Category Archives: trust

The Yelp transparency mistake


What should you learn from Yelp’s retreat today?

The business-review site Yelp has been getting smacked around by rumors that it rigged its review system, nasty allegations to be sure, perhaps a big misunderstanding from the small businesses it profiles who can be hurt badly by a negative appraisal or two. (Yelp has become a word-of-mouth powerhouse, now the 101st most popular web site in the United States with nearly 10 million unique monthly visitors. Imagine the angst if your little shop got a one-star rating on Yelp you didn’t know how to counter.)

So today Yelp announced it would back away from a key component of its advertising system: It will no longer allow advertisers to pick the first review that appears on their page — as in, previously if you paid Yelp cash, you got to select the best review for your own business and elevate it in the rankings, while your competitors who didn’t pay had to just suck up whatever consumers wrote. Jeremy Stoppelman, Yelp’s co-founder and chief executive, was quoted in the NY Times as saying: “I hope that these changes will debunk some of the myths and conspiracy theories out there about Yelp and its advertising and whether those are linked.”

We’re not here to judge whether Yelp was wrong to previously allow advertisers to buy placement of favorable ratings; but we do note sowing confusion among customers is not a strong business model. Allegations are just that, and Yelp’s helpful business outreach manager Luther Lowe pointed us to 184 instances of Yelp advertising sponsors who had reviews stating “this place sucks.” The site boasts a complex business model that includes social networking, rewards for frequent reviews, “elite” status for the most loyal contributors, and a filtering system that must monitor more than 2 million business reviews for fair play.

To be fair, you try hosting that many rabble-induced ratings and see if you don’t tick off a few coffee shops.

But the lesson is clear: The perception of extortion, of unfair play, of biased material, of paid postings, is enough to break community trust. We heard it long before this latest news broke, months ago on a business trip in which a client raised doubts about whether to engage with the Yelp review system. “I’ve heard rumors that people pay to play,” she said, “and that model just doesn’t seem fair.” In an age of lightning-fast online tempests, the utmost transparency is required to keep your community happy. If you raise doubts about the rules of your game — say, by allowing some to pay to get better treatment in what is supposed to be an objective forum — you risk having to recut your business model.

Footnote: The New York Times asked its readers what they thought of Yelp. The responses show what happens when doubt catches fire.

Nice pitch. I don’t believe you.


One of the arrogant beliefs within ad agencies, including sometimes our own, is the thought that with the right branding, creative and media plan we can influence anyone in our target audience to buy a product. What that belief misses is the power of consumer prejudice.

Gallup, for instance, just reported wild doubts among the American population over how credible news media is. This should give marketers pause, because “news journalism” (with the exception of a few cable networks) is supposedly an even-handed, objective presentation of facts to the world. Only 45% of Americans say they have a great deal or fair amount of trust in news media, and the numbers slide further among the well-educated and conservatives (for advertisers, read that as “higher income, desirable customers”).

Brands face the same trust challenge

Decades ago Toyota realized it couldn’t possibly overcome its customers’ inherent bias. Toyota was a mid-market brand, and it would never attract luxury car buyers. Rather than fight the perception trap, Toyota created the Lexus … to wild success. And more recently Toyota launched the downmarket Scion brand targeting hip youths who wouldn’t be caught dead in a stale Camry.

Prejudice is an ugly word, but everyone has it, because we carry our worldviews around with us and make judgments about actions based on our past experiences. If you were burned by a stove as a child, you didn’t touch it again. When you buy a product and it fits a mold, you put it into that box, and don’t believe it fits somewhere else. Psychologists call this “heuristics,” mental shortcuts humans make to comprehend a world awash in too much information. Your cave-people ancestors didn’t think carefully whether to run when a lion attacked; a flash judgment told them to bolt, saving genes for you. Prejudice and snap logic are the reasons why healthcare reform in the U.S. may fail; health care is enormously complex, people have had bad experiences with paperwork and government bureaucracy in the past, so it is more simple mentally to just shout “NO!” than to try to process a nuanced, and potentially beneficial, reform logic.

It’s worth a discussion with your marketing team. How far can you push the brand message to be credible, given your target audience’s preconceptions? And when do you decide you need to become radically new to reach prospects who will never believe your old brand story?