They love the idea of public praise, but they hate it when one entitled grump gets published and ten of their loyals fans go into purgatory. And the incessant selling from Yelp reps is an issue too.

    I see Yelp’s challenges as:
    1. Demonstrate ROI for paid Yelp services (ads) above free service
    2. Make Yelp review distribution better match the experience shown by regular people not the Yelposcenti. If my bakery pleases 95 of 100 customers each and every day, it is frustrating when I get two reviews, one good, one bad. Yelp can get disrupted by a company that makes it really easy for authentic ratings to potentially be left by every customer.

  9. Greg Sterling says at

    Yelp is trying to show ROI. And I also think that disruption is possible, though it will not come easily to another publisher.

  10. Andrew Goodman says at

    But Randy, from a consumer standpoint think of the flip side of that argument. It is only a “trifling thing” to consumers in this space because — let’s face it — a taco isn’t all that important in the grand scheme of things. So if a bunch of solicited reviews mean you try out the taco place and it turns out that the minority of complainers had it right, you’re out $12 and one hour.

    In other spaces, the proliferation of solicited reviews can help companies so much that it harms the consumer.

    Think of the home energy services companies that get big enough that they have hundreds of thousands or millions of customers. Let’s say 25% of customers — after 5-10 years of paying ridiculous costs to rent a water heater — run up against a nasty $1,500 fee to break their contract, essentially being held hostage by a company with business practices that most of us would find shocking and borderline illegal for something so commodity as a water heater.

    Such a company should be rated very poorly! But often, they are not. Big companies solicit positive reviews, and they can get positive reviews from one division or from early “suck them in” business practices, that far outweigh the dissatisfaction that occurs on the back end.

    So over the years, that HVAC/water-heater-etc. company has flooded the review space with so many solicited reviews, most new customers would see it as a top rated company.

    That is a challenge for review sites in that space. Consumers have trouble finding accurate information.

    Because of Yelp’s financial strength due to their IPO, and their savvy in walking the same tightrope as Google *for consumer, not corporate advertiser* benefit, they actually have the wherewithal to push harder for more challenging consumer-friendly standards.

    A review service (or search engine) that bends to the whims of the company owners has less staying power, and will eventually be shunned by consumers.

    That’s the paradox. They don’t work for business owners. They work for consumers. Same as Google. And as a result they create a platform that remains monetizable, regardless of business owner opinion.

    “It is better to be feared than loved.”

  11. AJ Kohn says at

    I think most SMBs think of Yelp as a ‘necessary evil’ now, as they used to think of the Yellow Pages. 

    Now, that’s all well and good as long as there isn’t a strong competitor around but if there is, there’s not going to be any loyalty and the number of SMBs who will ditch Yelp would be high and fast.

    Compounding this, IMO, is that Yelp has done little to innovate for consumers and I find Yelp diminishing in value. The number of times the reviews haven’t matched reality have increased to the point that I don’t really trust Yelp. 

    I need to know how people like me feel about these places (hey there Facebook Graph Search) or to look at the most recent review trends as opposed to a total aggregate over … how many years?

    Personally, I think there’s a real opportunity for someone to take reviews to the next level. Foursquare is getting close, but I think you might see a newcomer in the next few years. It might not succeed, but perhaps it’ll push Yelp to innovate again and better serve customers and SMBs.

  12. Nick says at

    I stopped using Yelp when my own reviews of other establishments were being “filtered” (in other words buried and never seen by other users). If my reviews are going to be filtered, then so are other legit reviews.  Ruined the credibility for me. Deleted Yelp account and never looked back. 

  13. Greg says at

    @Nick: Do you have an alternative, preferred review site now? 

  14. Andrew Goodman says at

    @Nick, didn’t you say “my own reviews of other establishments”?

    What do you mean “other”? That implies that Yelp is aware that you’re a business owner, and is also aware that you have written potentially biased reviews of competing establishments.

    Notice, if a true consumer like myself were to have written the above sentence, I would have simply said “my reviews of businesses” or “my legitimate reviews of restaurants.” Instead, you say “my OWN” reviews of “OTHER establishments.”

    In many cases where Yelp is accused of some kind of wrongdoing or inaccuracy, there is something more to the story.

