Are Yelp ads worth paying for? How to figure it out for your business
Updated: Jun 18
As an agency that regularly works with small businesses, we're frequently asked: "Should I advertise on Yelp?" or "Should my business advertise on Yelp"? Since we hear about this fairly often and we're a top Yelp certified partner, we wanted to answer this question more directly using historical client data. But, in case you're just looking for the short, TL: DR version, here's our quick answer to the question of whether or not Yelp Ads are worth paying for:
Yes. Yes, they are. Yelp Ads is one of the best options businesses have to advertise to local audiences.
Keep reading to learn why we believe so strongly in the platform.
What are Yelp ads, and what do they offer businesses?
Before we beat you over the head with a ton of complex data and number crunching, let's briefly go over what Yelp Ads are and what they offer businesses. In short, Yelp Ads are cost-per-click (CPC), or Pay-Per-Click (PPC) ads that show up in various places throughout the Yelp platform. When potential customers search for various terms on Yelp, such as "lunch" or "plumber," Yelp's algorithm uses different information to determine which businesses to promote to them in the sponsored search results.
Information the system it factors in includes:
The user's location
Typical buyer behavior
Other details that might be relevant to providing the ultimate search results to the end-user
Like Google or Facebook, it's a paid advertising platform that delivers the most relevant ads to users when searching for specific search terms.
Here's a quick screenshot from Yelp's search results that does a great job of illustrating where these ads can appear:
As you can see, this local San Diego plumbing company, PIC Plumbing, is an active advertiser on Yelp. This screenshot shows their advertisement appearing in the desktop search results on Yelp. Throughout the rest of this post, we'll focus on their profile, ad campaign, and results to demonstrate how powerful Yelp Ads can be and what benefits they offer a small business when optimized and managed correctly by the right team.
How to determine whether or not Yelp ads are worth paying for
This is one of the toughest questions for us to answer because, in short, it depends.
It depends on the business, its goals, how active they are on Yelp (outside of advertising), its product or service quality, and several other factors. However, we can confidently say that if executed correctly, Yelp Ads can offer an incredible return on investment for the right types of businesses.
There are definitely specific industries that tend to perform best on Yelp, which include:
If your business fits one of these categories or is adjacent to one, we can probably still have a conversation about whether Yelp ads are worth paying for.
The unfortunate truth is that Yelp's local advertising team isn't able or willing to provide businesses with deep, authentic insights about their potential on the platform and instead talk about high-level marketing terms like cost-per-click or impressions. Most small business owners aren't professional digital marketers, so these terms don't give them the information they need to decide whether Yelp is worth investing in.
This leaves business owners in a challenging position when determining whether Yelp Ads suits their business. They can either take a leap of faith and commit to spending hundreds (or thousands) of dollars per month on a platform they're unfamiliar with, or they can choose not to advertise and watch their competitors take advantage of the millions of monthly active users on Yelp.
So what's the answer to this problem? Scheduling a digital marketing consultation with an agency partner like us.
What is the Yelp Agency Partnership and How does it work?
Yelp has developed the agency advertising partnership program to help bridge the gap in communication between their massive sales teams and small business owners who don't know right from wrong in the digital advertising world. At J&S Digital, a former Yelp employee is running our entire Yelp program. This means that we're not only formally trained and certified by Yelp, but we also have experience working on the other side and have access to data, resources, and information that almost nobody else in the digital marketing world has.
We understand how the platform works, what types of businesses succeed, and how to troubleshoot problems when they inevitably come up. We've worked with many local companies and have seen first-hand which ones succeed and which ones fail. This allows us to have an in-depth conversation with local business owners about whether or not Yelp Ads is worth paying for and what type of return on investment they can expect if they decide to move forward.
Want to schedule time with our team to discuss if Yelp is right for you? Contact us today.
Factors to consider when deciding on Yelp ads
When clients approach us asking whether Yelp ads are worth it, we don't ever answer yes or no right away. Instead, we have an incredible process that helps us identify whether or not your business is worth advertising to customers on the Yelp platform. Before answering your question, we ping our partner team at Yelp, who gathers vital information about your business, your competitors, and what your expected performance might be if you were to begin an advertising campaign. Factors we look for when determining your eligibility and likelihood for success are:
Your business category
How many reviews you have
The quality of your reviews
The star rating of your business
Your competitors' ad spend
Your competitors' review count
Your expected customer lifetime value
Amount of available search inventory for your category in your area
Your estimated monthly budget for advertising
Your expectations for lead generation
Your experience with digital advertising
How fast you need results
These factors (and more!) help us understand whether or not you should continue with the conversation about Yelp ads and how we can set you up for success if you decide to move forward. If you've decided that Yelp ads are suitable for your business, congrats! You're on your way to reaching more customers and growing your business. Here's what you need to know to get started.
