Yelp Discontinues Ad Offering, Exposes Filtered Reviews

In the wake of lawsuits from small businesses claiming corrupt ad sales practices, local listings site Yelp has discontinued one ad opportunity and will add a new feature for advertisers.

The site will no longer offer its “Favorite Review” ad, which allowed businesses to pay to highlight a user review, which was marked as such.

“It’s clear that some people out there got the wrong impressions,” explained Yelp CEO Jeremy Stoppelman during a conference call this afternoon. “To take this out of the conversation, we simply decided to remove this feature.” Critics have suggested that Yelp gives preferential treatment to advertisers, including those who purchased the Favorite Review feature.

The company also decided to display “Filtered Reviews” – those reviews that in the past have been removed from the site because Yelp’s automated review screening process deemed them suspicious or inappropriate.

“This demonstrates that ads are independent of content. Advertisers are filtered just like non-advertisers are filtered,” said Stoppelman, suggesting the changes ensure content is “trustworthy and reliable.”

Recent class-action lawsuits filed by local business owners against Yelp allege the company extorts business owners for protection from bad reviews, and removes or relocates negative reviews or creates positive reviews for advertisers. The company says it does not manipulate review content.

Stoppelman played down the lawsuits during the conference call, and said they were not a factor in the decisions to make the changes.

“Despite our best efforts to educate consumers and the small business community, myths about Yelp have persisted,” wrote Stoppelman on the firm’s blog today. The changes “will make it even clearer that displayed reviews on Yelp are completely independent of advertising — or any sort of manipulation,” he continued.

In February, Samuelson’s Diamonds of Baltimore received a somewhat negative Yelp review, which is the only one featured on the company’s listing page. However, five positive reviews posted after the negative review was published were removed from the site. Now, as a result of Yelp’s changes, those positive reviews can be read by users who click on the “Filtered Reviews” link.

Whether displaying the filtered reviews – which still do not factor into a company’s review rating – will actually appease concerned advertisers is unclear. For example, the filtered reviews do not include any explanation as to why they were removed. They could provide some hints, though. Removed reviews of San Francisco’s Argentinian food stand Tanquito are positive, but some include similar language like, “You can definitely taste the love that they put in to these dishes,” and “you can see the love and quality they put into their food.”

In addition to exposing filtered reviews and removing the favorite review feature, Yelp also plans to let advertisers include video in slideshows. “This was something that came up again and again” during meetings between small businesses and Yelp’s business outreach manager, said Stoppelman. The company has also “created a Small Business Advisory Council whose members will provide Yelp management with guidance and perspective regarding the concerns of small business owners,” he wrote on the blog.