After Conquering Local Ads, Yelp Eyes National Sales

Yelp is moving from targeting your local corner restaurant to businesses with hundreds or thousands of locations.

Tom Foran, Yelp’s SVP of national sales, is leading this effort. It’s working. National sales grew 22% in the past year. Revenue for its top 100 customers soared 50%. His 250-person team is focused on Yelp’s “multi-location segment” – businesses with 30 or more locations, including chains like McDonald’s or Sweetgreen.

One reason behind Yelp’s success is a streamlined offering, Foran said. Three years ago, Yelp salespeople would pitch two offerings: top-of-funnel display ads and cost-per-click sponsored listings.

Yelp eliminated display ads in 2015, mainly because mobile screens couldn’t carry both types of ads without looking cluttered. When rebooting its national sales pitch, Yelp realized that its main value to buyers wasn’t top-of-funnel branding banners.

“Our play is clicks to bricks,” Foran said.

Foran, a digital and ad tech veteran who’s worked at Yahoo, Outbrain and Yieldmo, spoke to AdExchanger about Yelp’s push into national sales.

AdExchanger: Yelp is in competition with Google Maps, Instagram and Facebook. How does that play out in your conversations with enterprise brands?

TOM FORAN: We are very competitive. Whenever companies have a location presence – like restaurant brands, retailers, home and local services – we do really well. We are invariably in the top quartile of third-party attribution results.

But Yelp has traditionally been so synonymous with local, we are having many conversations with large agencies and customers for the first time. I think we’ve found our voice in enterprise. After sunsetting the display business, we’ve figured out our playbook and why we matter.

Do people ever want to use Yelp just for attribution?

 I came in thinking, “Let’s build an attribution business” because of my ad tech background. But we’ve chosen to be a destination and a publisher, and less of a B2B player, who through our own data set will measure [store traffic].

We haven’t written that off as a possibility – we have an incredible data asset – but the company is taking an appropriately conservative approach to our data. We provide content to the Yelp Store Visit  product for customers that want to use it. We also work with third parties like Placed, because often a large media agency or enterprise won’t allow the person selling them ads to grade their own homework.

Foursquare became a data business. That’s not your strategy?

I think Foursquare made an effective pivot to embracing that as their sole proposition, compared to years ago when they were head-to-head with Yelp.

Even Snap selling Placed – I don’t know if they [sold] because they couldn’t make “seller of media” and “measurer of media” both work at once, but that would certainly be a challenge.

Could we offer an agnostic solution? We probably could – but would it be credible in the marketplace?

What’s on your ad product road map?

What’s interesting about a national chain on Yelp is not necessarily that there is a McDonald’s near you, but that there is a limited-time offer. We built a product called Offer Campaigns, which gives a canvas to advertise Shamrock Shakes or pumpkin spice lattes – products that drive customer behavior. We built it because of customer demand, and we are seeing strong growth among the enterprise segment. And we think it is enhancing the Yelp consumer journey as well.

Yelp has been very publicly anti-Google and called for anti-trust regulation. On the sales side, do you feel like you can fight a fair fight? Or is the deck stacked against you?

On the sales side, I feel we can fight the fair fight and compete on our merits. I’m not an expert in public policy.

We grew 22% from Q1 2018 to Q1 2019. As an example, we’ve identified 250 strategic accounts we’re really focused on and have entered in 60 of them. We’re seeing growth, and we have years of runway ahead of us in terms of enterprise opportunity. We hold our own performance-wise. 

Yelp is making a play to diversify beyond restaurants. Is that true for its national business too?

The vast majority of our revenue comes from outside the restaurant space. I came to the company thinking we were an endemic restaurant publisher, but home and local services is significantly larger than restaurant revenue. The No. 1 area of growth for us is traditional retail: hyperlocal ads mapped to a larger retailer’s location base.

Is Yelp’s audience shrinking as maps, search and Instagram make it easier to find local businesses?

Yelp traffic is still growing. The difference between Yelp and some of our competitors is that if you are going to Yelp and searching for Italian food, you are 100% looking for a restaurant to go eat at. If you do a Google search for Italian food, are you writing a term paper? Doing research?

We have really isolated the user action, because we are so focused on the utility of “I need to find a place to eat or a carpenter or a car repair.” I think that’s why we perform better.

You can go on Yelp and see fake reviews, or unreliable reviews from cranky people. How does Yelp earn consumer trust?

We take consumer trust more seriously than any other local directory out there, and it starts with our founder Jeremy [Stoppelman], and his vision that without consumer trust, there is no Yelp and there is no value.

How do you sell to companies when they have businesses with one-star reviews?

Ratings and reviews are a touchy subject for customers. In the enterprise space, we can educate customers on a proactive strategy to manage [reviews] and refer them to partners such as Sprinklr [that manage listings].

There are some businesses with higher ratings and better reviews than others. We focus on how ads drive business outcomes. And the products we build are designed to give the business owner a voice to tell their story without taking away the consumer utility of ratings and review.

Some of the recommendations to improve your business listing lead to the critique that if you work with Yelp, all of a sudden your reviews look better.

There’s zero to that, and it’s something that’s been debunked – the idea of pay to play or pay to change your reviews. It’s complete nonsense, and it’s been proven as such in multiple court rulings. It’s an unfortunate meme that won’t die. Especially in the enterprise world, it almost never comes up.

In-housing is a big trend. What’s different about what an in-house client cares about?

One of our largest customers is among the top 10 retailers in the world. They are going to be a seven-figure customer. They are embracing a localization strategy, realizing the importance of promoting your store footprint. They realize it’s important to get people into stores, not just ecom, because the vast majority of commerce still occurs at retail.

Publisher data is rising in value in the wake of privacy regulations like GDPR. What does that mean for Yelp?

We’re happy with our third-party partnerships, and it’s incumbent on those businesses to stay compliant. We are fortunate that unlike most publishers, we have a compelling reason why users register and why location is so central to the service of Yelp. We have a nice data set for products like Yelp Store Visits. We’re hopeful it will always be a combination of first-party and third-party data, but unlike most publishers we have a really great first-party data asset.

This interview has been edited and condensed.

 

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