National Bureau of Economic Research – NBER – Says, Use Yelp

In this research paper from the National Bureau of Economic Research (NBER), the esteemed authors investigate the outcome of local restaurants and bars in a large region (Texas) in having or not having listings on Yelp. “Getting on the map: The impact of online listings on business performance.”

The abstract summarizes their conclusions – “We evaluate the extent to which small businesses maintain an online presence, looking at restaurant listings on a major online review platform. While the majority of restaurants have an online presence, we find that roughly 18 percent in our sample have no presence as of the end of 2017, despite being able to list their business for free. Using temporal variation in a restaurant’s online presence as well as a natural experiment arising from a data acquisition that led over a thousand businesses to be added to the platform, we find that maintaining an online presence is
valuable for small businesses. Establishing an online presence leads to a 5% revenue increase. Using data on customer reviews post-add, we explore potential channels that could explain why restaurants continue to remain offline despite potential benefits from digital representation. Consistent with models of voluntary disclosure, we find that businesses that had stayed offline until the acquisition ended up having lower ratings, on average, than those that added themselves or were added by customers.”

What does this mean? Having worked with thousands of digital marketing, communications and advertising partners over 20 years, we’ve maintained the same perspective – i.e. “an online presence is valuable for small businesses”. This report therefore supports conclusions we’ve arrived at  through more direct and long-lasting research, long before its publishing.

Therefore also this report supports the goal of WestXDC.com – to provide information immediately and currently useful to the regional business community, that can’t be found among traditional research and economic data organizations. This report isn’t useful.

It was published in 2022, with data up to 2017. The focus for “online presence” is on Yelp, which we’ve concluded over the years is (A) useful only for some businesses, (B) a very standard listing type among many popular directories, and (C) includes many “premium” options influencing visibility not covered by the authors. The final point is that online presence – and more specifically “establishing” it (i.e. a new website, etc.) is well known to be amazingly effective and required for revenue increase – if accompanied by a well-managed, integrated digital marketing strategy across many channels. These include email, SEO, social media, listing services (like Yelp), paid and placed advertising, influencer and SME forums, public broadcast and OTT (over-the-top of the TV, i.e. services like Roku) streaming, etc.

We invite the authors to discuss more, and can collaborate on more useful, timely and predictive research.

Share:

More Posts

Natural Colors for Spring & Summer

Warm weather calls for nature’s most exquisite hues—energetic yellows to distinct whites—to enliven your garden. As many plants are only available during specific windows of the year, you must take