Keynote Conversation with Yelp Chief Operating Officer Geoff Donaker

October 5, 2010
By Lisa Barone in Internet Marketing Conferences

Good morning, friends! We are back in action today with six meaty sessions to get through. So make sure you stock up on your coffee now.  I know I am. Thank goodness there’s a Starbucks hidden in the Javits Convention Center. :)

Chatting with us this morning is Yelp’s Chief Operating Officer Geoff Donaker.  I have it on good authority we may tackle some of the lawsuit questions this morning and other heavy stuff.  Here’s hoping things get juicy!

Chris Sherman is up on stage with Geoff and it looks like we’re getting started.  Time for Chris’ first question.

What is Yelp? Why was it started?

Yelp is a place to go to find a local business.  You think about the way in which Yelp has evolved – it’s where you go when you need a dentist (poor Rae…) or a place to eat while you’re in town. Because of the rich communities of locals in big cities, Yelp has evolved as a Web site, as well as a popular mobile application the way that Wikipedia has in the encyclopedia space.

Why did they get started? Their founder moved to San Francisco looking for a doctor in 2004.  He was geeking around on the Web thinking the Internet should be able to solve this problem for him. But he couldn’t find anything, he just found insurance Web sites.  They weren’t very helpful. They could tell him when the doctor graduated, but it couldn’t say if they were respected.  Yelp was born to take advantage of the consumer reviews that had been around for years. It was built that way.

Tell us a little bit about your traffic.

38 million people came to the site last month – that’s just the desktop and doesn’t include the mobile app. They have 13 million reviews. Hundreds of thousands of local businesses are adding their own photos, descriptions, etc.  He lets business owners know that Yelp has a free set of tools for them to use that they should be taking advantage of.

How do you manage the site to make sure user experience is really high quality?

They think quality is more important than quantity. When Yelp started, there were other people trying to do what they were doing, but they weren’t taking off. The Yelp POD was to start simple.  They started with a single city (San Francisco) and stayed that way for almost a year and a half. Other sites were trying to be national/global overnight.  You can’t breed quality that way.   Yelp also had a review filter that looked for suspicious patterns in review activity.  The software in the review filter suppresses reviews it finds suspicious.

You mention the review filter. There have been some people who haven’t been happy with that, to the tune of lawsuits. What’s your response to that? How do you tackle that?

A big part of it is education. [Check out Yelps video explanation of the Yelp Review Filter.] In the early days they were blasted with the hockey stick pattern of traffic. When you’re a team of 10-20 people it’s hard to get ahead of that. They’re slowly catching up with explaining to people how things work and why they  have the review filter. In a lot of ways that’s all they have to do. Nine times out of 10 if they help people understand that there is a review filter, they understand it when they see it. They want to combat spam so they have their best engineers working on that review filter.  They want to show all the trusted reviews and less of the suspicious ones.

Is there a ratio between positive and negative reviews? Can you give us a bit about the secret sauce?

It’s mostly frequency.

You mention the tools available to business owners to help them take control of their listings. How can people work with you?

Anyone who has a physical address should be using Yelp. They want Yelp to be a one stop shop for local businesses to market themselves on the Web. They have a suite of tools t hat are available for free. You just have to unlock your business account.  From there you can get into other services. If you want to promote an offer through CPC ads or put a slide show on your page, you can do that.

[I wrote a post for SmallBizTrends about how to unlock your Yelp listing and all the tools available. You may want to check it out.]

Are there opportunities for advertising for non-local businesses?

Absolutely.  They have a robust display advertising products on the site and via email.

You encourage business owners to interact with the community – that’s reputation management. Do you have any general tips on how to do reputation management in a credible way so you don’t come off as offensive?

Part of it is responsiveness and taking the opportunity to get in touch with anybody who has written a review about your business. And be positive. No one likes to be attacked. But when you do get that one flaming review, you want to keep it positive. Apologize for their bad experience and ask what you can do to fix it.

How big is the mobile space for Yelp? Do you see mobile growing?

Millions of folks use Yelp’s mobile application every month.  He doesn’t have the latest stats, but he knows that 3 million people use the downloaded mobile applications every month.  That’s small relative to the 38 million the desktop, but their usage is really, really high.   On Saturdays, nearly 50 percent of all Yelp searches are on mobile devices. Nice.

