So I know Yelp works in the San Francisco Bay Area. LA’s sprawl might hinder it down there, NY seems not to be catching on (at least slowly), and Canada and the UK seem as if they were failures, at least as of yet.  I don’t have numbers on this (which is, by the way, a TERRIBLE way to start a blog post), and Yelp is always beaming with monthly hit reports, but it still seems their critical mass is the Bay Area, while a foothold in other markets seems elusive.

Doing Bay Area hotel/restaurant advertising w/ yelp is, basically, a no brainer.  Because of the sheer page hits, it will likely lead to conversion.  The margin isn’t at obvious for restaurants, but I would assume it might be of interest.  If you do the math, paying their scale plan for ads at about $1000/month, you would really only need to convert one or two people into a couple room nights each. If your yelp page is getting 1000 views, it isn’t that far of a stretch that you could convert to get solid ROI. Even with 500 hits a month for a mid range hotel, it should be compelling to do the math on how many people need to book to pay for the expense of advertising on Yelp.  Yes there are ethical grey areas, yes there is a lot of flap about how yelp does business….. but the bottom line is that it may be worthwhile for your property.  However, that is in the Bay Area.  Let’s look nationally.

I notice in other markets that should be strong, like Portland, it isn’t really taking off at all.  It is a massive assumption that it *should* do well anywhere, and as of yet I haven’t seen it stabilize with a critical mass of users anywhere but major metropolitan areas, and depending on the definition of critical mass, that may also be conjecture.  With the population of New York, and the type of food town it is, Yelp should be a massive powerhouse.   Portland is a *wee* bit smaller, but you have tech/web savvy foodies galore in the area, and I would have just assumed it would be utilized more than it is in that market.

Now, as a user of yelp I have ridden the ups and downs of their botched marketing and PR, issues with ethical murkiness as well as their problematic algorithm, or inability to embrace crisis, etc.  Yelp is a great idea that is being run by young, inexperienced tech-youth, non-businessmen.  We are all new & inexperienced at some point, but it is our duty to be aware of that and grow accordingly.  I know this is the management style in much of 2.0, and much of the 2.0 crowd pejorativize the word businessman as “bad”, but there are simple decisions that could have been handled better with acumen garnered from real management/business experience, etc.  The concept of the “businessman” is being reconsidered, or at least looms, as sites attempt to monetize and gain a foothold of the share of social reviewers & content providers.

Enter OpenTable, how it can matter, and it’s own take on restaurant reviews: Guaranteed no fake reviews.  I don’t know how it works if you cancel a rezzie, or if you are able to rig the system, etc…. but in theory it works. Like Expedia, you are not able to write a review unless you have a confirmation of the reservation through the open table service.  This is far and away more credible than Yelp’s practices. What’s more important, in my mind, is opentable’s reach.  Besides being a functional software for restaurants and diners alike, it seems that it is reaching a critical mass that Yelp could only dream of.  Maybe it is the simplicity of the format… simple rating systems bolstered by simple reviews with a few short sentences, or maybe it is because it is more about food, and less about social networking or user generated content.  However, since they rolled out the ability to review, many people in the social media realm took notice.  I find it interesting that their reservation product garnered enough of a following that it’s foray into content generation sort of immediately took off, piling up reviews of restaurants with reviews that have massive legitimacy compared to Yelp.

Of course, comparing the two seems myopic…. Opentable isn’t a full review site with reviewer profiles, etc.  They both operate in a different realm, and I am willing to bet there are crossover users that have completely different purposes for the sites.  Just like facebook and twitter, some people likely use both for different reasons.  In fact, many would claim they are *entirely* different services, but Opentable is obscuring those lines.  They can move into reviewing fairly simply, while Yelp would be hard pressed to move into a reservations technology.  This gives Opentable a very interesting upper hand.  What I think is a real challenge to yelp is that 1) opentable offers verification and unheard of legitimacy in regards to reviews, 2) it has a market and reach/impact far beyond the Bay Area, and 3) they have a less shaky business model.  The margins are somewhat slim, and I am not sure I can do the overall math… but if you compare their user base to how many reviews they are churning out, that could be an issue for Yelp.  I may be way off here.  At the very least, 100% of those reviews, purportedly, are legitimate while yelp deals with endless shill review issues.

However, it is important to realize that just because Opentable provides credibility, it doesn’t mean that yelp isn’t a useful tool.  Pardon the negatives parade in the preceding sentence… I am just saying, Opentable is a bit more legitimized, while yelp serves as a different tool to interact and learn from your guest’s reviews.  Opentable hasn’t opened up their site to the more social side of the web, and in regards to that they aren’t creating a meaningful conversation or interaction between diners and restaurants, which is, to some extent, what social media is all about.  But if they choose to go that direction, it will definitely be an interesting development.

