Yelp Accused Of Review Extortion

The relatively small circ indy paper East Bay Express, which serves Alameda and Contra Costa Counties in NorCal including my hometown, O-town, has a long piece accusing Yelp of manipulating reviews to reward or punish small businesses based upon whether they make ad buys. These are not new allegations, though the paper cites some specific customer complaints and emails that make the story more credible than the random accusations that have dogged the company before. Here's an excerpt:

"Hi, this is Mike from Yelp," the voice would say. "You've had three hundred visitors to your site this month. You've had a really good response. But you have a few bad ones at the top. I could do something about those."

...

John's restaurant has more than one hundred reviews, and averages a healthy 3.5-star rating. But when John asked Mike what he could do about his bad reviews, he recalls the sales rep responding: "We can move them. Well, for $299 a month." John couldn't believe what the guy was offering. It seemed wrong.

...

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.

...

Here's what advertisers receive, according to an e-mailed sales pitch that a local business owner sent to this newspaper. They can highlight a favorite review to appear at the top of the page about their business. They also show up first in search results for similar businesses in their region (for example "coffee" near "Alameda, CA"). Ads for that business appear on the page of local competitors, while competitors' ads do not appear on their page. Owners can post photo slideshows, add a "personal message" about their business, and have the ability to update info on special offers and events. They also can find out how many users visit their web site, update their page, contact Yelpers who've reviewed their business, and have access to an account manager who will help "maximize" their experience with Yelp.

But aside from a single "sponsored review" at the top of the page, the order of all other reviews is based on a secret Yelp algorithm, spokeswoman Ichinose said. The order is mostly due to recency and reader votes for certain reviews as "useful," "funny," or "cool." But Ichinose said there are other factors, including how frequently reviewers contribute to the web site and "what kind" of review writer they are. "It's a number of different things we don't disclose," she said. "To be explicitly clear, the algorithm is an automated system. There's no human manipulation of that. ... If we were to start doing that, that would erode the trust we have with consumers."

Yelp officials strenuously deny that the company moves negative reviews for advertisers. So how to explain all the stories?

...

Former Yelp advertiser Mary Seaton said she took the company up on its offer to move her negative reviews if she advertised. Seaton, the owner of Sofa Outlet in San Mateo, paid $350 a month for six months about a year ago. During that time, Seaton said, her negative reviews were removed and old positive reviews showed up. "There was one negative review but they pulled it down and then it came off," she said. After her contract was up, Seaton said a negative review appeared, which contained lies. When she asked her sales rep, Katie, about it, she responded, "We don't get involved with that. We're not mediators." Seaton said at that point she chose not to renew her ad contract.

One San Francisco merchant said a Yelp sales rep rearranged the reviews on his restaurant's page to entice him into advertising. Greg Quinn, general manager of Anabelle's Bar and Bistro in San Francisco (168 reviews, 3.5-average star rating), said that around January 2007, a Yelp sales rep was trying to get him to advertise. Quinn said he subsequently noticed that some of his negative reviews had moved further down on the page. "It was clearly ... a sales tactic," said Quinn, who added that the rep called him up and asked, "'Did you notice what I did? Well, we can keep doing that for you.'"

While I have pushed the bounds of respectability in quoting so much of this article, let me assure you that there is a lot more info and that you should go read their article and draw your own conclusions.

But is this believable? I think it is, though I suspect that the truth is somewhere in between the company's protestations and the intensity of complaints from small businesses. Specifically, I suspect that there ARE reps promising these things -- it's a pretty darned good way to close in my view. While the company probably does has policies against this, I suspect that the lure of profit and commission has induced some reps to behave in this manner.

And my suspicion is that Yelp is hard to sell to advertisers, because it is not controllable (in theory) and consists entirely of UGC. I have a friedn who's small retail business was dogged by a negative reviewer whom he later found out was a competitor -- by that competitor's own admission.

This, dear reader, is the new challenge of digital media -- it's all an incredibly dynamic and wonderful total morass of truth and lies. But Yelp has to figure out a way to solve this issue, or face advertiser -- and consumer -- backlash. I believe in the people at Yelp and alsp believe that they can find a solution. And they'd better.