Yelp Completes Mobile Shift As App Usage Accounts For 70 Percent Of Views
The 10-year-old local info guide has surpassed 100 million reviews, while a University of Penn study touts Yelpers' impact on hospital quality.
Two years after Yelp began telling investors that it would race to catch up with consumers’ content preference for mobile versus desktop, the company cited several milestones during its Q1 earnings call that validated its progress.
“As the search landscape continues to evolve, we’re committed to helping consumers find great local businesses however and wherever they desire,” said CEO and founder Jeremy Stoppelman during the call that followed a relatively solid Q1 earnings report. “From starting as a desktop website in 2004, to receiving a mobile review every two seconds on average as of the first quarter, we’ve fully embraced the move to mobile.”
Local Revs And Mobile Apps Rise
In the first quarter, unique app devices grew 32 percent year of year, as app users accounted for 70 percent of pageviews. “With approximately 30 percent reach on mobile devices according to comScore, we still believe have a lot of opportunity to reach additional consumers,” Stoppelman added.
While the company’s net loss widened year-over-year, Yelp’s revenue rose 34 percent to $158.6 million, exceeding analyst estimates of $155.6 million. The gains largely came from local advertising revenue, which jumped 40 percent to $138.1 million during the quarter.
That lift in local ads appeared to bear out Yelp’s year-long strategy to abandon desktop-oriented national branded display sales in favor of a performance-based cost-per-click revenue model. Considering that Yelp’s typically on-the-go users come to its platform to search a specific kind of service, from restaurants to retail to even legal representation, the platform ultimately wasn’t much of a place for national advertisers to reach casual web browsers.
Local Doctor Guide
And as Yelp has noted in the past, the local guide site is about more than just finding the nearest restaurants (though, with the addition of food delivery app Eat24 firmly in place, food services remains a key category. More about that below.)
In a demonstration of the value of its users’ posted opinions, Stoppelman pointed to a University of Pennsylvania study of 17,000 Yelp comments on 1,352 medical facilities that found hospital patients’ Yelp reviews were considered more comprehensive than the industry average. The report even determined that Yelp reviews were contributing to overall hospital quality.
“Nearly 75 percent of U.S. Internet users reported looking online for health information in 2012,” said the study’s senior author Raina M. Merchant, MD, MSHP, an assistant professor of Emergency Medicine at Penn’s Perelman School of Medicine, and director of the Penn Social Media and Health Innovation Lab. “Forty-two percent reported looking at social media for health-related consumer reviews. Meanwhile, only six percent of Americans had heard of the government website where the HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) survey is reported, as of 2008. This divergence presents an opportunity for online consumer reviews to augment and even improve formal rating systems such as HCAHPS and increase their use in consumer decision making.”
Yelp’s Q1 Review
Yelp’s ability to take advantage of the increased importance of local discovery and location accuracy has helped to begin to turnaround doubts on Wall St. after the company reversed a decision last year to look for a buyer. At the same time, it faces increased competition from Google — a potential suitor at one point — as well as from YP, OpenTable, Seamless, and other mobile-centric local guides.
While the company has broadened its focus widely at the local level — as the University of Penn study shows — food services remain a major point of competition. To be sure, Yelp now has 20,000 restaurants using its SeatMe and Yelp Reservations service, but those remain small compared to OpenTable’s 32,000 restaurants that are connected to that platform’s 16 million monthly diners.
In the meantime, Yelp is working to expand its profile with consumers away from the mobile screen — via television ads and deals. The company ran its second set of $30 million national broadcast and cable ad buys during Q1 and while Stoppelman didn’t offer results, he claimed that “awareness familiarity, and consideration are at highest levels.”
Apart from that, Yelp hopes to realize a brand boost from a collaboration with the Food Network on a reality show called 12 Hungry Yelpers. The pilot will be released this summer, Stoppelman said.
“We believe staying at the forefront of consumers’ minds will enable us to increase awareness and usage over time,” Stoppelman told analysts.