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Does Yelp Fleece Advertisers?

Does Yelp overcharge advertisers? VentureBeat -- which reports that the business review site charges upwards of $600 a CPM -- says yes. TechCrunch says no. “Yes, [Yelp] ads are expensive, especially for low-end restaurants,” it writes. “But for lawyers, dentists, jewelers, and mechanics with a high lifetime average revenue per customer, turning someone searching for their services on Yelp into a loyal customer is no rip-off, it can drive big ROI.”

VentureBeat also takes issue with Yelp requiring 12-month commitments to lock in lower CPM rates. “For online advertising, I strongly recommend against commitments and impression-based advertising,” VentureBeat’s Rocky Agrawal writes.

TechCrunch, meanwhile, makes the point that Yelp built its ad business by attracting users that know what they want, just not who to buy it from -- “exactly when ads are most effective.” Furthermore, “Yelp sits at the end of the purchase funnel in the demand fulfillment stage,” TechCrunch insists. “Users often already have a need for a business’ services and are prepared to spend.” Agrawal compares Yelp ads to Facebook ads, which, TechCrunch adds, doesn’t make sense because Facebook users aren’t actively looking for the service the advertiser is selling.

 


Read the whole story at Venture Beat »

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