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Wsj Calls Out 2 Small Biz Marketing Firms That Generate Many Complaints

ftc small business web marketing ppc reachlocal yodle google partners

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#1 earlpearl

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Posted 25 April 2014 - 11:48 AM

There are a couple of pretty well known firms that "do" local small business web marketing, have big flashy sales teams, do high volume, have gained notoriety, and really jerk the bejeebers out of me.  I think they both rip off customers with lousy service that preys on those that don't know much.

 

Ha ha.  The WSJ recently highlighted a story about just these two "nogoodniks"  in this story last week.  Both these groups emphasize ppc sales.  They claim or will offer to sell an smb everything; seo, maps optimization, social, you name it.  They do make most of their money reselling adwords and are google partners in this effort to get feet on the street sales people to get in front of the hard to reach millions of small businesses out there. (possibly about 20 million in the States and another 30 million around the globe.

 

I had experiences with both of them.  They were miserable.  My advice:  warn folks away from them.  There are so many ways to get better bang for the buck.



#2 EGOL

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Posted 25 April 2014 - 04:26 PM

Wow...  I was surprised to see the revenue of those companies.

 

Somebody out there is just ranking in the dough.



#3 EGOL

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Posted 26 April 2014 - 08:26 AM

lol....   I just went to Reach Local and looked at their Marketing Math page.  http://www.reachloca...m/marketingmath

 

Go there, type in a visitor count of above one million.  Their math will be wrong.   Vastly wrong.    OOOPS! 



#4 earlpearl

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Posted 27 April 2014 - 09:03 AM

Wow...  I was surprised to see the revenue of those companies.

 

Somebody out there is just ranking in the dough.

 

If you break down RL's numbers at $514 million and 24000 customers that comes to a spend of about $1800/month per customer.  With a 1,000 or so sales people that is a very achievable number.   The aggregate size of smb's in local advertising is in the billions!!!

 

Basically for RL, who is public and whose financials are available, about 1/2 of their revenues are costs of goods sold, or what they have to pay google for adwords for these smbs.  Its probably the same for yodle.   That means that the actual spend by these 24k smb's is about $900 month and RL marks them up by about 2.  

 

Suppose somebody took $1800 of your money every month and only gave you about $900 of value if you did it on your own.    Its a rip off.   Suppose an "adwords" expert did it for you and possibly charged in total about $2-300/month and gave you actual value for your spend.

 

Its a rip off.



#5 EGOL

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Posted 27 April 2014 - 09:15 AM

Thanks for the analysis, earl.    

 

Approaching it from a "cost of goods sold" direction makes perfect sense. 

 

Amazing.   I have a hard time imagining 1000 people doing customer acquisition.  :huh:



#6 earlpearl

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Posted 27 April 2014 - 10:28 AM

Thanks for the analysis, earl.    

 

Approaching it from a "cost of goods sold" direction makes perfect sense. 

 

Amazing.   I have a hard time imagining 1000 people doing customer acquisition.  :huh:

"if all else fails ....try sales"

 

that is a lot of sales people in a lot of cities....and remember just in the US...about 20 million potential customers.  



#7 glyn

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Posted 27 April 2014 - 12:38 PM

Ripoff? Hmmm how much does a can of coke actually cost at a base level.

#8 earlpearl

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Posted 28 April 2014 - 10:20 AM

Ripoff? Hmmm how much does a can of coke actually cost at a base level.

 

Every business marks up costs.  Without that there is no business.

 

RL and Yodle mark up the costs, hide the mark ups in a deliberately deceptive way, sell themselves as google partners, get google backing to do that, run campaigns that are dramatically poor and weak, don't adjust the campaigns and just outright lie and steal.  I was fascinated to read this comment by an ex RL employee in a discussion thread that has generated many comments over many months.  It confirmed a lot of my suspicions:   They run heavy campaigns on a client's name.  Oooof.  big waste of time, big expense, generates a lot of calls from non customers, and repeat calls on mobiles.  They only run broad campaigns.  etc etc.

 

I'm glad to see they continue to take a verbal beating.  I wish the beating were worse.  

 

There are worse parts to the stories.



#9 glyn

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Posted 28 April 2014 - 12:00 PM

Well that aint on!

#10 iamlost

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Posted 28 April 2014 - 03:08 PM

The following is the meat of the problem:

Four former employees say its salespeople—who are typically the only point of contact for small-business clients—often aren't properly trained in the technical skills to troubleshoot or optimize results. The salespeople often don't check the progress of online-marketing campaigns for smaller clients, the former ReachLocal employees add. "You can't scale a business when you have employees constantly monitoring thousands of accounts," says Benjamin Poch, a former vice president and sales director at ReachLocal.

Red Flag #1: only point of contact is sales department.

Red Flag #2: contact people untrained.

Red Flag #3-9: unmonitored accounts.

 

Unmonitored ad accounts. Broad term ad settings. Account sales not account management...

SCAM! Churn and BURN!



#11 earlpearl

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Posted 28 April 2014 - 04:09 PM

After experiencing those two firms I've had a beef with them.  From a small business perspective, from my perspective they were about as bad as could be in a myriad of ways.  They have survived for a number of years and grown, with one of the two having gone public and reportedly the second, Yodle, preparing for a public offering.   

 

Ugh...a great way for a small number of initial investors to come up with a business raise money get it off the ground and make out like bandits if and when they can sell stock.  

 

But from an smb perspective its an astonishing sink hole of very poor investment in web marketing strategy.  I suppose based on my prior experiences, utter distate for them I was happy to see at least a small article in the WSJ calling them out.



#12 earlpearl

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Posted 28 April 2014 - 05:19 PM

Wow:  Per this story on Marketingland Google is steamrolling ahead looking to get more 3rd party salespeople trained to sell adwords.  The $$$ look a lot better to Google than the dirty efforts that kick the bejeebers out of the smbs.   Its ugly out there.





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