Let’s talk about Google.  Your relationship is “complicated”. What’s going on?

Google is the 800lb gorilla in the space. We have a friendly relationship with many people in the company. They’re our biggest partner and our biggest potential competitor.  They use a number of Google tools throughout the service.  They use the Google Ad Manager for display products. Over time will they be a competitor? Given their front door traffic that so many people go to Google to begin a local search experience, sure. If Google tried to squeeze us out that would complicate things but we haven’t seen any signs of that.

Will Google buy Yelp?

At this point, we don’t see any reason to not be an independent company.  We’ve carved out a nice niche.  We want to go public at some point, but there’s no rush. We’ll be private for another few years at least.

What would you call your most important area for growth?

  1. Platforms: Mobile is crucial. They want to move over to mobile from the PC
  2. Cities: They want to deepen the Yelp experience in the cities they’re already in, and they want to increase the cities they appear in.
  3. Ad products: They live to serve the consumers and the local businesses. They think their suite for SMBs is good but he wants it to be world class.

Do you treat international markets the same way you treat the US?

80 percent of bringing people together is the same. 20 percent will differ from market to market.

What are you thoughts about the current trends in local – checkins, Groupon, etc? Are they here to stay?

He thinks in some form they’re here to stay. On the check in side of things, that short form type of participation makes a ton of sense.  It’s gone really well for them. People may not want to leave a full length review on a place, but it’s worth checking in to leave a short snippet about their experience. He thinks that trend is here to stay, but it may not forever be a “check in”.  The concept of a deal or a coupon – that’s here to stay.

Do you consider companies like Groupon and FourSquare competitors or is it symbiotic?

It’s a little of both. They compete with everybody and nobody. They compete for the same users but they don’t do the same thing.

You’re working with Facebook integration to customize things. How does that work?

If you come to Yelp while logged into Facebook, they can show you if your friends have left reviews on a page you’re looking at. That’s helpful.

Facebook has come under fire for privacy. Any concerns about that having a spillover effect with what you’re doing? How do you deal with privacy?

They haven’t seen a problem with privacy. There was a privacy concern when the Facebook feature first went live. They take privacy very seriously when people are sharing personal information. The good thing about Yelp is that people share information on Yelp in a deliberate manner.  They’re doing it by choice, they’re not trying to keep it private. It’s not the same on Facebook.

In the mobile sense, in terms of user behavior, do you see different types of ways people interact?

They do. Their number one form of contribution on the desktop is leaving reviews. That’s different on a mobile device. On mobile, you can draft a review but you go back to the desktop to edit and approve it.  The other thing they see on mobile is uploading photos. It’s really convenient.  Thousands of people are uploading photos via mobile every day.

What’s the future of Yelp?

They want to keep the train on the tracks and not get in the way. They have a lot of demand from consumers and local business clients. It’s on them to keep innovating. They’re trying to hire great engineers as fast as they can to keep it going. They want to keep adding new cities and create new ad products.

Are there other opportunities for non-local businesses, like large brands or national chains?

Absolutely.  When you think about a national brand that has a local footprint, it makes a ton of sense for them to be on Yelp.  If you were running a marketing campaign for a national business that has a local footprint, you definitely want to be on Yelp and create trackable URLs. If you don’t have a local footprint like Coke, you just want to get in front of our demographic. For that they have a lot of display opportunities.

How do different people use Yelp? How active is the community? Do you have Yelp meetups?

We do! In all of the 45 cities that have a Yelp community manager, we do have local Yelp events.  People get together and get to know one another. It increases the level of authenticity. When you know who you’re writing for, you want to make sure the review is as good as possible.

Steve Jobs said that people don’t search on mobile. What’s your thought on that? When people have apps does it change their behavior?

It is a little different. Whether you call it search or not isn’t the point. It’s more that the user behavior is a little different. It’s just harder trying to do a long form search on a mobile device. On the flip side you have the benefit of GPS and a compass on a smartphone that can get you an answer much quicker.

And we’re done.  Time to head to the next session.

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