In discussions with restaurant owners we quite often get asked why they should list their restaurants on online restaurant guides (ORGs). The easy and obvious answer is that online restaurant guides such as Zagat.com, RestaurantRow.com, Urbanspoon.com, Chow.com, Metromix.com, CitySearch.com, OpenTable.com, etc., increase the online exposure of those restaurants listed in the guide. But do they? And if so, how so? And how much do they help? This is really what the owner wants to know.
The answers to these questions are multi-faceted and require knowledge in quite a few areas. No wonder restaurateurs have a hard time coming up with them. So we’ll begin with the basics.
Five years ago many restaurants didn’t even have a website. Or, if they did, it was rudimentary and didn’t attract much traffic. Today, nearly all restaurants have websites. But a website that has no traffic is like a Lotus without an engine. It produces nothing and has diminished value. Restaurateurs, like many business owners, realize this and spend time, effort and money on building traffic to their site. This is called search engine optimization or SEO. They hire a company to optimize the site and initially they get results. The problem is that SEO is an ongoing endeavor requiring constant observation and change. Get the facts about Keedies see this.
One restaurant client of ours in New Orleans has a website that gets an average of 150 hits per day. That’s not bad for one restaurant. When the phrase ‘New Orleans Italian Restaurants’ is put into Google, the restaurant comes up first on left hand side of the page. This is the pot at the end of the rainbow in SEO isn’t it? However, when the phrase, ‘New Orleans Restaurants’ is entered into Google, the restaurant is nowhere to be found. The same result occurs with many phrases people would use in trying to locate restaurants in New Orleans. Most restaurant owners of individual units or a small 2 to 3 unit company cannot afford to hire someone to optimize the site on a constant basis.
But even if the restaurant did spend the money to do proper SEO on their site, they still cannot compete with the ORGs. ORG’s sometimes have a staff of people whose sole job it is to keep their guide coming up on the first page of Google around the country. Zagat.com, for instance, has links to every restaurant listed on the site, and links back from most. This alone propels the ORG in terms of its adherence to the criteria of the latest algorithms used by search engines. But the ORGs also have Google Ads, banner ads from restaurants, rich media content, and a whole host of SEO-friendly items. Individual or small restaurant owners lose the competition with the ORGs for the space on the search engines in most cases.
In addition, ORGs offer consumers interaction with their guide and features that individual restaurant sites cannot. Features such as the ability to write reviews, take surveys, find information about the metropolitan area, find out what else in going on in the city all make online guides an attractive place to do restaurant research. Features like these, especially the ability to write reviews, give the consumer power and satisfies their need to express their opinion.
VR National conducted a survey in the 3rd quarter of 2009 and discovered that more than 75% of consumers look for restaurants online. That number is significant but many restaurant owners might conclude that their web site will capture any potential customers looking online. However, when asked how consumers do research online we discovered that a restaurant web site is largely ineffective. Of the people that look for restaurants online over 80% use online restaurant guides versus doing a search on Google, Yahoo, Bing or another search engine. Only 18% use general search engines. And when those 18% do search on search engines, as stated above, the likelihood of a specific restaurant popping up on the first page is slim given the SEO capability of the ORGs.
So really what is happening in marketing of restaurants online? The trend is very similar to what occurred in the hotel industry over the last 10 to 15 years. We’ve all seen the ads for Travelocity, Priceline, Expedia, Hotels.com and other online travel agencies (OTA’s). What we don’t necessarily realize is that there are hundreds of OTA’s that are not advertised as heavily. The value proposition to the consumer is that if they book a hotel room through one of these OTA’s they’ll save money.
They’ll also be able to book airfare, a rental car and learn a lot about the city or area they are visiting. And yes, have the ability to write reviews. Do you see the similarity? As a result, OTA’s took approximately 70% of the online bookings away from the hotel web sites only to turn around and charge the hotel a fee for giving them the reservation. Hotels begrudgingly paid this fee. Today it’s about a 50/50 split between consumers booking directly on a hotel website and those that do so on an OTA.
The same thing is occurring in the online marketing of restaurants. As we’ve described above, online restaurant guides are giving the consumer more convenience and features than the restaurants can individually. They are also charging fees to the restaurant for online reservations that come through their guide.
The trend is clear. The smart restaurant owner will embrace the change and develop excellent relationships with every major national and regional ORG and make sure they are featured on that guide if possible, have menus, photos, virtual tours and every other tool available from that guide including a link to make a reservation online.
Restaurateurs would be wise to embrace this consumer shift and get out in front of it. Otherwise they’ll either find themselves playing catch up or watch their potential business go to a competitor restaurant down the street.