Why Yelp Is Steadily Becoming a Force in Local Data Aggregation

It’s been hard to miss the individual announcements about Yelp’s syndication deals over the last couple of years, but until I heard myself answer a recent SMX Advanced question, even I hadn’t fully realized the reach of a business’s Yelp profile.

The question that prompted this entire exercise had to do with a business owner’s difficulties in correcting his listing on Yahoo Local. He’d tried desperately to get someone at Yahoo to update his listing to no avail, and wondered if I had any advice.

Somewhat to my own surprise, my advice was to ignore Yahoo completely, and instead work harder on getting at least one Yelp review that wouldn’t be filtered.  The reason, as many of you likely know, is that Yelp listings with reviews now completely overwrite Yahoo Local listings for the same business.

This arrangement has been nothing short of a catastrophe for a number of business owners with (previously) strong Yahoo Local profiles, and may be the penultimate step in Yahoo’s shocking decline into Local irrelevance under its revolving-door CEOs, after being perhaps the industry leader in 2006-2007.  But that is another column for another day.

A Shift in Strategy
The question above really got me thinking about the dramatically increased reach of a Yelp profile over the last couple of years.

Earlier in Yelp’s existence, the company was notoriously protective of its content. Obviously it has held its review cards very close to the vest with Google ever since the summer of 2011. But even prior to that, those of us in the local search space considered Citysearch the review “darling” as a customer review destination, thanks to its syndication of those reviews to just about everywhere. Meanwhile, a Yelp review was essentially only seen by Yelpers.

Things started to change in 2012, however. Yelp’s deal to send reviews to Bing was the first major signal, followed by its even more visible inclusion in Apple Maps. Then, more recently, in addition to the Yahoo, Mapquest followed suit in integrating Yelp content. A number of smaller but important sites like GrubHub also use Yelp data. And Greg Sterling anticipates that Yelp may start sending content to YP on the heels of those companies’ recent partnership announcement.

Even without YP, that’s a rather impressive list of sites where a business’s Yelp profile plays at least some role in their visibility and presence.

Yelp the Pseudo-Aggregator
Unlike traditional aggregators like Infogroup, Acxiom, Neustar Localeze, and Factual, which provide basic listings for a very broad range of something like 20 million businesses in the U.S., Yelp is primarily focused on popular businesses — especially reviews of, and deals at, those businesses. In fact, Yelp’s API will only return information about businesses with at least one review.

As a consequence, the primary use case for Yelp’s data by its partners like Apple, Bing, and Yahoo, is to augment the baseline data they’re already ingesting from a traditional aggregator, rather than replacing the feeds from those aggregators altogether.

But now that Foursquare has decided to charge heavy users of its venue database, Yelp finds itself with a remarkably competitive data product. Along with Foursquare and Factual, even with a crippled offering, Yelp is probably third in terms of the quality and breadth of its data at a global scale. Open Street Maps is an up-and-comer, but its business data coverage is spotty at best. And the corpus of businesses with Yelp reviews is “big enough” for a number of app developers and non-directory partners like Trulia to derive huge value from.

Why Has Yelp Productized Its Review Data?
Due to Yelp’s strict policy about business owner review solicitation, there are sadly no benefits to this increased review visibility which its salespeople can use to entice prospective advertisers.  But perhaps some sort of preferential placement or visibility in Yelp’s data feed is coming soon.

That sort of ad-network play didn’t exactly work out for CityGrid, but Yelp is providing a much richer set of reviews with its feed than CityGrid ever did, and given the limited number of global data options, Yelp may be in a stronger position to dictate these partnerships than CityGrid was.

So I can only come up with two serious reasons for Yelp to do this. The first is brand perception, especially among investors. The very public Apple and Yahoo deals certainly haven’t hurt Yelp’s brand image, and it seemed to escape relatively scot-free from the underlying data issues that initially plagued Apple Maps (some of which still do). All the way along Yelp’s post-IPO ride, Wall Street investors have seemed much more interested in Yelp’s perception among technologists, including its partners, than its perception among its customer base (i.e. small business owners).

The second reason for Yelp to productize its data is to position itself as the hub of an everybody-but-Google local ecosystem. This is a smart move on Yelp’s part, as the fragmentation of local-mobile apps may yet erode Google’s local market share, leaving Yelp in a relatively stronger position than it currently enjoys. Of course it faces the same vulnerability that Foursquare recently discovered when Instagram dropped it for Facebook Places, but it’s hard to see too many companies developing a comparably-sized review corpus anytime soon.

What’s Next for Yelp in This Space?
Honestly, I wouldn’t expect Yelp to change its position on reviews anytime soon. But I also don’t think small businesses are all of a sudden going to jump on the Yelp advertising bandwagon in its current form, even if the company can slowly turn around its perception among these businesses.

Through deals like Yahoo (and perhaps YP), the review syndication angle may be one way in which Yelp can improve the persuasiveness of its sales pitch to small business owners, without ruining the UI of its own product. I’ll be watching its continued evolution as at least a pseudo-aggregator eagerly in the coming months.

David Mihm is Director of Local Strategy at Moz, and the architect of Moz Local — a newly released software product that distributes U.S. business listings to the primary local data aggregators and important local directories.