Yelp Update Reading Time 3 min. 45 sec.

Does Yelp Manipulate Reviews for Advertisers?

The newsletter on Yelp produced feedback that Yelp is not popular with site owners, particularly those who have experienced high-pressure sales tactics or have seen perfectly good reviews from customers they recognize categorized as not recommended.  This is indeed a story “ripped from the headlines,” as they say on TV.  Here are some recent developments.

A producer has shot much of a coming documentary about Yelp, called Billion Dollar Bully.  It’s being produced in San Francisco, right in Yelp’s back yard.  A number of Yelp customers have agreed to tell their tales of woe in the movie.  There is presently a Kickstarter effort underway to fund the completion of the film.

It would not surprise anyone if some Yelp salesman, in order to make quota, told a business owner that he could influence ratings even if he couldn’t.  Since there are thousands of Yelp salesmen, this could happen many, many times throughout the organization.  It also would not be a surprise if a business owner saw such a threat, and then saw a negative review the next day.  That could be just a coincidence, but of course you’d never convince the business owner of that.  Or the unethical salesman could have written a bad review!

So how does one decide whether Yelp is what they say they are, or what their critics say they are?

The Courts

One good mechanism for deciding is the courts.  Yelp attorneys on one side, building their best case, and a plaintiff’s attorney on the other side, doing his best to build the case against Yelp.  The last such case was at the U.S. Court of Appeals for the Ninth Circuit, which in their ruling in Levitt v. Yelp, affirmed the dismissal of a number of extortion suits that had been brought.  Yelp cites this decision as evidence that it did not threaten to manipulate customers’ ratings if they didn’t buy advertising.

However, a reading of the court’s decision shows that it’s not completely clear-cut in Yelp’s favor.  The court found that the plaintiffs had speculated that Yelp had written bad reviews on their businesses but never provided evidence to support the speculation, and that the businesses didn’t make a claim for specific damages so they couldn’t be awarded any damages.  The decision really doesn’t clear Yelp of manipulating ratings–it just says the plaintiffs didn’t prove them.

Of course, if you have resourceful lawyers, if a company with thousands of employees is manipulating reviews to sell advertising, the smart lawyers are likely to find an unhappy ex-employee to testify about what’s happening at the company.  The several suits that were brought appear to have used co-occurrence of purchasing or not purchasing advertising and changes in how reviews appeared on the site as their evidence of manipulation.


Yelp claims that the FTC investigated their operations, including how their software treats ratings for advertisers and non-advertisers, and informed Yelp that they did not intend to take any action.  However, no official documentation is cited.

Harvard Business School

Finally, a Harvard Business School study of Yelp was conducted.   They found that restaurants are more likely to write fake favorable reviews on themselves when they lacked a solid reputation of their own, as when they were starting, and they tended to write unfavorable reviews on their neighbors when the neighbors served similar cuisine.  More of interest to us, though, they found that “neither 1- or 5-star reviews were more or less likely to be filtered for businesses that we advertising on Yelp…”

This was an impressive study that used a very large amount of data from Yelp’s site, along with information about which companies were advertisers, from the site, and historical information about advertisers from Yelp.

The Bottom Line

Yelp advertising can be helpful–they’ll show your company name along with your competitors’ listings.  But what should you do if your Yelp salesman threatens you?  Be polite and make the business decision that you’d make without the threats.  Yes, he can personally write a fake negative review, but that one will be swamped by the positive reviews you normally get, and he will move on to his next prospect.

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