In fourth quarter 2007, Google kicked-off their local advertising strategy with a symposium for perspective media partners. Representing my former employer Entercom Communications (NYSE: ETM), an operator of 110+ radio stations, I was invited to Google’s Sunnyvale corporate head quarters for two days of meetings and presentations. The Four Seasons hotel room and red carpet treatment were nice, as well as the special events.
Heavy-hitters from a variety of Internet media conglomerates joined the party, listening to hours of Google advertising pitches. Participants included the major yellow page directories, newspapers, television groups, ecommerce sites, large search engine marketing firms, as well as other radio broadcasters. My hunch turned out to be right; the only guy wearing a suit was from television… but that’s another story.
Google’s message was clear: Monetizing local search advertising was an immediate objective for Google, and their tactic was partnering with existing media companies to leverage their sales forces. In all fairness to Google, its strategy made sense and still does. The internal support provided to partners was exceptional. But Google’s revenue goal to receive partner supportwas aggressive. Some attendees from traditional media struggled with the fact that the typical 15 percent agency commissions—the age old advertising agency standard—was not part of the equation. Google wanted to keep the upside without really sharing. It felt like the “partner with us now or miss the bus” scenario.
Traditional media companies, looking to recoup revenue lost to the internet, took the pitch seriously. Web developers and search engine marketing companies like Formic and Anvil Media are projecting strong growth, even in a slow economy. How could these media companies and publishers turn the dramatic shift to Internet media from a negative to a positive?
The most desperate prospects hopped on quickly – the yellow pages directories including juggernaut BellSouth – for example. Now with Google’s help, your yellow pages directory representative may now resell Google Adwords, but has to pass an on-line certification test first. Another yellow pages company will now design and host your website, and provide hundreds of visitors, for just $60 a month (although a twelve month contract is required). That leads to a few key questions: “Where exactly does the traffic come from?” and “What templates can I choose from?” or “Do I get a discount on the phone book print ad?”
Google’s success selling Adwords locally through traditional media partners is not clear. Hearst-Argyle television group also signed on immediately, but additional announcements are difficult to find. Website development and advertising firms, including Adready.com, have become partners.
Probably the most interesting Internet reseller is ReachLocal.com. The venture-backed search engine marketing firm is very aggressive, opening sales offices throughout North America, and the United Kingdom and Australia. Interestingly they also have relationships with the same yellow page directories being courted by Google. ReachLocal.com employs a director selling approach, hiring sales representatives in each local market. Judging by the continual follow-up by a ReachLocal.com recruiter and pleas for referrals, finding good search sales talent is a difficult task.
Yahoo has a large office in Hillsboro, Oregon outside Portland. Before joining Formic Media, I interviewed there. Interestingly Yahoo has targeted the same local opportunities as Google, but through direct sales. Yahoo is proactively telemarketing to small-midsize advertisers, selling search listings and Yahoo advertising opportunities. I like Yahoo’s personalized strategy. Their brand may be damaged in the search and investment industries, but it carries weight with small businesses looking for help.
The direct sales model for local Internet advertising is not new. In the social media space, Myspace.com has been selling an obscene numbers of banner impressions for $5,000 per month. For one large auto dealership, the immediate return was great. Then the reach and frequency taper began and they quickly cancelled. The point is that social media websites have experimented with direct sales also.
Now that local internet advertising has become hot, expect more cold calls from search engine optimization companies, and the publishers directly. They may have familiar names like Yahoo and Super Pages. Some will commoditize search engine marketing and internet advertising. Others have reach issues (not enough targeted unique registered users). Remember that no two visitors are the same. Formic Media is different; instead of cold calling we work on referral and employ a consulting approach.
Experience really counts in the end, especially if your goals and objectives are clear. Hiring a consultant with broad Internet media experience is worth paying for. Formic Media, a search engine marketing (SEM) agency for small and local businesses, is lead by seasoned SEM professionals Kent Lewis and Royle Johnson, are happy to advise clients on implementing a local search advertising campaign that works. Each has 10+ years managing search campaigns for clients following careers in traditional agencies and media. Visit our Web site for more information.