Could nearby Pokéstops improve restaurants’ online reputation?

Abstract

PokemonGo, 2016’s most popular and profitable mobile game, promoted people’s physical activities and impacted local business by bring new-foot-traffic. Many restaurant managers used it as a marketing tool to improve their traffic, reputation and sales. PokemonGo seems to serve as a positive externality to sales performance and reputation of restaurants with Pokestops nearby and seems to bring positive spill-over to these restaurants. However, windfall is not always there. It is necessary to examine the effectiveness of PokemonGo as marketing tool for restaurants through the information platform Yelp. Our objective is to examine how PokemonGo impacts restaurants’ reputation on Yelp.com. By focusing on “Pokestop”, we conducted difference-in-difference estimation to investigate the change of restaurants’ online-reputation before and after the launch of PokemonGo and with and without Pokestop nearby in both long and short term. We found that in short-run, PokemonGo significantly boosted online-reputation for restaurants with Pokestop nearby by increasing their review volume, checkin, Elite review number and rating. In long-run, the impacts faded out with PokemonGo’s fading populairty. Yet surprisingly, rating in long-run are still significantly improved by the game. Additionally, Restaurant’s heterogeneity also influences PokemonGos’ effectiveness.