Generate Qualified Consumer Leads Using Yelp Ads

If you have a business profile on Yelp (which you should), chances are you’ve been contacted about enhancing your profile or paying for Yelp Ads. That poses the question, are Yelp Ads right for your business? In this article, we’ll take a deep dive into some statistics surrounding advertising on Yelp and what that could mean for your business.

TOC

• Yelp Demographics

• Top Industries

• Cost of Advertising on Yelp

• Yelp Ads Checklist

Advertising on Yelp can allow you to connect directly with potential customers that are actively ready to buy.

Before we can determine whether or not Yelps Ads are the right choice for your business, let’s understand Yelp as a platform first.

Yelp Demographics

While most advertising platforms like Google and Facebook have a wide variety of visitors and audience potential, Yelp is relatively limited. Yelp sees about 178 million new visitors each month, 97% of which make a purchase after visiting the platform. On top of that, 85% of Yelp users visit the platform without any intention of purchasing from a particular brand. They are solely there to see what they can find and compare businesses. Sounds great so far, right?

That’s where you need to understand the search intent of Yelp’s users. Here’s a breakdown of the top industries on Yelp:

1. Shopping - 23% of reviews

2. Restaurants - 19% of reviews

3. Home services - 12% of reviews

4. Beauty and Fitness - 9% of reviews

After understanding which industries get the most reviews on Yelp, you can see that 63% of Yelp users are only active with 4 different industries. This alone should not determine whether or not you use Yelp ads, but if your industry is not listed above, you should take a hard look at what your competitors are doing on Yelp.

More importantly, you need to understand which industries see the most success using Yelp Ads. As of March 2021, home and local services made up 63% of all advertising revenue for Yelp. That comes out to about $141 Million in just three months. That leaves the remaining 37% to split among the other top industries.

Top Industries

Yelp’s Top 8 Industries for Advertising:

1. Plumbers

2. HVAC

3. Legal Services

4. Health and Medical

5. Beauty and Fitness

6. Restaurants

7. Automotive

8. Hotels

Plumbers actually perform so well on Yelp that they created a special advertising package that is only available to plumbers that work with a Yelp Advertising Agency Partner.

So, what if your business in not among any of these industries?

Chances are, you’ll have better luck using Facebook Ads, Google Ads, or LinkedIn Ads. I would still suggest checking out what your competitors are doing on Yelp first, though.

Costs of Advertising on Yelp

The only concern you should be aware of when considering advertising on Yelp is the massive variance in ad costs. Some advertisers see a CPC (cost-per-click) as low as $0.30, while other advertisers have experienced CPCs well over $40.00 per click.

As you could have guessed, the lower costs are seen in the most popular industries on Yelp. Industries that provide consumer services are most likely to see costs below $1.00 per click, while B2B companies are most likely going to have to pay hundreds of dollars before getting a qualified, tangible lead.

Businesses can advertise on Yelp for as little as $150 a month, but your results will depend on your industry and your competitors. A nice thing about advertising on Yelp is that your costs are only affected by local competitors. That means that if you are one of the few companies advertising in a popular industry in your area, you will be less likely to spend an overwhelming amount to outrank your competitors.

Before choosing a budget for your Yelp Ads, it’s important to know what your competitors are spending. If you don’t spend enough, your competitors will outrank you virtually every time, driving your costs up. If you spend too much, you will outrank your competitors every time, but you will drive your costs up as you could achieve the same result with a smaller budget.

Yelp uses a pay-per-click (PPC) model for their advertising, so while you’re only paying for every click you get, it will cost more in some areas and industries to get a click than it will in others. It’s important to understand how Yelp’s PPC model works before jumping right into their advertising program.

While businesses that advertise on Yelp generally get charged per click, the amount of monthly impressions they get play a major role in that cost. Industries with less user activity will see higher costs because every advertiser has to bid more on the few potential customers using Yelp in that industry. That means you should make sure your potential impressions will be high enough that your costs will be reasonable.

Here’s how to calculate your potential costs:

Budget / (Monthly Industry Searches / Local Advertisers) = Projected Cost Per Impression

For example, let’s say your industry gets 10,000 searches in your area each month. For simplicity sake, let’s say you have 6 major advertisers, including yourself, all with similar budgets around $400. That means each advertiser would have relatively the same opportunity to reach 1,667 impressions. With a budget of $400, that would leave you with a cost per impression of $0.24. That’s not even taking into account clicks, so best-case scenario you get a 10% click-through-rate (CTR), generating you 167 clicks for the month. That would give you a $2.40 cost-per-click.

Although this formula is not guaranteed to give you a spot-on representation of what your projected ad costs could look like, it’s much better than taking a shot in the dark.

Yelp Ads Checklist

Before deciding to advertise on Yelp, make sure you answer “yes” to each of the following prompts.

1. You are in a consumer services industry

2. Your competitors are advertising on Yelp

3. You can reach at least enough users each month to make a reasonable CPC possible

4. Your competitors’ ad spend is not more than you can afford

5. You have a complete Yelp profile with at least 30 reviews or more

6. Your Yelp review score is 4.3 or greater

If you did not answer “yes” to all of these prompts, weigh your other options or consult with a local Yelp Agency Partner about what the right decision for your business is.