Help, My Competitor is Yelp! Is the Local Review Space Big Enough?

The local review space is increasingly relevant to the modern day consumer. Long gone are the days where the only way you were recommended a business was through your friend’s sister’s friend with the hair salon or by calling your one foodie friend who happens to know every type of cuisine within a 10 mile radius – although you should probably still keep that friend around.

We decided to check out the health of the local review industry and examine some of the key players. Knowing that Yelp has been growing rapidly over the year (75% as of September) we decided to map it’s site against some smaller players.

It is clear that Yelp is dominating many players in the local review space, such as Zagat, Insider Pages, Judy’s Book, and Urbanspoon. While Insider Pages looked promising in June, the past six months seem to have determined a bleak future for the site. Judy’s Book has experienced 33% downfall this year and though Zagat has increased 15.5% this month, we are still waiting to see if there will be an earth-shattering aftermath from the Google acquisition.

When you remove Yelp from the equation you can see that there is one flower in the cement. Urbanspoon.com is up up 49% this year, although down .23% this month.

I tried to find the similarities in our data between Urbanspoon and Yelp to see what was making Urbanspoon, over all other local review sites, able to gain traction against such a dominant player. I started by examining the sites’ demographics:

Yelp

Urbanspoon

Zagat

I couldn’t help but noticed that Yelp and Urbanspoon have extremely similar demographics. You may think this is the just the demographic of the market who views local review pages, but interestingly enough, Zagat has an audience that is slightly more male dominated, older and of a higher income. Since there are fewer users online in the 100k+ income bracket, attracting this specific audience could verify why Zagat has a lower UV count.

Yelp isn’t so lonely at the top, however. Taking a look at CitySearch and Yahoo! Local, we find that Yelp has a few friendly competitors maintaining significant portions of the market:

It seemed Yelp would continue on its rapid growth and pass Yahoo! Local last month, but both experienced nosedives from general downward trend on the local review sites. We will have to take a look at the data next month to determine if Yelp has taken on reign of the local review kingdom and if Urbanspoon has made any significant threats in the space.

What do you think? Why are Yelp and Yahoo! Local such dominant forces in this space and will other companies be able to adequately compete with these top dogs? What is it about Urbanspoon that is allowing it increase its market share in an industry in which many actors (on the top and bottom) are experiencing a reduction?

About Jen Duguay:
Jen Duguay joins Compete to take on all things social media. She comes from a social issue background, most recently having worked for the Social Innovation Forum, the venture philanthropy arm of Root Cause, a nonprofit research and consulting firm. Jen's interests include singing, marketing, running, art, making guacemole, and using social entrepreneurship to tackle world issues. She has spent time in Belize and the Dominican Republic working on microfinance initiatives and recently traveled to Kenya where she studied the public healthcare system. Follow Jen @jenduguay on Twitter.

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  1. Brian Rothenberg

    Jen – I used to work within the Yahoo! Local group, and have been in the Local space for about 7 years, so I know the space fairly well. Yelp and Yahoo! Local get a tremendous volume of traffic from SEO (around 20M visits per month). With Google pushing further and further into their own search results with Google Places listings, there is often little room for more than 1-4 organic results on the first page for queries that these local reviews sites get traffic for. So there’s room for 1-2 dominant players in organic search (ie: Yelp and Yahoo! Local), but not many others for the most competitive, highest volume queries. That’s a big part of it in my opinion.

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