Small Businesses are Being Sold a Bill of Goods

Filed in PPC Advertising, Small Biz Marketing by Matt McGee on June 8, 2009 10 Comments

On Search Engine Land today, Greg Sterling unpacks a new Borrell Associates report that, if you had to explain it one sentence, says this: Small businesses that try local online advertising almost universally give up after six months. The actual stats Greg quotes are:

  • Up to 50 percent [of SMBs] quit by 90 days
  • Up to 90 percent quit within 6 months

Important: We’re talking about small businesses that buy their local advertising from various resellers like yellow pages companies and other local advertising companies.

Let’s Cut to the Chase

We can go on and on about the need to reach small businesses and the need to educate them and the need to make things simple … but here’s the real reason all these small businesses are bailing on their online advertising:

The product they’re being sold sucks, and doesn’t have any measurable ROI.

Seriously, if the product was any good and the small businesses were making money, would they all quit after six months? Of course not. The Wall Street Journal talks a bit about the product here:

“…the resellers are charging local advertisers based on how many thousands of clicks they can drive to their Web sites. But those clicks are often worthless if they aren’t from the right kinds of customers.”

Bingo. The resellers are selling “guaranteed clicks.” I wrote Why Click Guarantees Suck back in August ’06, when this blog had about 12 readers. There’s a real life story in there of what happened when a small business owner bought a “local online advertising” package from the yellow pages, was promised a certain number of clicks in one year, and then called to cancel when those clicks never arrived.

If you read that, you’ll know why so many small business owners give up on these local advertising plans. They’re being sold a bill of goods.

Comments (10)

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  1. Isn’t part of the problem that many of these businesses don’t have a proper (== local SEO applied) website to receive those clicks and refine the campaigns to get the right clicks?

    Instead of people selling them ‘pre-packaged offerings like clicks’ wouldn’t they benefit a lot more from someone looking at their situation and selling them products or services that actually deliver them new business?

  2. dave oremland says:

    Well said and right to the point. Big mass resellers do a suck job for small businesses.

    If the SE’s want and need resellers for ppc…they have to tie it into a better quality service.

  3. Justin M. says:

    Yes! Somebody said it. I agree completely, the products do suck. And another reason why customers cancel is because they feel like they were deceived.

    Let me give you a good example…

    We recently sat down with a yellow page representative and talked about their online advertising packages. I wanted to get a strong feel for what this particular IYP was offering, so we spent a few hours going over every detail. In short, with they’re premium listing (which included a video!) they GUARANTEED 50 leads a month for ~$300 a month. Sounds nice right??? But then I ended up finding out that they count clicks as leads. Minimum one year contract. Ouch.

  4. Ric P. says:

    Unfortunately for small businesses, the marketing gap is wider than automated campaign management and billing. Most small business people don’t run their businesses on the basis of “leads.” For them, the only justification for laying down cold hard cash is tangible new customers.

    Since most of the validation of which leads become customers must be done by the small business itself, it never gets done, and so the ROI calculation is impossible. And since delivering and attributing sales from an advertising campaign is deeply impacted by post-click behavior, much of it off-line, it will likely be a long time before SEM takes off for smallm business.

    SEM will only take off

  5. Ya, too many companies over promise and under deliver… Greed is the main problem. Plus, guaranteed clicks often times don’t perform either

  6. brad says:

    I use to be highly involved in one of these aggregator programs (10s thousands of clients).

    It’s not necessarily that all the services are poor, in fact, many of them are exceptional.

    It comes back to the product definition and the sales call. If you first work with the client to set proper expectations, and then secondly report to the client on conversions (which is mostly phone calls) – you can have very happy small businesses.

    The issue is some of these services do not do a good job at the two above points (there’s much more to product definition than those two points).

    Here’s an article I wrote last year on this subject:

  7. David Mihm says:

    Rick, I think you are SPOT ON with this assessment. SMB’s care about traffic IN THE DOOR, not on the web, and they’re just not as concerned with tracking (and frankly, don’t have the bandwidth to do it) as larger enterprises.

  8. Matt Howard says:

    Want to reduce churn? Then stop scamming SMBs with BS promises of guaranteed clicks. Instead, give them simple and innovative tools that they can use themselves. Charge them a reasonable monthly fee. Encourage them to embrace “self service”. Empower them. Enable them to control their destiny. They’ll love you forever.

    When to reduce churn? Then play a different game. Challenge yourself to innovate beyond “clicks” and “impressions”. Develop new types of “social” and “conversational” marketing tools.

    Want to reduce churn? Refuse to believe that SMBs are lazy. Open your mind to the fact that SMBs are eager to embrace self-service, if only you gave them the right tools.

    Want to reduce churn? Go back to the basics. Leverage the fact that SMBs are skilled conversationalist off-line, relying on good old fashion “word-of-mouth” as their primary source of new customers. Give them tools to transition those “word-of-mouth” skills to the web.

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