‘s ad revenues rise 14% as advertisers shift to performance marketing //

Yelp reported advertising revenues that were higher than expected in the second quarter 2023.

Advertising revenue has increased by 14% since the second quarter 2022.

The Street consensus was $325 million. However, the strong performance has helped to boost total net revenues up 13% on an annual basis.

Why do we care? This increase in advertising spending is good news for digital marketing as it indicates that trust and stability are returning quicker than expected following the recession triggered by economic downturn.

Breaking down numbers. Yelp has attributed its strong advertising performance to an increase in the average cost per click, which increased by 14% on a year-over-year basis. Yelp’s bosses also credited the company’s growth to higher average revenue per location in both services and RR&O.

A shift in behavior. Yelp’s bosses have noted a shift from brand advertising to performance marketing. According to the company, the latter allows marketers to monitor and track ROI more efficiently.

What did Yelp say? Jeremy Stoppelman praised Yelp in a recent statement.

• “Yelp’s record-breaking second quarter top-line results are a testimony to our increased product speed and consistent execution throughout the company. We achieved double-digit growth for the ninth consecutive quarterly.
• “Net revenue has reached a record high, driven by record revenue from advertising across all categories.” For the first time ever, self-service and multi-location advertising accounted for over half of our revenue. This milestone reflects our strategy to drive long-term growth through our most effective advertising channels.
• We are confident that we can gain market share, and create long-term shareholder value.

Get the full story. Read Yelp’s Q2 2023 earnings reports for more details.

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