SEM for SMBs: A Critical Layer For Local
Just like the category of local search itself, the phrase “local search” has many different aspects and dimensions. It is generally used to refer to a cluster of consumer behaviors or destination sites whose ultimate goal is to help people find businesses offline, in their local communities. But as the readers of this site know […]
Just like the category of local search itself, the phrase “local search” has many different aspects and dimensions. It is generally used to refer to a cluster of consumer behaviors or destination sites whose ultimate goal is to help people find businesses offline, in their local communities. But as the readers of this site know well it also has an equally important advertiser-facing side: paid-search geotargeting.
Traditional SEM firms have been providing geotargeting to clients even before it existed as a formal option at Google and Overture/Yahoo, buying geographic keywords along with their other keywords. Indeed, that’s how the search engines got the idea to provide these tools – their advertisers were doing it on their own. But now geotargeting is formally integrated into paid search (most recently Panama) and ad networks of all kinds. Yet small businesses (SMBs), the potentially biggest beneficiaries of local paid search, are still largely outside the system — although that is quickly changing.
SMBs have had a more difficult time adopting online marketing generally and paid search in particular for many reasons, which I explore in some detail in a post from early this year, “SMBs, Paid Search and Self-Service.” As I say in that post:
[O]ne of the raging debates in local search concerns “self-provisioning” or “self-service.” The question is: how many SMBs will sign up directly for paid search and how many must be acquired through a “push” channel (local sales force)? There are those convinced that a sales force is absolutely necessary to acquire any meaningful penetration in the SMB market.
In the end, I tend to agree — “DIFM” (do it for me) is more powerful than “DIY” (do it yourself). But I also think that larger numbers of SMBs will do some form of self-service as those tools and entry points become more pervasive and simpler to use.
In Spring of 2004 at one of the Kelsey Group conferences I programmed there was a panel called “SEM for SMEs” (SMBs). In the description of that panel was the following statement: a class of search engine marketing and optimization firms will emerge for small business that helps take some of the complexity out of buying paid search. Panel members will test this hypothesis against their own experience and understanding of the marketplace.
With one exception, the search marketers on that panel argued that this would not happen because of how labor intensive it was to do SEM and because “the spend” and the margins would be so poor at the SMB level. Cut to Spring 2007: there are as many as 12 (or so) firms (depending on whom you count) providing this service:
- ClickForward (swalled up by yellow pages publisher YellowBook)
- Inceptor (now owned and rebranded by Idearc/SuperPages)
- Innovectra (through its LeadStream product)
- Leads.com (owned by Websitepros)
- LocalLaunch (RH Donnelley owned)
All these companies are basically offering a version of the same service. Essentially they are aggregating traffic from search engines, yellow pages sites, verticals and, increasingly, others (e.g., 1-800-Free411) and reselling it to the SMB market on a fixed-fee (or budget) basis. As with traditional SEM, the campaign set up and management is outsourced to the agency and all the SMB has to do is write a check.
You could also add others like Intuit or Citysearch to this list. Because both offer a similar proposition to the SMB market. For example, here’s the Citysearch advertiser pitch.
Most of the listed firms above work with an existing SMB sales channel or “small business aggregator” (i.e., yellow pages publisher, yellow pages CMR, newspaper, vertical or Web host) to push simplified search to the local market. A couple of these firms are going direct and using a telephone channel or building their own “feet on the street” in selected markets.
A as general matter, these “simplified SEM” firms help bring together the sources of traffic with the sales channels that have existing small business relationships. In many instances they help offer value-added services or extend the product line that can be sold by that sales channel, as in the case of yellow pages, newspapers and some verticals. A yellow pages publisher, for example, can now “sell” Google, Yahoo, Microsoft and others and effectively be an “online agency” for its SMB advertisers — this is explicitly how SuperPages has referred to itself. That helps the publisher cement and retain the advertiser relationship as online distribution becomes more important. Newspapers, for their part, can use these products to extend into the traditional SMB market, which has been elusive for them.
Despite my characterization, however, these firms are not all identical and they don’t all operate in exactly the same way. I’m speaking in generalities and it’s at the macro or “ecosystem” level that they’re providing much the same function, which is to make it possible to more easily sell paid search and online marketing to small businesses. But some do only SEM, some provide SEM and SEO; some sell clicks, calls and/or “leads,” while some only sell clicks.
With the advent of these firms you can basically sell paid search in less than a minute (hypothetically speaking): “You want to be found on Google and Yahoo? Here are the traffic packages you can buy.” These firms, mostly behind the scenes, then take on the task of fulfilling the orders, which is where all the heavy lifting takes place.
As I indicate above, a number of these firms have been acquired and brought in house. Three of the four major U.S. yellow pages publishers did so within the past year or so. Simultaneously, search engines are trying to simplify the sign up process to attract more SMB advertisers. For example, Office Live, Microsoft’s SMB website building product, ends with a hand off to AdCenter that asks for a credit card and a monthly budget.
Despite this type of increasing simplification in the sign-up process, it’s still enormously challenging to get the attention of SMBs, which is where the “push” (sales) effort comes in. It’s not out of the question that Google, Yahoo or Microsoft might end up buying one of these simplified SEM firms and then use some combination of direct mail and telephone sales to try and reach out to more SMBs directly.
While that may sound counterintuitive don’t be totally surprised if it happens.