As Lawyers Swarm, Some Marketers with Yelp Problems Won't Sue

  |  March 12, 2010   |  Comments

Five reviews for Miller Honda were removed from Yelp this week, but don't expect the auto dealer nor its social media marketing firm to sue the local reviews site any time soon.

Five new reviews for Miller Honda of Culver City were removed from Yelp this week. But don't expect the auto dealer nor the firm handling its social media marketing to sue the local reviews site any time soon. Recent legal troubles have a lot of online marketers talking lately about the legitimacy of Yelp's services and ad offerings. And at least one law firm is on the prowl for new small business plaintiffs alleging Yelp removes legitimate positive reviews or posts negative ones if the companies don't advertise on the site. However, whether Yelp's legal woes will result in a drop in marketer or user interaction with the site remains to be seen.

Miller Honda has been handing out postcards to customers suggesting they post reviews to sites like Citysearch, MerchantCircle, Google, Yahoo Local, and Yelp. Five such reviews were removed from Yelp this week, according to Mark Fish, manager of social media at auto dealer group Group 1 Automotive, who handles online marketing for the California Honda dealer.

"I don't think they're being judicious in the way they take things down," Fish told ClickZ News. He said the reviewers were all new to Yelp, which may have snagged them in the site's filter which weeds out what could be fake reviews. "I think [Yelp is] being overly aggressive," continued Fish. "I've encouraged a client to go make a review, they're just getting into social media...and now they've got a negative experience on Yelp."

Yesterday Fish responded to Yelp's explanation for the review removal on Twitter, stating, "@Yelp I guess I'll suggest we remove @Yelp from sites like http://ratehondaculver.com."

"That was me being playful with them to say, 'Let's work this thing out, ' " he said. "I'm not going to take Yelp off of [the Miller Honda site]." Indeed, Fish said he's had a "good experience" with Yelp in the past, and has never been contacted by Yelp ad salespeople looking for an ad buy in return for good reviews. "They've been very fair and business like with me. I don't think they're big enough to be that nefarious."

But it's clear some do see Yelp's bad side. Law firm Girard Gibbs LLP spots a potential lawsuit in the negative experiences some businesses have had with the site. "Has your small business been impacted by Yelp's rating system?" asks a page on the firm's site dedicated to its "Yelp Legal Investigation." The national litigation firm is seeking businesses that have been contacted by Yelp sales reps offering advertising quid pro quos, or penalizing businesses that choose not to advertise by removing positive reviews or writing negative reviews. Girard Gibbs is running Google ads targeted to keywords including "Yelp lies" and "Yelp lawsuits."

Recent suits filed against Yelp on behalf of D'ames Day Spa and Cats and Dogs Animal Hospital, both California-based businesses, allege the reviews site removed positive reviews when ads were not purchased, and demanded payment in exchange for removing negative comments. Yelp CEO Jeremy Stoppelman has posted lengthy denials that Yelp engages in any such extortionist activities, calling the lawsuits without merit.

Though he's personally never been contacted by Yelp about advertising in exchange for positive reviews, Ron Samuelson thinks the allegations could cause marketers to think twice about the validity of the site. "I would think it would certainly have a negative effect on advertisers wanting to deal with a company they're seeing a lot of negative press about," said the CEO of Samuelson's Diamonds, a family-owned Baltimore business established in 1922. The jeweler recently received a negative review on Yelp and as a result has asked customers with good things to say about the company to post them on the site. "That's now going to be part of my follow-up process," he said.

In addition to fighting the allegations in courts, Yelp is also trying to burnish its reputation among small business owners. Yelp's business outreach manager Luther Lowe addressed the lawsuits at the recent SearchFest event in Portland, Oregon, according to Matt McGee, an independent online marketing consultant who attended the conference. While McGee said the trust Yelp has built among marketers could erode if the allegations perpetuate, he said some of his colleagues are "100 percent on Yelp's side and dismiss the lawsuit [because some people] plain just don't understand how [Yelp] works."

McGee also questions just how aware Yelp's users are of the lawsuits. "If they were aware of it, I doubt that a lot of them would even care," he said. Indeed, the allegations don't seem to have fazed Yelp's power users - the folks who regularly post reviews or "check-in" at various business locations using Yelp's iPhone app. Searches on Twitter for mentions of Yelp are dominated by check-ins to local restaurants and shops, and posts from consumers promoting their recent Yelp reviews.

"They've done an amazing job over the years of developing a real loyal group of users and reviewers," said McGee.

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ABOUT THE AUTHOR

Kate Kaye

Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.

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