Today at DDC, we saw a lively panel on Consumer Reviews — among the earliest and most widely used forms of UGC. Mike Boland’s intro used Kelsey data showing how much consumers want reviews on Web sites. Reviews have the most rapidly growing demand curve of all types of Web site content with more than 40 percent of consumers now saying they want them.
The panel consisted of two directory publishers (print/online combos), Yahoo! Local and Restaurants.com (“pick the one on this list that isn’t like all the others”).
Cary Chessick, CEO, Restaurant.com
Jill Hammond, Competitive Strategies and Innovation, R.H. Donnelley
Frazier Miller, Director of Product Management, Yahoo! Local
Alfred Chow, Senior Manager, Internet, Yellow Book
It proved an interesting mix. The two publishers were at almost opposite ends of the spectrum: Yellowbook.com being reluctant to submit itself to the vagaries and lawlessness of the UGC universe, and R.H. Donnelley shouting “Geronimo” and jumping into the deep end of the pool, after barely checking to see if it’s filled with water.
One could only smile when listening to Jill Hammond’s candid description of RHD’s brand-new foray into posting reviews — started just two weeks ago. She described RHD as “incredibly surprised” (and probably equally relieved) that (a) it’s getting a decent level of participation and (b) the world hasn’t ended. (Embracing UGC has got to be, from a cultural standpoint, a huge stretch for an “old school” directory publisher.)
Thanks also to Jill for articulating, almost off-handedly, one of the key reasons for RHD’s recent acquisition of Business.com: Work.com, a UGC management platform, was part of the deal.
Frazier Miller talked about the necessity of “engaging the user” and how this principle guided Yahoo! Local’s recent site overhaul. He also talked about some reviews as being a type of entertainment, and therefore subject to monetization models typically used for lightly engaged large audiences. Nobody Yelped at his assessment. (Hey, who didn’t enjoy reading a wicked, snotty restaurant review every so often by erstwhile NY Times restaurant critic Mimi Sheraton?)
You probably haven’t read any reviews published on Restaurant.com. There’s a good reason for that — you aren’t its primary audience. Instead, it obtains reviews from restaurant patrons who’ve just dined at a restaurant. It passes on these reviews, privately, to the restaurant owner. When you get right down to it, Restaurant.com is really not in the “review” game; it’s a producer and distributor of special-purpose intelligence for use in a closed-loop system.
Restaurant.com puts a creative twist on the monetization of this whole process. It obtains certificates from the restaurant with a face value of $25 (at no cost), and then sells them to the customer who submits a review for $10. So the customer gets $15 worth of future restaurant services in return for doing a review. Restaurant.com keeps the $10 received from the customer to cover its operations. The restaurant owner gives up $25 (nominal value) worth of restaurant charges in return for a bona fide review. Everybody’s happy.
All totally legitimate and of value to all parties involved. In fact, one has to ask if this model could be applied to other verticals — to obtain customer feedback in other contexts (medical care, legal services, house painting, etc.?).
So, how’s the marriage of consumer reviews with directories going? Don’t know yet — but it sure is fun being in the deep end of the pool!