Yelp’s Spotlight Ads Help National Brands at a Local Level

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A new ad product from Yelp is helping national brands, as well as regional, connect with consumers at the local level. Spotlight Ads are now set to appear as brief seven-to-30-second video ads or static images on Yelp’s home screen. With location targeting turned on, brands can design their Spotlight Ads campaigns to exclusively reach people physically near their stores. 

The ads are an evolution of Yelp’s Seasonal Spotlight Ads.  They debuted last year as a way for brands to promote static ads on the Yelp homepage tied to seasonal events, like National Sibling Day or Labor Day.

Nearly two decades have passed since Yelp first began publishing crowd-sourced reviews. In that time, the company has evolved from a simple business directory to a local marketing juggernaut. Spotlight Ads is the most recent in a long line of products and solutions. The list includes Yelp Fusion  and Guest Manager, a front-of-house operations tool for restaurants. They are designed by the company to help national and regional brands reach high-intent shoppers. 

Tom Foran is Yelp’s senior vice president and head of go-to-market, national.  He beleives Spotlight Ads demonstrate Yelp’s commitment to creating engaging ad solutions for national brands.

“Spotlight Ads present a great opportunity for national brands. It helps reach Yelp’s high-intent audience at scale by advertising on Yelp’s homescreen whenever it aligns best with their campaigns,” Foran says. “The product leverages location targeting, for users that have opted-in to it. Only engaging the consumers who are physically near a brands’ brick-and-mortar locations to drive them to visit their stores.” 

Almost immediately, Foran anticipates a number of national brands will be using Spotlight Ads to promote Black Friday sales and other limited-time holiday-related product offerings. 

The impact of running Spotlight Ads will be measured through Yelp’s first-party attribution tool, Yelp Store Visits.

Yelp’s decision to rely on video for its latest ad product is no surprise. Video advertising has been a dominating force in 2022, with TikTok ad revenue expected to eclipse Meta and YouTube’s combined by 2027. Online video ad spend is up 30% since this time last year, and the number of advertisers contributing to that spend has increased 21% quarter-over-quarter.

“We have tens of millions of high-intent consumers who visit Yelp looking to make a purchase — in fact, according to our new research, 83% of users hire or buy from a business they found on Yelp,” Foran says. “At the same time, video is one of the most engaging and effective ad formats for brands.”

Macro Concerns

In an effort to better understand how broader economic concerns are impacting how and where consumers choose to eat and shop—and how those choices are affecting national and regional brands—Yelp recently commissioned a survey of more than 2,000 consumers, conducted by Material. Results showed that many Americans are choosing to visit more national and regional chain businesses as a direct response to inflation. 

More than half of survey respondents said they are more likely to choose national businesses than local or independently owned businesses when spending money now. Consumers in the Gen Z cohort are especially turning to national brands as a way to lower their costs.

“Given today’s macroeconomic environment, it’s more important than ever for national brands to be able to quickly pivot their advertising strategies. Especially to reflect ever-changing consumer behavior,” Foran says. 

Yelp’s data show consumers in younger generations are more likely to choose national chain businesses when shopping and dining out,. This despite older generations proving to be more frugal. 

More than one-third (37%) of Gen Z consumers believe fast food restaurants save them more money than local restaurants. This demonstrates a clear perception—real or otherwise—that chain businesses are cheaper than locally-owned businesses. 

“We’re seeing national brands shift their focus to performance ads over branding — they’re looking for the right ad products and content partners that can reach their target consumers at the right time and in a highly measurable way,” Foran says. “We’re also seeing more national brands prioritize advertising that speaks to local communities. Which makes Yelp a particularly important platform to include in their overall ad strategy.”

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.