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.