The ‘Marriage’ of Consumer Reviews and Yellow Pages

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!

This Post Has 5 Comments

  1. Teresha

    Consumer reviews and directories are not new, it’s only that it’s taken the IYP industry a very, very, very long time to catch up. Actually, I don’t think it has caught up yet.

    http://www.bizwiki.co.uk allows reviews. TripAdvisor.com has been allowing reviews on its vertical directory (hotels/attractions) for years and it’s worked brilliantly. Yes, some hotel chains pulled out but can businesses really afford to pull out of popular directories just because of a few negative reviews? Do publishers and product/brand owners pull out of Amazon.com sales because people give the books, games or toasters the thumbs down? Or do they need to be on these popular portals/directories because that’s where people go to find out about the hotel/book/game or dare I say it – company?

    Traditional yellow page publishers are worried about advertising dollars going elsewhere if a client gets cold feet due to negative reviews. But I say bring it on! Negative reviews show that the site is a credible source of information and web users are savvy enough and used to online reviews enough to know that one negative review does not paint the whole picture.

  2. Mike Boland

    Good thoughts Teresha, this is right in line with our thinking on many points.

    IYPs are realizing this opportunity, but are a bit late to the game. To your point, it was argued by Jill Hammond during the panel that we’ve passed the point that negative reviews are a detriment to advertiser relationships. That can still be true she says but we’ve reached the tipping point where the advantages (or sometimes competetive necessity) to integrate them outweigh this concern.

    The bigger concern, as expressed by Yellowbook.com’s Alfred Chow, is that the wanting numbers of reviews and inconsistency across categories (weighted towards bars and restaurants and lacking in service categories), will lead to an inferior product.

    He’s not convinced yet that reviews are a mainstream phenomenon, enough to garner the volume of content that would meet the quality standard of a product that yellowbook would launch. Fair enough. But I believe they will come around soon.

    Lots of other dynamics here. Read past coverage of UGC by clicking on the “user generated content” category link on the right column (or follow link below). And thanks for reading and commenting.

    http://blog.kelseygroup.com/index.php/category/user-generated-content/

  3. Alfred Chow

    I think most IYPs are over the fear of potentially losing an advertiser due to a bad review. As I stated at the panel, yellowbook.com just wants to make sure that if we were to implement R&Rs, it will be of true value to users and not just as check mark on our to do list. I’m OK with an advertiser getting bad reviews. However, the reviews must be credible. Credibility can only be achieved by many in-depth reviews. Unfortunately today, users often encounters one review that is often not even a sentence. This kind of review serves no value to both users and advertisers.

  4. Mike Boland

    very good point Alfred. Telling of the diligence and quality standards for product integrations and launches at Yellowbook.com. Though reviews have value and are becoming a standard, many local search destinations will integrate them in haste. I respect your position

    similar thoughts expressed in a past blog post:

    http://blog.kelseygroup.com/index.php/2007/06/14/ugc-to-be-or-not-to-be-iv/

  5. Rick Zwetsch

    Steve,

    Realize your post was 6 months ago but I’m just seeing it now.

    I don’t think your interpretation of the Restaurant.com program is correct. To qualify my comments, I served as one of their Regional Sales Managers from 2002-2004 and the program may have changed in the last few years. While the customer that purchases a $25 gift certificate for $10 has the “opportunity” to leave a review – they don’t “submit a review for $10”. There’s no obligation on the customer to provide a review in exchange for the certificate value and/or cost.

    The true value to the restaurant operator was and still is acquiring a customer for their “food cost” on the $25 certificate they give to Restaurant.com. A cost that is only incurred when and if the customer redeems the gift certificate. The obvious value to the customer is walking into the restaurant with a $25 certificate that only cost them $10. A bona fide customer review was the cherry on top – although I was never convinced the restaurant operators valued the reviews all that much…if at all.

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The 'Marriage' of Consumer Reviews and Yellow Pages

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!

This Post Has 0 Comments

  1. Teresha

    Consumer reviews and directories are not new, it’s only that it’s taken the IYP industry a very, very, very long time to catch up. Actually, I don’t think it has caught up yet.

    http://www.bizwiki.co.uk allows reviews. TripAdvisor.com has been allowing reviews on its vertical directory (hotels/attractions) for years and it’s worked brilliantly. Yes, some hotel chains pulled out but can businesses really afford to pull out of popular directories just because of a few negative reviews? Do publishers and product/brand owners pull out of Amazon.com sales because people give the books, games or toasters the thumbs down? Or do they need to be on these popular portals/directories because that’s where people go to find out about the hotel/book/game or dare I say it – company?

    Traditional yellow page publishers are worried about advertising dollars going elsewhere if a client gets cold feet due to negative reviews. But I say bring it on! Negative reviews show that the site is a credible source of information and web users are savvy enough and used to online reviews enough to know that one negative review does not paint the whole picture.

  2. Mike Boland

    Good thoughts Teresha, this is right in line with our thinking on many points.

    IYPs are realizing this opportunity, but are a bit late to the game. To your point, it was argued by Jill Hammond during the panel that we’ve passed the point that negative reviews are a detriment to advertiser relationships. That can still be true she says but we’ve reached the tipping point where the advantages (or sometimes competetive necessity) to integrate them outweigh this concern.

    The bigger concern, as expressed by Yellowbook.com’s Alfred Chow, is that the wanting numbers of reviews and inconsistency across categories (weighted towards bars and restaurants and lacking in service categories), will lead to an inferior product.

    He’s not convinced yet that reviews are a mainstream phenomenon, enough to garner the volume of content that would meet the quality standard of a product that yellowbook would launch. Fair enough. But I believe they will come around soon.

    Lots of other dynamics here. Read past coverage of UGC by clicking on the “user generated content” category link on the right column (or follow link below). And thanks for reading and commenting.

    http://blog.kelseygroup.com/index.php/category/user-generated-content/

  3. Alfred Chow

    I think most IYPs are over the fear of potentially losing an advertiser due to a bad review. As I stated at the panel, yellowbook.com just wants to make sure that if we were to implement R&Rs, it will be of true value to users and not just as check mark on our to do list. I’m OK with an advertiser getting bad reviews. However, the reviews must be credible. Credibility can only be achieved by many in-depth reviews. Unfortunately today, users often encounters one review that is often not even a sentence. This kind of review serves no value to both users and advertisers.

  4. Mike Boland

    very good point Alfred. Telling of the diligence and quality standards for product integrations and launches at Yellowbook.com. Though reviews have value and are becoming a standard, many local search destinations will integrate them in haste. I respect your position

    similar thoughts expressed in a past blog post:

    http://blog.kelseygroup.com/index.php/2007/06/14/ugc-to-be-or-not-to-be-iv/

  5. Rick Zwetsch

    Steve,

    Realize your post was 6 months ago but I’m just seeing it now.

    I don’t think your interpretation of the Restaurant.com program is correct. To qualify my comments, I served as one of their Regional Sales Managers from 2002-2004 and the program may have changed in the last few years. While the customer that purchases a $25 gift certificate for $10 has the “opportunity” to leave a review – they don’t “submit a review for $10”. There’s no obligation on the customer to provide a review in exchange for the certificate value and/or cost.

    The true value to the restaurant operator was and still is acquiring a customer for their “food cost” on the $25 certificate they give to Restaurant.com. A cost that is only incurred when and if the customer redeems the gift certificate. The obvious value to the customer is walking into the restaurant with a $25 certificate that only cost them $10. A bona fide customer review was the cherry on top – although I was never convinced the restaurant operators valued the reviews all that much…if at all.

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