Why AT&T;, Comcast, or Charter Should Buy Yelp

With all the recent technological changes in the advertising world, can marketers using TV as a platform sit back and let the advertisers come to them?  Unfortunately, it’s not quite so simple, and that is why TV networks should be looking at Yelp as an acquisition target, shares Nathan Labenz, CEO and founder of Waymark.

The media business is living through interesting times. 

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It may be the “golden age” for TV content, and Americans are watching more than ever, but the TV advertising business has struggled.  While Facebook and Google have scaled their platforms to millions of advertisers over the last decade, the largest TV advertising platforms (Comcast Spotlight and Spectrum Reach) have posted flat or even declining revenue, and remain stuck below 50,000 advertiser accounts nationally.

Also Read: How YouTube Is the Surprising Secret Weapon for Smart B2B Advertisers

What accounts for such divergent results?  For starters, Facebook and Google have reduced barriers to entry and delivered higher, more measurable ROI via an ad-tech stack that combines personalized experiences, algorithmic optimization, verifiable attribution, and self-serve ad buying.  But now, with the rise of addressable TV and multiple TV companies piloting self-serve ad-buying platforms – not to mention Facebook going in reverse and Google focusing on other issues – the gap in technology and data is finally beginning to close.  Fast forward to 2021, and TV campaigns will be nearly as accessible and affordable for local advertisers as Facebook and Google are today. 

Does that mean TV platforms can sit back and let the advertisers come to them?  Unfortunately, it’s not quite so simple.

One of Facebook and Google’s most under-appreciated advantages is the strength of their consumer reviews platforms.  These products, which appear prominently on Facebook Pages and in Google search results, have such influence with consumers that local businesses are effectively forced to pay attention.  In today’s world, small businesses are (rightly) coached to create a Facebook Page and a Google My Business listing, and to build a credible base of customer reviews there, regardless of whether or not they plan to advertise.  Naturally, after investing precious time and energy in these platforms, business owners think of them first for advertising purposes as well.

TV companies rival Facebook and Google in terms of audience size and time spent, but they do not have a property that forces local businesses to pay attention, and as a result, they struggle mightily to activate local advertisers.  To change this, TV companies must not only continue to improve their advertising products, but find a way to command real mindshare among small business owners.

Also Read: Want to Stop Wasting Money? Break out of Video Marketing Silos

That’s where Yelp comes in.  Yelp is the only other consumer review platform with enough scale and influence with consumers to force local businesses to pay attention.  (There are some vertical-specific review sites that matter too – Zillow in real estate, several in auto – but none with Yelp’s breadth.)  My sister, for example, manages the top-ranked sushi restaurant in metro Detroit, and Yelp is critical to her success – she checks it nightly after work.  And yet, Yelp has struggled to build its own advertising business, partly because many business owners distrust Yelp, but more fundamentally because people check Yelp, but don’t hang out on Yelp, limiting both the number and value of Yelp’s advertising impressions.

Combining a leading TV ad platform with Yelp would solve the biggest problems that each currently faces alone.  A TV company that acquires Yelp would immediately gain a high-engagement relationship with a majority of American small businesses, and could leverage Yelp’s rich dataset to create streamlined paths to TV / OTT advertising.  One of the virtues of Yelp’s current ad product is that it requires no creative work to get started – Yelp simply includes your business listing, including a star rating and featured review, as a sponsored search result.  TV commercials are of course much harder to produce, but Yelp’s review content has the potential to make it much easier.  Local TV commercials featuring customer testimonials are super common and effective, after all – so it’s easy to imagine a product that automatically converts Yelp reviews and photos to a beautiful, compelling TV commercial.  Such products already exist, in fact, and deploying them in this way would put TV platforms in position to activate advertisers as efficiently as Facebook & Google do today.  And on the flip side, as a subsidiary of TV company, Yelp would be free to focus on what it does best – collecting and curating customer reviews and helping consumers discover new local businesses – without worrying so much about monetization.

Over time, this combination would get stronger and stronger.  Small business owners are always asking “how do I know this ad worked?”, and TV advertising can be tough to measure, but Yelp profiles are already set up to track search volume, page views, and clicks to website, and can even power online ordering.  Longer term, as the TV industry continues to shift toward addressable and programmatic solutions, this same tracking capability, which includes 100M mobile installs, would enable better ad targeting and more powerful conversion optimization for many businesses.  And with a little creativity, entirely new consumer experiences could be created – imagine sitting down to watch a game and being offered food delivery from top-rated restaurants with the click of a button, scheduled to arrive at halftime.

Also Read: TV Ad Agencies Must Prepare for a Multiscreen Future

Bottom line: acquiring Yelp would be a shortcut for a TV platform that wants to compete with Facebook and Google.  And with a market value of “just” $3B, Yelp is certainly affordable for the likes of AT&T; ($230B market cap), Comcast ($190B market cap), and Charter ($80B market cap).  That’s why, as these and other media giants position themselves to compete in the advertising industry long-term, I’ll be watching for headlines about Yelp.