Unscrupulous Google selling
I have been alarmed in recent weeks by the rise in SME businesses telling me how they are spending their “local” advertising budgets.
One online directory has been mentioned more than once for “hoodwinking” businesses into parting with their budgets by making guarantees they simply cannot “guarantee” to deliver upon.
Who? Touch Local.
“Apparently” Touch Local is now selling local small businesses onto Google. They claim to guarantee to put businesses in the top “sponsored link” position within their chosen key words.
Let’s be abundantly clear on one thing. Google make multi millions selling PPC advertising. To position a business as the top sponsored link you have to out bid everyone else who is also bidding for that particular key word. If you maintain the highest bid, you’ll remain top, it’s that simple and the ONLY mechanism for doing this is through Google- NOT Touch Local.
So, what is Touch Local doing? How does it work?
Touch tell businesses that for a fixed fee (in two of the cases I know of £40 a week for one company and £80 a month for another) that they “guarantee” to put you as the top sponsored link for their chosen key words- for the entire month!!!
How? They take your keyword/s and analyse how competitive they are, how many companies are bidding on it, how many clicks on average it gets and what the highest and average bid is. They will then calculate how much (roughly) they expect it to cost to maintain the highest bid over a 4 week period.
This is highly improper and to make such “guarantees” isn’t just unsustainable it’s unethical and misleading.
Here is why it is not sustainable:
Most of the time Touch Local will probably get away with it; however what happens if a competitor decides they want top position and start making the highest bid?
Touch will have three options:
1) they increase their bid per click to remain top but the budget agreed with the client (in this case let’s take company “A” who pay £40 a week) will quickly run down and fall away & out of sight
2) they continue at the current bid rate and the client drops from the “guaranteed” top position
3) they increase their bid per click to remain top for the duration of the period thus delivering upon the “guarantee” they make, but will almost certainly make a loss on the fee the client is paying.
To avoid losing business option 3 is most likely the route they take, but this is so clearly not sustainable.
And herein the problem exists.
Touch Local either runs the risk of losing a customer because they fail to keep their guarantee or they lose money. Chicken/Egg…..
Furthermore, client “A” is spending £40 a week with Touch Local but Touch need to make money, so client “A” isn’t even getting £40 of Google value.
Why use a middle man?….. and anyone that “guarantees” results most likely can’t.
Most local directories won’t make guarantees and some are moving towards a pay-per-performance model, similar to Google, which I encourage and believe offers small businesses much better, more tangible value.
I can only assume businesses take Touch Local up on their “guarantee” due to a lack of understanding as to how Google works and the lack of knowledge and time it is perceived is needed to set up a Google account.
It really shouldn’t be prohibitive. Have a look at this link for a demonstration and FAQ’s on how Google AdWords works www.adwords.google.com
My advice, for what it’s worth, is don’t use a middle man.
Update: Having been asked to explore what one of my clients was actually getting from Touch Local, I found they are not even set up for a Google PPC campaign and the only advertising Touch are delivering is on TouchLocal.com itself.
Disclaimer: I don’t make a living from working with Google, advising or consulting on their products and I do not manage or set up AdWord campaigns for businesses.
However, I do help clients research their keywords prior to starting out with Google and identify tens, possibly hundreds of new relevant key words/terms that you may not have considered, how popular they are as search requests and what the average bids are for each. It has proven invaluable to many and I’d happily discuss helping your business if you need a hand. Contact me
I’ve heard horror stories about Touch Local and their sales staff. How do they get away with it?
I run a small family plumbing business in Lancashire. we got a call from a sales rep at TouchLocal who guarenteed to get us a certain amount of leads as part of the package. They also said we would be in Google under plumbers in Blackburn. We spent over £450 and got 2 phone calls and no sales back in 3 months. One of the calls was a lady in Dorset and when we asked them to show us where we were on Google, they couldn’t and made lots of terrible excuses.
[...] value and ROI to advertisers, which Touch Local have failed miserably to do. (read my post on unscrupulous Google selling). And finally, just to make the space even more interesting, competitive and over crowded, Yelp!, [...]
[...] The last couple of years has seen the emergence of “local”. For years the local directory space has been dominated by Thomsons & Yellow Pages, both of which have built exceptionally strong brands and customer loyalty over many years- especially Yellow Pages with their iconic brand. However both have failed to recreate their success online, notably Thomsons who have failed to keep pace with Yell and transition their revenues from print to online. Why is this? Firstly, they’ve had the problem most traditional print publishers’ have-the protection of existing print revenue. Secondly, and most worryingly, they have both developed antiquated platforms built for robust revenue generation but neglecting the user experience and failing to utilise today’s web technologies such as social infrastructure. In today’s world, no UGC or community equals a struggle. TouchLocal, who have developed a social fabric over the top of their directory are the only business besides Yell to make real money from the UK directory market- as at May 2009- (£14m turnover in 2007), but they have found it very challenging to build a user community and haven’t been able to gain engagement or build a community following the launch of a suite of social tools in early 2008. It must also be noted that their commercial strategy leaves much to be desired and is surely not sustainable- Read what I had to say about it here. [...]