According to Yelp, it’s doing just fine with its advertising customers—should you trust them?
If you dig into the company’s numbers, says Internet & Media Sector Head Hesham Shaaban, it appears they are glossing over a very important factor.
In a nutshell, advertisers don’t appear to be sticking around very long at Yelp. Part of the reason could be their return (or lack thereof) on their investment. Yelp touts an impressive 269% ROI for local advertisers. But if you read the fine print, that appears to be a stretch.
According to Shaaban’s research, that number is pulled from leads, not conversions.
“By assuming revenue based off of leads, you’re assuming 100 percent conversion off those leads, which obviously doesn’t make any sense,” he says in the video above.
Even the number of leads is misleading, as Yelp may be double counting leads, failing to take into account multiple leads from the same visitor.
“These leads are not mutually exclusive. All of these are not necessarily one person. You can make a mobile call and look for directions,” Shaaban says. “All of this said, the ROI metrics are obviously misleading, if not, intentionally misleading.”
Watch the video above for more.