According to a press release I received this morning:
The processes Angie’s List relies on to provide reliable, fair and accurate consumer ratings on local companies have been certified by BPA Worldwide, an international, independent auditing firm.
Angie’s List, the nation’s leading provider of consumer ratings, was last reviewed by BPA in 2007, earning high marks for fairness. The current audit covered the company’s activities through February 23, 2009.
“In our opinion, the Angieslist.com service follows a consistent, documented set of techniques and processes to present fairly, in all material respects, the ratings and input of the site’s members,” BPA said in its letter apprising Angie’s List of its findings.
“Our audit included examination of member feedback for service providers that advertise with Angie’s List and service providers that do not advertise with Angie’s List. We found no variation in processing member feedback for all service providers,” the auditor said.
AngiesList reports 750K members. That’s a fraction of the 25+ million users on Yelp or Citysearch. But AngieList doesn’t have to sell ads to SMBs (there is some advetising in the printed magazine). Fees vary by market but in my area they’re $6.95 per month. Assuming members pay an average of $5 per month, that would mean roughly $45M in annual revenues. It’s likely lower than that because of discounts and other factors. But that’s still very healthy revenue.
Angie also writes a blog. What about Twitter? 
Reviews have become increasingly important, both in terms of consumer reliance upon them for decision support but also as Google starts to factor in this information as part of its organic local ranking algorithm.
April 9, 2009 at 12:44 am |
In addition to subscription fee revenues, Angie’s List also generates revenue from businesses who pay for things like ads in the member magazine, page of honor nominations, the rights to display Super Service Awards, and for the premium placement in their lists (which requires businesses to offer members an special offer). Though these revenues are not as significant as those generated by the member fees, they are probably not insignificant. On the whole, I think your estimate sounds about right +/- 10%.
April 9, 2009 at 12:20 pm |
thanks Rob. At a time like this the subscription model, which seemed maybe foolish in the past, now looks much more attractive.
April 9, 2009 at 5:20 pm |
I agree. Although, frankly, I don’t really get why their members are willing to pay for access to reviews on Angie’s List. Personally, I don’t see a stark difference in the quality of reviews that I read on Angie’s List and those of other free review sites. Angie’s List doesn’t seem to have an substantial advantage in terms of quantity of reviews either. I must be missing something.
April 9, 2009 at 5:32 pm |
Angies List is like consumer reports in a way; it’s been doing this longer than anybody else and has acclimated people to the idea of paying for the service although there are ready alternatives.
April 10, 2009 at 5:30 pm |
I’ll be surprised if Angie’s List is still a subscription business in a couple of years. I think it’s harder to run a “consumer report type” business with so many strong local sites — yelp, citysearch, kudzu etc etc …
April 14, 2009 at 2:33 pm |
The issue I see with Angies List is that customer not only pay to read reviews, but they pay to write them as well. So if I have a bad experience with a contractor or home improvement specialist, and want to let the world know, I’m not going to dole out money to just speak my mind. It skews the content in a particular direction. We’ve talked to contractors who will actually pay for their customers’ Angie’s list account, just so they can get the review. Sites like ours, at HomeStars.com are free both to users as well as reviewers. Our model is similar to Yelp, and we, of course, feel the pressure from the advertisers, but it only takes a little explanation to let them know that by altering or removing reviews devalues the site, and they won’t benefit from their listing anyway.
April 27, 2009 at 6:21 am |
One defect with Angie’s list, is layman judging professionals. There could be plenty of homeowners giving great reviews to companies that don’t deserve it.
Let me take lawn care for example.
Maybe a company keeps a lawn really green looking and weed free for a year – so the homeowner gives sterling remarks about this lawn service.
What the homeowner may not know, is that herbicides were applied double rate, and although the grass looks great, the trees in the lawn are starting to have problems they did not detect. Also, ryegrass needs 8 lbs. of Nitrogen per 1000 square feet per year, but fine fescue only needs 2 lbs. of Nitrogen per 1000 square feet per year.
Suppose the lawn service is applying the same rate of fertilizer to both species of grass on a big lot, both grasses may look wonderfully green, but the fine fescue may be building excess thatch which the homeowner has no idea about.
And yes – this happens. And because of a dozen real scenerios like this, I hardly put a grain of salt of confidence in online reviews similar to Angie’s list.
And ask yourself, how do you really know if someone’s opinion is bogus or not, if they don’t post a copy of the contract for readers to review?
April 27, 2009 at 1:19 pm |
There are always problems with the user-review scenario. However a consensus of reviewers (beyond one or two negative or favorable reviews) is likely to be accurate.
April 27, 2009 at 1:22 pm |
That’s what we see on our site. 1 or 2 reviews means the company has done a decent job before, 10-15 reviews means the company cares and looks after their customers. Yes, consumers will be wrong sometimes. But it is also up to the companies to really explain the product to their customers. In the end the satisfaction is with the customer.
July 6, 2009 at 1:02 am |
The “consensus” you mention, is the likely strength in the online review process. At least customers can be experts about what they consdier good customer service to be.
A paid membership into a review site is an advancement over free review options. I’ve seen anonymous people on – say – Yahoo, post an identical, verbatim, negative review against half a dozen companies which they had not employed at any time. In a framework like Angie’s List, that is highly unlikely.
July 6, 2009 at 1:50 pm |
We’re pretty careful at HomeStars only to post reviews where a job was performed – or at least we try. About 75-80% of the reviews we post on HomeStars are for companies that have registered and are aware of the company, and they will tell us whether the job was or was not performed. We are also pretty good at catching duplicate content and removing it. It’s not good for us, nor for the readers, nor for the companies.