Local Reviews, Google, and Zagat

September 20, 2011 • Blog, Local, Search, Social • Views: 213

On September 8th, Google announced the acquisition of local ratings and reviews company Zagat. Zagat has been in business for more than 30 years, and has been dubbed “the original local reviews provider.”

This deal is important for Google, and has a broad impact on the whole field of local marketing. With this acquisition, Google is now in the content publishing business, a field they have traditionally avoided, in favor of content aggregation.

Owning Zagat also puts Google in a much stronger competitive position against companies such as Yelp, which currently dominates the local reviews industry. This greater focus on reviews also implies that Google will not only continue to value reviews strongly for local rankings, but that reviews could actually grow in importance as a local ranking signal.

Reviews and Local SEO

In order to understand the full impact of the Google – Zagat deal, we first have to cover the impact of reviews from a local SEO perspective.

In local SEO, as in traditional SEO, there are both on-site and off-site ranking factors that play into a listing’s overall search engine position. Local SEO’s on-site factors include basic website SEO, as well as claimed listings, optimized category selections, and so forth.

Off-site ranking factors also play a critical role in local SEO. To achieve high rankings, a business needs citations (mentions of the business around the web), backlinks to the business website, and reviews.

Broadly speaking, the more reviews a business has, the more highly it will rank. Google sees businesses with reviews as being popular, authentic, and trustworthy. Google assumes that a business with a large amount of user reviews must be a real, legitimate business, that deserves to rank well.

Apart from the purely SEO perspective, reviews are also a key driver of online-to-offline conversions. Studies have shown that reviews are one of the most-used features of local business profiles. Having a strong base of reviews will not only help drive rankings, but also actual customers.

The Local Reviews Industry

The Zagat acquisition marks another stage in Google’s review-focused local evolution. While this deal is a competitive move against Yelp, it is interesting to note that Google previously tried and failed to acquire Yelp itself.

In the aftermath of this failed deal, we saw tensions rise between Google review providers. In the past, Google’s Place pages were often heavily populated with reviews from Yelp and similar sites. While this worked for Google, review providers saw it as unfair usage of their content, and we saw frequent ups and downs in the Google – Yelp relationship.

Recently, we saw Google totally redesign their approach to local reviews. 3rd party reviews were greatly reduced in importance, in favor of Google-only content. While some speculated that this change signified that Google would be placing less value on reviews, the Zagat acquisition proves that this is not the case.

Instead, we have seen an evolution in Google’s local content strategy. Google is aware of the huge value of reviews, but it is also clear that Google can’t rely on “borrowing” 3rd party content to fill the gap.

Buying Zagat gives Google the content they need, but the acquisition is not based on content volume alone. In fact, as Yelp employee Luther Lowe tweeted, Zagat’s content does not even begin to rival Yelp’s massive body of reviews.

However, Zagat gives Google a huge amount of brand trust and credibility. An ongoing problem in the reviews industry is verifying the quality of reviews. Were positive reviews influenced by the business owner? Were negative reviews placed by competitors? And in general, are user reviews high-quality, expert opinions, or just noise?

Integrating Zagat helps Google solve these problems. Former Zagat employee Ryan Charles commented, “Imagine if you could have Zagat poring over Google reviews from every city in the US? If you pair the Zagat brand with the strides being made by Google in local, then you add a layer of credibility that Google couldn’t hope to produce on their own. The Google Places window decal instantly acquires meaning.”

While this deal is a boon for Google’s local efforts, it does little to clarify the space for marketers. Clearly, this emphasis on reviews is a signal to businesses that building a base of quality, user submitted reviews is a critical element for local success. For businesses that either did not understand, or did not prioritize, review building efforts, the Google – Zagat deal should provide the impetus to integrate reviews into the overall local marketing picture.

In terms of the competitive landscape, this acquisition will add fuel to the fire in the ongoing Google vs. Yelp rivalry. There’s no clear winner yet, and it seems unlikely that one will be determined in the near future. As usual in local marketing, we find multiple, highly fragmented channels, each requiring independent optimization efforts. The days of Yelp reviews carrying over to Google are over. Now, marketers will have to treat Google Places not as an aggregator, but a platform requiring unique content efforts to be successful.

 

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