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Yelp, which plans to double its online and offline marketing spend to $20 million in 2015, will “win” in the long run despite Google’s “roadblocks.”
That’s the view of Yelp CFO Rob Krolik, who spoke at the Piper Jaffray Technology, Media and Telecommunications Conference in New York City March 11 and discussed Google’s algorithmic tweaks and the alleged roadblocks that Google presents to Yelp’s users.
“Consumers are fighting through their [Google’s] content to get to ours,” Krolik said, referring to the Google Local Carousel and other Google products that often get prime display space over organic results.
No Love Lost
Yelp, which gets more than 50 percent of its traffic from Google, has been a frequent Google critic.
When Google changed its alogithm in the second quarter of 2014 it adversely impact Yelp’s international traffic but in the U.S. traffic increased because of the quality of Yelp’s content, Krolik said.
The fact that 65 percent of Yelp’s searches now come from mobile makes Yelp “a little less reliant” on Google, he said.
On the competitive front, Krolik said Yelp is differentiated from players such as TripAdvisor because Yelp has a community manager in each market and a broader array of content. It’s not a “technology solve” but a “community solve,” Krolik said.
“We will win over time,” Krolik said, pointing to Yelp’s community approach and partnerships with Bing, Yahoo, and Apple Maps.
On competitors other than TripAdvisor, Krolik essentially said Foursquare is a nonfactor as Yelp isn’t hearing much about Foursquare.
First TV Ads?
In outlining its plans to double marketing spend in 2015 to $20 million, Krolik said Yelp will experiment with offline advertising this year, including outdoor and TV, and is considering running its first TV ads.
That $20 million marketing spend is modest. TripAdvisor, for example, plans to double its marketing spend this year to $60 million.
Yelp is an analytics-oriented company and has been discussing with other players how to measure the success of TV ads, Krolik said, adding that Yelp will seek to measure brand awareness.
While TV ads may lead to a revenue boost over the long term, Krolik doesn’t expect to see such a benefit right away.
Krolik addressed several investor concerns, including the fact that its number of unique visitors declined sequentially from the third quarter of 2014 to the fourth quarter, as did engagement metrics, attributing both to seasonality.
Uniques are one aspect of our business, Krolik said, adding “I don’t think it defines us.”
He talked up Yelp’s growth trajectory, saying the company’s revenue grew more than 60 percent in 2014 and will increase 50 percent in 2015.
Krolik said Yelp envisions becoming a $1 billion company in several years; its total revenue was $377.5 million in 2014.
If Yelp reaches that $1 billion goal then it likely will have solved that pesky Google problem that Yelp has been talking about for the past several years.