The Long Knives Out for Yelp

picture-34The Yelp narrative used to be: what makes Yelp so compelling to users and why has it succeeded where others failed? The new one is starting to become: Is Yelp is doing anything unethical with reviews and advertising sales? A piece in a local SF Bay Area publication takes up and runs with the latter idea with a very heavy handed article: Yelp and the Business of Extortion 2.0.

You don’t have to read anything other than this bit to “get” the article:

During interviews with dozens of business owners over a span of several months, six people told this newspaper that Yelp sales representatives promised to move or remove negative reviews if their business would advertise. In another six instances, positive reviews disappeared — or negative ones appeared — after owners declined to advertise.

Because they were often asked to advertise soon after receiving negative reviews, many of these business owners believe Yelp employees use such reviews as sales leads. Several, including John, even suspect Yelp employees of writing them. Indeed, Yelp does pay some employees to write reviews of businesses that are solicited for advertising. And in at least one documented instance, a business owner who refused to advertise subsequently received a negative review from a Yelp employee.

I was supposed to talk to this reporter but didn’t respond to her (honestly I forgot).

Yelp has become successful and powerful and many local business owners are confused and concerned about how or why this or that review shows up or doesn’t show up. There’s now a lot of what I would call “magical thinking” going on about the site. The excerpt above reflects some of that.

As Yelp has grown it’s no longer that interesting to write about the site’s successes in generating reviews or user engagement. Now people are writing exposés revealing deception or manipulation. This is what happened to Google as well: cool startup turned bully, monopolist, etc.

What’s very clear is that the paragraphs above are not accurate. But within the article there are some accurate details:

  • Yelp has paid freelancers to write reviews in new markets
  • Yelp employees are permitted to write reviews on the site
  • Yelp does offer advertisers the ability to highlight positive reviews

Does it punish SMBs who decline to advertise by sending out employees to write negative reviews? (as implied by the piece) — clearly not. I’m sure Yelp has a formula for sales prospecting that looks at reviews. I’m not on any sales calls so I don’t know what’s said or represented, however.

I do know there’s lots of confusion on the part of business owners and that they need some additional help and education. And Yelp needs to get out in front of these stories by reaching out to businesses in a more direct way to clarify policies, etc.

This negative coverage is part of the price of success. But the coverage can start to harm Yelp if it fails to address some of the misperceptions or correct policies that are giving rise to misperceptions.

___

Here’s CEO Jeremy Stoppelman’s response to the article.

22 Responses to “The Long Knives Out for Yelp”

  1. Chris Silver Smith Says:

    A seemingly chronic problem with directory companies which sell advertising is that some sales reps may promise services not available or misrepresent policies. For anyone who has experienced such a thing, it would make the story appear to perhaps have foundation.

    I find it very hard to believe that the company has any sort of predatorial internal policies like those described, nor that they’ve been all that negligent at internal policing. Unless there’s more proof of willful negligence or institutional policies like that, it seems unfounded to blame the company for what might be bad behavior of one or two employees.

    I can find it pretty easy to believe that some sales reps might fly against internal rules and policies and be overly aggressive at trying to meet/exceed quotas. If Yelp found an employee doing such a thing, I’m sure the employee would be let go.

  2. Greg Sterling Says:

    Agree

  3. David Mihm Says:

    Great comment, Chris. It certainly seems to be some mis-guided, unnecessarily predatory sales representation rather than a company ethos…Yelp has consistently, from day one, been all about community-building–a huge differentiator for them in the race with the SE’s–and this report obviously flies in the face of that.

  4. Peter Says:

    i agree completely with your assessment. like you, i don’t look at the evidence – i just made pronouncements.

  5. Stever Says:

    With some well publicized examples of those kinds of practices in that sector, a certain Circular Merchant comes to mind, it may paint a broad sentiment that filters up to the market leader, deserved or un-deserved.

  6. AhmedF Says:

    Kinda of on a tangent, but using ‘mis-guided’ or ‘inaccurately informed’ to explain away aggressive/incorrect sales behavior is simply not acceptable. As a company, you have to take responsibility for what people representing your company say – regardless if they are employed or outsourced.

    It is the company’s responsibility to ensure such behavior does not happen. And if they allow it to continue to happen (regardless of intentionally or not), then they are essentially allowing such behavior.

    Kind of similar to what MC does – they mass-call about phantom reviews, get complaints, apologize for their ‘overly aggressive’ calls (in what world does blatant lying equate to aggressive), say we did not mean to do it, and then rinse-repeat a month later.

    If sales people were promising the moon, it was Yelp’s job to make sure not only that the sales people were corrected, but so were the business people they contacted.

    With all that said and done – I am on Yelp’s side here. The underlying tone of the article makes it quite apparent they were out to get Yelp.

  7. The Praized Blog » Blog Archive » Yelp’s Monetization Strategy Says:

    […] Big fracas in the local social media space today with the publication of a long anti-Yelp article, “Yelp and the Business of Extortion 2.0″, in the East Bay Express. Jeremy Stoppelman, Yelp’s CEO, has many issue with the article and answers on the company blog. You can read Greg Sterling’s analysis on the whole situation here. […]

  8. MiriamEllis Says:

    “Does it punish SMBs who decline to advertise by sending out employees to write negative reviews? (as implied by the piece) — clearly not.”

    Greg,
    I get the feeling that you know this for sure, but your article doesn’t really explain how. I would be interested to know the reason you are certain that Yelp wouldn’t do this.

