The monster of Mountain View is shooting out a new program to attack the local-advertising market — a business long on promise and short on performance for a company accustomed to minting money. And Yelp, the local-reviews site, may be in Google's crosshairs. Google's snorefully named Local Business Referral program wants an Amway army of foot soldiers to go door to door to photograph and detail local businesses' operations — and, natch, "tell them about Google Maps and Google AdWords" for $10 a pop. A grassroots sales operation, but hardly the smartest. Yelp, by contrast, has a much more targeted approach for pursuing local businesses, letting its users point out the easiest marks. Google's endless stock of ammunition — in the form of cold, hard cash — may yet prevail, though. Here's how the combatants stack up.
Yelp is good advertising — but do you need to pay for it? Yelp's reviews can be far more effective marketing than an ad on the site. It's one thing for Yelp salespeople to get businesses to put stickers on their storefronts, but committing to advertising on the review site is another matter. In fact, businesses could advertise their positive Yelp reviews elsewhere without actually directing any money Yelp's way. Google, by contrast, offers a more straightforward pay-to-play ad placement. Advantage: Google.
- Google is everywhere. Yelp's strength in local search is also its weakness. It may be popular and highly regarded in San Francisco, New York, and other major metros, but Yelp has little reach, and even less appeal, to middle America. Google is ubiquitous, coast-to-coast, and has a better chance of building quality local search for mainstream Americans. Advantage: Google.
- Real salespeople cost real money. An army of foot soldiers paid per lead is far cheaper than Yelp's dedicated ad salesforce. And Yelpers are known for drinking on the job. Advantage: Google.
- Yelp depends on Google. Yelp doesn't have its own map technology, using Google's instead. The love affair is not mutual: Google had previously included business ratings from Yelp, but no longer. Now that Google has introduced its own ratings system, it's no longer directing traffic to Yelp. Advantage: Google.
- Community matters. Yelp's advertising-sales efforts are driven, like the site itself, by its community. Salespeople only call on a business once it's garnered positive reviews. Google has always fumbled the ball when it comes to community sites; users have a connection that's more utilitarian than emotional to the brand. Without deep data created by community input, Google is in the sad position of not using targeting to make its marketing efforts more efficient. Advantage: Yelp.
- This is Google we're talking about. As we've noted in the past, once Google identifies a market — especially a $10 billion one — it fumbles its way to dominance. Google execs may have ignored business reviews for a time, there may be gaps in its local data, and its strategy for reversing the situation may be lame, but that won't last. Google will focus on data which will improve local search and reviews which will, in turn, entice local businesses into directed advertising campaigns, and it will, ultimately, all be automated. Which means a little pavement pounding may not be such a bad idea in the meantime. Advantage: Google.