As a consumer yourself, you’ve likely used online directories like Google or Yelp to find restaurants, bars, or a host of other local businesses. But when you don your small business owner hat, your perspective changes. Now you’re focused on bringing in revenue and determining the best ways to spend your limited budget.
So while you may recognize the consumer benefits of using business directories— convenience, organized service options, and so on—are there equally valuable benefits on the business side? Specifically, is it in your best interest to advertise on these consumer-driven platforms?
Well, a staggering 92% of consumers will choose businesses on the first page of local search results. If you can’t reach the first page with your local SEO strategy alone, then advertising can help bridge the gap. But is advertising effective, and how much does it cost? We assessed several aspects of advertising on online business listing sites. For simplicity, we’ll be referencing Yelp, but the Yelp pros and cons below also apply to the majority of business directories.
Yelp Advertising: 3 Pros
1. It can be effective (in the right industries).
Every industry has unique characteristics that make it suitable for some initiatives, and not others. So even though listing your business on the directory can be extremely helpful for organic reach with consumers, devoting your limited budget to Yelp ads may not be the best decision in some cases.
What type of businesses can most benefit from Yelp advertising? Restaurants for one. Every day, Yelp has a slew of consumers searching for local restaurants to dine at or order from. In fact, 55% of Yelp users searching for restaurants have ordered takeout or delivery from one they found on the platform, according to a Yelp-commissioned Nielsen study. Local retailers, entertainment venues, beauty services, and other consumer-driven businesses can find similar value by using Yelp ads.
In contrast, most B2B companies aren’t going to find much success by advertising through a business directory like Yelp, as most users are everyday consumers.
2. It has many users who are searching with purchase intent.
By their very nature, business directories tend to attract customers who are further down the sales funnel—ones who are more intent on making a purchase. Unlike with a random Google search, users have often purposely gone to Yelp or another directory to find a specific type of business to fulfill their needs.
A Yelp-commissioned SurveyMoney study found that an overwhelming 97% of users make a purchase with a business they found on Yelp, with over half (51%) of users buying within a day. Strong purchase intent typically correlates with a good ROI, so advertising on sites like Yelp may be a good move for your business.
3. It offers budget control.
Operating a small business also means working with a small budget. Advertising platforms can quickly run up the bill if you’re not careful, but Yelp ads have a built-in daily cap you set at your discretion. Want to start out at just $15 or $10 per day? You’re in the driver’s seat. Just note the minimum is $5 per day, so on the low end, you can expect a bill of about $150.
Yelp Advertising: 3 Cons
1. It can be costly to achieve desired results.
Contrary to the pro about budget control, Yelp can be quite costly compared to some other platforms because of the way it runs ads. Some advertising services—like Google—use a smart pricing system that keeps cost-per-click (CPC) fees low. Yelp doesn’t work this way, so you may face a high CPC, resulting in much fewer clicks per day for a given budget.
Recalling the industry variance in effectiveness above, CPC can differ greatly between professions. While some industries may see CPC at less than $1, competitive industries may see CPC soar into the double digits—so that $5 minimum may not take you far. Notably, any business directory that doesn’t use some type of smart pricing system or real-time auction will present the same costly issue.
2. It has limited targeting options.
Advertising platforms like Google and Facebook allow you to target specific keywords. This is valuable, especially when you know what words prospects use to find businesses like yours. You can use this targeting capability to reach customers across multiple stages of the purchasing cycle.
However, Yelp advertising doesn’t offer such an option. Instead, the site only displays your ads to users within an industry or niche category or within a given geographic area. For example, you may choose to only show your ads to users who are searching within a certain number of miles of your business. It also serves ads on some competitor pages.
3. It has a bad reputation among business owners.
People have filed over 2,600 complaints with the Better Business Bureau (BBB) about Yelp, with many of them written by merchants. The BBB has gone so far as to alert readers that Yelp has a “pattern of complaints” against it going back over seven years. Common issues cited in complaints include unexpected price changes on Yelp ads, filtering of positive reviews, and general predatory and subversive practices aimed at encouraging additional spending from businesses.
After reviewing the above Yelp pros and cons, do you think advertising on this and other business directories is a good fit for your business? Keep in mind that you can always try advertising and forego it later if the results aren’t what you expect.
In the meantime, get a helping hand and take control of your online presence across more than 70 business directories with Localworks, a local listing tool. Localworks is local listing management made simple. Ensure your customers have the most up-to-date information about your business, regardless of where they search. You can even get insights about how visitors interact with your business listings, then make informed business decisions from what you discover.