    Since Yelp has such a wealth of reviews, it can afford to show the ones that have the most chance of being legitimate consumer opinions. Filtering reviews is going to be an imperfect science, but highly trusted users with a track record of legitimate activity will very rarely have anything filtered. And even when filtered, a savvy customer can go ahead and read the fitered reviews if they know where to click.

    Usually when I see a filtered review I see something tersely written, by someone with a very limited track record. Often it is clear that there is an agenda to pump up either the positive or negative numbers on a particular business. Sometimes I do see a filtered review where it’s obvious that it’s probably legitimate. I would like to see Yelp do more to have a reporting system where trusted, quality reviewers would send in their “Hey, this isn’t spam” report. That way, the algorithms can be refined even more.

    Big data is doing a lot for us. If you don’t believe that, just check out Yahoo Mail, Hotmail, etc. five years ago (or even now) compared with the relatively intelligent and accurate filtering we see in GMail today.

    That’s all it is, really. Yelp is basically just trying to perfect a spam filter. People are making it out to be more controversial than it is.

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  16. Randy Parker says at

    @Andrew:  Oh, it’s clear who Yelp works for.  However, if your monetization comes from parties who feel that you are screwing them, well, that’s not a recipe for long-term success, whether you are loved or feared — or both :-).

    Imagine if Passbook on my iPhone popped up an Uber-like one-to-five star rating panel as I walked out of any retail establishment at which I had just purchased with a supported payment mechanism.   Verified (like Amazon reviews can be), quick, fresh, and much larger sampling.   Isn’t that a better Yelp, at least for small retail businesses (my field of interest)?

    Your analogy with “spam filters” is interesting.  However, don’t forget that poorly-performing (false positives and false negatives) spam filters are worse than no filter.   Remember the spam filtering we had before Gmail showed the world how to make it work?

    And the Google comparison is apt but falls down in that Google’s primary function (fast, relevant search results) continues undiminished, but there are more and more examples (especially in the VSB long tail) where Yelp reviews fail in their primary function (fast, relevant, unskewed reviews).    It’s not just a spam filtering problem (e.g., fixed by Google tweaking index) but it’s a fundamental “show me more people like me who actually have something relevant to say about this business”.   FB’s social graph, as well as a payment graph, are paths to disrupting this.

  17. Andrew Goodman says at

    Actually, the parallels with Google are not all that far off.

    Consider Google’s challenges in presenting valuable content where there really isn’t yet any (or much), on long tail queries for which little or no content matches — i.e. perhaps 25% of daily search queries. In these situations, there is little Google can do to improve on the fact that there is little raw material to work with. Either they can allow opportunistic but low quality content to be viewed by users (because technically the most relevant to the actual query), or they can favor “trusted” websites and rank them higher even on queries for which the article or home page in question has limited direct relevance to the case.

    Yelp, and others like them, begin from Ground Zero in terms of the availability of quality reviews. They have to get it from somewhere. And much like Google SERP’s, there will always be knock-down, drag out debates about what is a quality piece of content — what should be filtered or penalized, and what should not.

    The difference with Yelp’s challenge is no so much in the vast and nearly infinite volume of information that Google needs to try to organize, but the opposite: for many listed businesses, all too little good quality content, and thus the recurring problem of businesses whose current list of reviews is dominated either by one-off “solicited” (biased in favor) reviews or competitor “bashing style” reviews (also biased, but against). Yelp has too few reviews to work with that come from trusted reviewers.

    There is a perception that the “Elite” reviewers have tastes and preferences different from the average user of the service, but I would argue that leaning so heavily on such reviewers is — again — a non-optimal but “still better than spam” solution. Heavy use of such reviewers is a way of seeding the service so that it attracts attention and begins to grow. When it grows, it becomes more useful.

    Are people having the same issues with TripAdvisor currently? Why the hate-on for Yelp specifically?

  18. Greg Sterling says at

    I find Yelp to be an extremely useful service as a consumer-user. I think TripAdvisor inspires or used to inspire similar awe/loathing in the hospitality industry. However most hotel management has simply recognized the reality of TA and is adapting or has adapted. That’s what is happening or will happen in the SMB space with Yelp. However SMBs are more emotional about the whole thing in many instances. There’s also confusion about “how to work the system” and collect reviews/positive reviews. 