The pros and cons of using Yelp ads
Just like any advertising platform or digital marketing tactic, there are pros and cons you should be aware of before committing to advertising on the Yelp platform. We aim to be as transparent as possible with our clients to ensure a smooth advertising experience here at J&S Digital, so whether you like the bad news or not, we've got to be honest with you about what you can expect (the good, the bad, and the ugly).
The primary benefit of advertising on Yelp is that you can increase your brand awareness and reach new customers who are actively searching for businesses like yours. Yelp is one of the most popular online review platforms with over 100 million monthly active users. Plus, according to their website, nearly 97% of Yelp users make a purchase with a business they found on Yelp within the first week.
Yelp users are typically high-net-worth individuals with purchasing and decision-making power, so connecting with them directly is a great way for your business to generate more revenue without having to be clever with Google and Facebook Ads (which require targeting and detailed campaign management daily). Another great thing about Yelp ads is that you can track your leads and conversions directly through the platform so you can see how well your campaigns are performing and adjust them accordingly.
The cons of Yelp advertising are that it can be pretty expensive, and the reality of paid ads is that the leads you generate might not always be quality ones. The average cost-per-click (CPC) on Yelp varies depending on your business category, location, time of year, and other factors, and can swing from month to month without any warning.
Performance isn't guaranteed, and there's a long ramp-up time to get your call volume, messages, and overall lead activity up to the point where you feel like your dollars are working for you. We can't emphasize this part of the process enough - new advertisers on Yelp need to be patient with the system's algorithm, as it typically takes at least three months to optimize your ad to find the best possible customers for your business.
As we covered in our recent blog about the great debate of SEO vs. SEM marketing, not every marketing strategy fits every type of business. So, we do our due diligence to make sure we review the pros, cons, and everything in between with our clients before deciding on an official game plan or strategy.
Tips for getting the most out of your Yelp ad campaign
There are tons of ways you can optimize your profile and advertisement on Yelp to maximize the number and quality of leads you receive. First, make sure your NAP (name, address, phone number) is totally correct on your profile so that when people reach out, they can get in touch with you.
Then, we recommend investing in a Yelp Enhanced Profile to increase the amount of information you can include about your company. Take a look at how much information can be packed onto a single enhanced profile below.
The company's logo, business highlights, verified license, and portfolio are included as visual elements of the enhanced profile that are known to help convert Yelp visitors 38% more often than basic profiles. Plus, enhanced profiles remove competitor ads from your profile, reducing the chance that a potential customer bounces from your page (after clicking your ad, which costs you money) to one of your top competitors. You could also enroll in Yelp Connect to create weekly update posts to engage with local customers about your new offerings, discounts, available services, and more.
According to Yelp, businesses that advertise on their platform see an average of $23,000 in annual revenue as a direct result of their advertising efforts. This number is just an average and depends on how much advertising budget someone spends per month, but overall, Yelp has become what it's become because it has proven data to back up its claims that it helps local businesses convert leads. The numbers can be much larger for professional services like doctors or home services businesses like moving companies with higher average customer values.
For example, our plumbing client recently saw almost an 8x ROI on their monthly Yelp Ads investment, spending $2,400 in one month on their ads, which generated nearly $19,000 in new revenue for their business from a mix of commercial and residential customers. Of course, not every company will see the same results - it all depends on your customer lifetime value, marketing goals, and other factors - but there are definitely opportunities to succeed with Yelp advertising if you're strategic about it.
Yelp Ads: The Bottom Line
Overall, we believe that Yelp Ads can be an excellent investment for local businesses looking to increase their brand awareness and drive more leads. The key is to track your results carefully, adjust your budget and targeting as needed, and be patient while the Yelp algorithm optimizes your ad campaign.
If you're unsure whether Yelp Ads are right for your business, we recommend starting with a small budget to test the waters. You can always increase your spend if you see that you're getting a good return on investment (ROI). And if you need help managing your Yelp Ads campaign, our team would be happy to chat with you about how we can help!