    Miriam

  9. Yelp | Bronte Media Says:

    […] More context from Greg Sterling. […]

  10. Greg Sterling Says:

    Miriam:

    All of my contacts with personnel at Yelp argue otherwise. Think about that suggestion: fraudulent reviews to punish those who decline to advertise. That would be an extreme violation of ethics and Yelp’s own policies.

    The site, had it a practice of doing so, wouldn’t be able to survive, given how egregious that behavior would be.

    But true I’m not an insider

  11. Yelp gets accused of extortion and blackmail- Is Yelp unethical? | Techmeme@MyRecap Says:

    […] view about the article by The East Bay Express, the author Greg Sterling from Screenwreck hit upon an accurate set of details which he shares with others in his post. He says that within […]

  12. Julie Gallaher Says:

    My main problem with Yelp is the voting up or down of reviews – The snarky, witty, sassy reviews are most popular within the Yelp culture, and snarky reviews are almost never positive. Unless your business is hip and cool, the likelihood is that the negative reviews will be highlighted. And if your business is popular, the in crowd wants to take you down a peg.

  13. MiriamEllis Says:

    Hi Greg,
    Thanks for clarifying that. I wasn’t sure if you were saying, “I know this because X” or, “I’m confident that this business wouldn’t do something so unethical.” Good to have the clear.

    Miriam

  14. troy Says:

    I don’t think any company would be stupid enough to formalize a unethical behavior but it can imply it. Look at the mortgage companies, I’m sure they did not tell their brokers to lie and cheat but the nudge nudge and wink wink were unmistakeable.

  15. zippy Says:

    It’s not just in the East Bay that Yelp has been accused of blackmail. A whole bunch of businesses in the North Bay (Santa Rosa and Sonoma County) have been saying exactly the same thing in the SR Press-Democrat.

    http://www.pressdemocrat.com/article/20081117/NEWS/811170304/1036/NEWS07?Title=A_problem_with_pitch

    Why do you think that Yelp cannot possibly be doing this? Don’t be naive. Yelp is now under real pressure to show they can make MONEY. The only place in the US that they have ANY hope of doing that is in their biggest market, the Bay Area. And because the Bay Area is a hotbed for every online advertising start-up, every local businesses gets bombarded by commission-only sales reps from Verizon to Reach Local and Merchant Circle to sites you’ve never heard of. Yelp has to do something–because i it’s becoming “uncool” to post reviews on Yelp. Yelp is so “last year.” Every bozo and his mother now knows about yelp. That’s the kiss of death for a hipster-focussed site like Yelp. Next!

  16. Yelp sur le banc des accusés pour corruption et chantage | Techmeme@MyRecap Says:

    […] à l’article de The East Bay Express, Greg Sterling du Screenwreck a relevé certains détails précis que d’autres blogueurs […]

  17. Chris Says:

    If you do a google search for “yelp unethical”, you get 11,900 hits. I assume this number will grow by leaps and bounds. They’re finally rectifying some of their unethical actions, (for example, they are showing bad reviews of sponsors now if a reviewer has a minimum number of friends, but still not showing bad reviews of sponsors for those less well connected reviewers). Hopefully for them it’s not too little, too late. I certainly will never trust their reviews again.

  18. The Trouble With Online Directories… « Seobylars’s Blog Says:

    […] Other articles, like this piece in the New York Times: The Review Site Yelp Draws Some Outcries of Its Own take a more balanced view of the situation (unfortunately registration is required to view this article.) And Greg Sterling added some thoughtful perspective in this article: The Long Knives Out for Yelp. […]

  19. Douglas Garrett Says:

    Yelp’s “system” is definitely inaccurate and unethical. Case in point: I have written a number of reviews, mostly very postive. However, none are shown on the site because, according to their customer service, their computer decides by some unknown process which users reviews are shown and which are not. This MAY be linked in some way to how many times you log into their site as a registered user. However, I can see that some people have written far fewer reviews than I, yet their reviews are shown, and mine are not. My reviews follow, strictly, all the rules that Yelp requests. When I complained about this, Yelp customer service essentially had no response, except to “blame” the computer system. So what we have is a site that is NOT showing all the reviews that people write, and therefore the results are obviously affected by this. I suspect that any negative reviews are somehow filtered out, or a certain percentage of them are, but in doing this, they also “close down” every review that a user generates, even if the majority of reviews a user generates are positive. I don’t know what is going on, but something stinks. They are not being as honest as they should be about their site and ratings.

  20. Dustin Says:

    Yelp administers their policies and terms of service inconstantly and without an ethical compass.

    They are only concerned with money, not fairness. Here is a prime example. They claim on their terms of service (TOS) that “elite” squad member may not e business owners:

    “Elites may not be business owners or affiliated with a local business (spouse, general manager, partner, etc.), due to the inherent conflict of interest. Business owners can still get in on the conversation and voice their opinions by claiming their business page and creating a free business owner’s account.”

    Yet the knowingly have dozens of business owners who are “elite” squad members because these people pony up money for “sponsorships” (paid advertising).

    One example is this plastic surgeon in San Diego who is a yelp sponsor but has ONLY ONE YELP REVIEW! Sponsor with just one review: http://www.yelp.com/biz/barry-s-handler-md-san-diego
    Is also an “elite” member: http://www.yelp.com/user_details?userid=Z66KYst6RCeO6qetveQipw

    There are man more examples of the inconsistent treatment of members and businesses that it’s a wonder that yelp is not in litigation due to it’s many unfair and uneven tactics.

  21. Greg Sterling Says:

    Dustin: you appear to be correct. How widespread is this?

  22. Ron Gerber Says:

    Dustin….thanks for the examples of yelps inconsistencies. It kind of angers me.

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