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?