It's a case of PR fighting PR: A battle royal is shaping up between one of the world's largest online review sites and a Hollywood publicist who literally wrote the book "Guerilla P.R." At stake is the brand reputation of Yelp.
Kaylie Milliken fired the first shot earlier this year when she released a two-minute trailer for her documentary, "Billion Dollar Bully," on Kickstarter. In it, Yelp is portrayed as a racket against small business owners and is even compared to the Italian mafia.
The reaction was immediate. A day after the trailer released, Yelp's stock slid. "It went down 4% and the media linked it to my trailer," Ms. Milliken said. "They have been pretty defensive and trying to discredit me and the film ever since."
Following Ms. Milliken's trailer, Yelp issued a brief statement saying, "The director has a conflict of interest, as she has a history of trying to mislead consumers on Yelp. There is no merit to the claims they appear to highlight, which have been repeatedly dismissed by courts of law, investigated by government regulators, including the FTC, and disproven by academic study."
The conflict of interest Yelp is referring to regards several reviews Ms. Milliken wrote – all under different accounts – six years ago for an attorney. Back then, she sought legal counsel and found a lawyer who had just opened his practice. Ms. Milliken was so impressed with his services, she said, that she felt compelled to leave him a Yelp review.
"I went on and left him a review," she said in an interview with Ad Age. "And it disappeared. I made another account and left another review. That review disappeared, too. I made three different accounts and all of the reviews disappeared."
Ms. Milliken later married her attorney and didn't think anything of her vanishing reviews. "It didn't bother me, but five years later, I started hearing similar things from my doctor about Yelp," she said. "I started researching and saw she wasn't alone; there were thousands of business owners who had the same story ... I mean, it's pretty ridiculous for Yelp to think that I have been holding a grudge for six years."
As her trailer continued to garner media attention, Ms. Milliken was eventually asked to be interviewed live on CNBC's "Fast Money." Yelp debated whether sending someone would somehow lend credence to the film but ultimately dispatched Shannon Eis, its VP-corporate communications. "Prior to the CNBC request, we decided we did not want to give this film credit," said Ms. Eis. "We did not want to take the bait."
"Most companies would say, 'This person has zero journalistic integrity. Why would we engage her?' Regardless of her lack of experience or alignment to journalistic morals, we decided that our brand is worth protecting."
The Yelp spokeswoman noted in the interview that Ms. Milliken has brushed aside two FTC investigations, a Harvard business school study and five federal judges who have all dismissed the accusations that Ms. Milliken has been making.
"There have been two [FTC investigations] and both have been dismissed," said Ms. Eis in a later statement. "This is not a fact that can be so easily dismissed by a filmmaker or anyone as the FTC really is exhaustive in their process. We were fully cooperative in their last investigation, which took a full year and looked at all areas of our business related to the claims being made."
In the TV inteview, Ms. Eis also brought up Ms. Milliken's "three sockpuppet accounts" that were used to leave false five star ratings for her husband's law firm.
"Her husband is also listed as the CFO for this production," Ms. Eis said. "The accusation that she is making she has actually been a part of on the backend. And the software process that we're talking about, that helps protect consumers and present true and authentic reviews, was something that triggered after finding her false reviews on the site and suppressing them."
Milliken gets 'a PR person'
Ms. Eis said Yelp wasn't fazed. "We had no public reaction and that mirrors our internal reaction," she said. "She has a PR person. I'm guessing she needs one. That is what we expect her to be doing."
Mr. Levine said he saw the interview on CNBC, adding that "Ms. Eis is a professional, and it looked like she knew what she was doing."
"When large companies, with large staffs and large payrolls, meet the unexpected they tend to like to control things," Mr. Levine said. "Their tendency, as a general rule, is to either underreact or overreact. In [the CNBC case], they responded with a lot of velocity and strength. They wanted to show their strength; that was certainly their prerogative."
The Hollywood publicist sent an intern to track Ms. Milliken down about one month after the CNBC episode. He said Ms. Milliken asked him if he would help her with public relations and marketing, but he added that his "role hasn't been fully determined."
Is Yelp's brand strong enough?
Gene Grabowski, partner at kglobal, said Ms. Milliken's documentary certainly has the potential to do a lot of damage to the online review site. "Just seeing that trailer can start rumors and doubts," he said. "People are naturally suspicious about Yelp and this film confirms a lot of people's suspicions. It can also feed into the conspiracy mentality because of the web. They have to defend their brand."
"If we look at Yelp and their preemptive strike on CNBC, that is standard operating procedure," he said. "Shannon Eis is a good spokesperson and the preemptive strike makes sense. At the same time [Mr. Levine] has a lot of credibility on his side. He clearly sees an opportunity to obviously make a profit. He knows how to get publicity. That actually can be very helpful to Ms. Milliken."
Mr. Grabowski said the documentary will likely see two fates, either the film will play out like "Blackfish" or "Fed Up."
"'Fed Up' was a documentary that came out two years ago about the sugar industry and Katie Couric was the executive producer. It was previewed at Sundance. It had a major release. And it went nowhere," Mr. Grabowski said. "It didn't tell us anything new. We knew sugar was bad."
About one year ago, Yelp was trading at more than $80 a share. Today, it fetches about $25.
"Yelp is certainly on the ropes in the stock market," said Mr. Grabowski. "Yelp needs to get some allies speaking for them to defend themselves. It is a delicate balancing act because they are bringing attention to this video in an oblique way," he said. "But they have no choice but to fight now. They have to act now to undermine this movie's credibility." There is no release date for the film, but it is slated for later this year or early next, according to its director.