As I mentioned, Yelp in the Bay Area works, but if the National competition is to be had, Yelp might have it’s back to the wall.  In a foodie centric city in the Northwest, a brand new fine dining restaurant I am involved with has opened.  In the first month and a half, there was one yelp review, and 57 Opentable reviews.  The difference is massive.  The reviews are more succinct, the verification based off reservation is very comforting, and it comes along with a considerably more professional tone overall.

I am wondering your experiences with Yelp vs. Opentable, and if you find yourself trusting or interacting with one more than the other?  Please feel free to share your thoughts.  Until then, I might suggest to watch out for Opentable… having been around and surviving the web bubble in the dot com burst, they may just be the seasoned, professional medium to provide truly meaningful interaction and content, leading social user generated reviews into the 21st century.  In the end, it might provide the competition necessary to help social media mature, and become more functional than controversial.  Until that happens, Yelp will continue to be a vital tool to reach your consumers and guests.  It may be useful, but until people start anchoring their reviews to a real, legitimate profile…. it is nothing more than a sophomoric, juvenile Myspace like world.  One that you have to work with.

So…. do you know where yelp works outside of the bay area? AND…. do you think lends more legitimacy than yelp reviews?  Do you think Open Table could open up their reviews to interaction from ownership?

About Michael

5 Responses to “Yelp vs OpenTable reviews; Yelp is the Myspace of online reviews, but…..”

  1. Mike Redbord

    Nice post Michael. Helped me synthesize some of my thoughts on ugc review sites, too!

    Yelp does extremely well in Boston–their reviews are nearly complete for all types of businesses and it’s highly atypical to find a restaurant without a few lengthy reviews. The reviews are respected by local businesses and a bad review can really sink a new venture because all sorts of people rely on the reviews.

    The primary issue with Yelp reviews, as I see it, is not one of fraud or incompleteness but of its social networking elements. There’s a core group of users that define Yelp’s social clique online and offline and set the tone for the reviews. This social clustering is fine and natural, but what ultimately takes place is that all the reviews read as if from the same hivemind perspective: predominantly 25-35, semi-urban professionals who reference obscure phobias and 80s tv shows in their reviews. It’s honestly not a knock on Yelp but instead a sort of unavoidable consequence of its highly successful social model.

    Regardless of which demographic a review site represents, it degrades the overall quality and reliability of a review database to have content sourced from mostly one type of person. And even as a member of the Yelp demographic, I (perhaps obviously?) find it annoying to the point of not trusting the site’s reviews without another source providing independent confirmation.

    If OpenTable can bring light to a different demographic’s voice or just offer a slightly different perspective from that of Yelp, it’s of de facto value to the entertainment business and customers. Right now Yelp is by far the loudest voice in the entertainment review ring and more is better for everyone.

  2. Michael Hraba

    It’s funny, because I was vacuously assuming it was to Opentable’s disadvantage not having all the social networking stuff, but then I thought of their demographic… I am not sure people using it to book fine dining/mid range dining want to spend time cultivating a profile, reviewing, etc. It depends whether everyone thinks they are a foodie/critic yet? I do know chow hound gets into some pretentious bickering here and there…. and a lot of people fancy themselves an intelligent food critic. So it might actually be the real advantage of opentable, that they don’t open themselves up to the drama of yelp. I don’t see many things like this in regards to opentable. But that may not be fair…. your points on yelp’s issue actually being that they *ARE*, in fact, really successful with creating a social network. I note that yelp seems optimized like no other site, usually coming up in the top 5 organically…. which is certainly to their credit.

    And this is really good to know about it’s grip in Boston. Being such a young town with endless institutions of higher learning, etc… I am not surprised. But you have me thinking about the consequence of opening up a site to social networking. What do you think if opentable opened it now… started profiles, and allowed talk threads like chow hound, reviews, etc? Do you think the verification process would keep reviews legit, and then just give more background and relevance to the person who is doing the reviewing?

  3. Mike Redbord

    On OpenTable, I don’t know if a social element would play well. It’s the type of thing that always _seems_ to make sense to add to a site, then can be a costly endeavor and not really pan out. To your point about OpenTable’s existing userbase, I’d suspect your inkling is correct that a social element wouldn’t be too useful unless it hooked into FB (or other large existing network) and people could see where their friends are reserving tables. That is, trying to leverage that existing userbase into a new/separate network would be tough. So as a standalone social network (like Yelp, for instance), I have a hard time seeing OpenTable play ball.

    As far as socializing reviews in order to prevent fraud, critical mass is an effective way to deal with fraud–having 500 reviews and 10 outliers is a good sign to ignore those 10, veracity notwithstanding. Consumers understand this intuitively, I think. And if there is critical mass (57 reviews qualifies, as in your post) then the faces associated with the reviews aren’t even that important any more.

    Definitely agreed that OT is one to watch out for in the review space though…and that’s nice to see.

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