November 7, 2011
ReachLocal – Reviews: Is the Fox Guarding the Hen House?
On October 26, ReachLocal announced that Google had selected it as an AdWords Premier SMB Partner (Source, here). According to Google, “The Google AdWords Premier SMB Partner Program connects experienced AdWords partners with businesses that want expert help in creating, managing and optimizing their online advertising campaigns” (Source, here). What does this announcement mean, and what is ReachLocal for small businesses?
ReachLocal, AdWords, and the Fox Guarding the Hen House
ReachLocal is an AdWords partner, focusing on assisting small businesses use Google’s AdWords platform to target local searches. A small business in Pittsburgh, PA, such as a plumber, attorney, or hair salon might contract with ReachLocal to set up and manage a Google AdWords campaign. That’s all well and good but it speaks volumes as to the challenges Google faces in the local search market. First of all, AdWords was originally meant to be a self-service platform. The fact that Google now encourages small businesses to use a third party to manage AdWords speaks volumes about how poorly the AdWords interface is put together. AdWords is confusing, and many businesses do benefit from expert set up and management. That, unfortunately, adds a layer of cost and inefficiency to AdWords. Would that Google would make AdWords easier to use rather than promote an industry of sales-oriented vendors like ReachLocal… AdWords Express is such an attempt, but with its own problems.
Secondly, ReachLocal clearly does NOT offer search engine optimization (SEO optimization) services. This is the really egregious flaw in its business model. So when a small business reaches out to ReachLocal to run its AdWords campaign, there is clearly little if any discussion of getting to the top of Google for free using search engine optmization and a lot of discussion about getting to the top of Google using paid techniques. It’s a little like asking a brake mechanic to inspect your car’s brakes, and finding out (how surprising!) that you do need new brakes. There is a clear and present danger of the fox-in-the-hen-house problem here.
- Both Google and ReachLocal are heavily motivated to steer customers to paid AdWords solutions rather than free SEO solutions.
Reviews of ReachLocal – Does ReachLocal Work?
Is ReachLocal effective in its AdWords campaigns? Anecdotally, I have heard many satisified customers of ReachLocal with the caveat that they were discussions of AdWords, only. On the other hand, I have had many students of our courses come from AdWords “certified” vendors and have endured catastrophic AdWords campaigns. AdWords certification by Google, in my view, means little if anything. Poor match types, poor use of the Display Network – many very basic flaws can be uncovered in many campaigns set up by “AdWords certified” vendors. If you are using ReachLocal, be sure to take our Webinar on AdWords Gottchas, and make sure that at least a) your match types are set correctly, and b) your networks (Google vs. Display) are clearly segregated.
Beyond that, do a Google search for Reviews of Reach Local, and look for other customers sharing their experience. The problem here is that unlike with Yelp, Google Places, or Amazon, there isn’t a single forum where people can go and post reviews of AdWords consultants. So you are forced to “take the word” of your ReachLocal representative as to whether the service will be good or bad.
Metrics and ROI of ReachLocal – Review Reachlocal, Yourself!
Finally, if you decide to go with ReachLocal, make sure that your metrics are set up properly in terms of Google Analytics. You can essentially review Reachlocal yourself, if you set up proper analytics. Define your cost-per-click vs. cost-per-conversion to determine if you are paying more for a click than you are getting on average for a sale. Hal Varian has a great video on this concept (Hal is the Google economist). Run that idea past your ReachLocal representative, and if Bambi in the headlights greets you – that’s a warning sign. Compare the ROI of paid advertising on Google with the ROI of free SEO efforts. Paid advertising is quick, easy, and high cost out of pocket. Free SEO is a slower process, more sweat equity, so you must compare the human / hours cost of SEO vs. the dollars cost of AdWords. In my experience, free SEO is usually far, far higher return on investment than paid AdWords.
But – regardless – you need to put both SEO and AdWords in the mix. The fact that Google AdWords certified companies and consultants like ReachLocal are incented to promote paid AdWords, means that ultimately the fox is guarding the hen house at ReachLocal. Any consultant you use for your Internet marketing should be able to intelligently discuss SEO, AdWords, and Social Media Marketing – the three pillars of effective Internet marketing.
Any company like Reachlocal that specializes just in AdWords is suspect in my view. Foxes guarding hen houses is no way to set up an honest business.
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