  19. Mike Falconer says at

    The problem is one of bias. 

    Yelp will filter a positive reviews without a second though and there is nothing the user or business can do about it. With a negative review, it has to actively violate Yelp’s TOS for them to do anything about it. 

    Yelp refuses to engage on the subject, or about individual reviews ( where as Google will); however, it loves to make cold advertising calls.

    Is it any wonder people are frustrated?

  20. Mack says at

    Business owner here.  Seven reviews are good ones but have all been filtered out.  One bad review is not a customer of mine.  One three star review is allowed.  Why?  If I advertise with them I’m sure the good reviews would magically appear.  

  21. Andrew Goodman says at

    Why not post your real business name so all of us could assess your claim by going to the Yelp site?

  22. L.S. says at

    I just started Yelp and I like using it to review my favorite & not as favorite restaurants. One of my favorite car dealerships has upwards of 45 filtered reviews, and only 3 unfiltered – the 3 unfiltered are not very accurate as are more than 1-2 years old. It just doesn’t make sense. 
    If this is an indicator of what Yelp is like then, I really don’t want to be a part of it. I thought it was an honest way to get information, but this doesn’t appear to be true.
    At the end of the day I just want a fair place where people can share their opinions, openly and honestly – this does not appear to be happening. 
    Here is the link below:

    What is your opinion of what is happening here? After seeing this I just do not feel like their “algorithms” are a fair assessment of who are & are not legitimate reviewers.

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  26. Andrew Delville says at

    The inherent problem with these review sites is that they make user registration too easy.  With a cell phone verification they would be able to lessen the load ala Google’s postcard verification or Facebook’s cell phone verification.  These security checks make it harder to game the system and that is why Google and Facebook are doing so well to reduce spam and fraud.

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  29. Jeremiah says at

    We are former advertisers on Yelp. While we advertised (6 months), none of the reviews – positive or negative were filtered. We recently gave notice to Yelp that we were going to stop advertising. Just prior to the termination of the contract, we noticed that 3 of our 5 star reviews were moved to the non-recommended section by the Yelp filter. In one case it is a review with the reviewer’s photo, 1 friend and 7 other reviews. In another it was from a woman I personally talked help resolve her issue. She was pleased with our response and gave us a favorable review. The third I don’t know about one way or another, other than to say I know it’s not a fake review posted by me or anyone associated with our restaurant. I know also that it is not a solicited review. We don’t solicit. Of interest on this third review is that the reviewer has only 1 review, no photo and no friends… back to that in a moment…

    All of these were filtered only after we made it clear we were not going to continue advertising. Yelp repeats the party line that there is no connection, and of course there is no proof available to me that this is not just a coincidence – but it is interesting that for months and months nothing changes and then all of the sudden their filter decides we have 3 bad (positive) reviews.

    And now back to that third positive review… 1 review only, no photo and no friends… very few words…

    This weekend we got a 1 star review. It’s real. The person is really REALLY angry because they believe we intentionally mislead them regarding a promo and a payment option. They are wrong – we didn’t mislead them and I fully explained the situation in my reply – but that is somewhat irrelevant. This negative review – which is every bit as valid as the 3 positive reviews which have been filtered shares the same characteristics as that 3rd positive review I just described. 1 review only… no photo… no friends on Yelp… very few words and yet there it sits – ignored by the Yelp filter. There is also a 2nd negative review… (2 stars) which has the same characteristics. It’s been there for quite some time and yet the filter left it in place.

    This example clearly illustrates the primary issue many business owners have with Yelp. We are the other half of their business and yet the clear and obvious bias toward negative reviews forces business owners into an adversarial relationship with them. Yelp doesn’t appear to care about this and I suspect it will continue to be the case as long as there are business owners who continue to pay for advertising. I’m hopeful it will not always be this way. What goes around comes around and I believe Yelp will begin to feel the backlash as more and more businesses realize the futility of feeding a monster that bites them in between meals.

  30. Gwen W says at

    This is very informative. Thank you.

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