What ReachLocal is Hiding From You?

Digging Deep Into ReachLocal PPC Campaigns

One company made me very curious recently that is ReachLocal. We manage a client who also happens to use ReachLocal to manage their Paid Search Campaign for a while now. As their organic marketing company we have been asking to see keywords ReachLocal targeting for a while (we do have a lot of use of that keyword data as it gives us a great view on all keywords where data is not being encrypted) without any luck. So ReachLocal has a policy not to share data on keywords they are targeting and I found that quite disturbing. From small or medium business point of view spending excess to 20K per year and without knowing what keywords they are targeting is quite hard to make sense of. However it appears to me that lots of businesses are comfortable with this as ReachLocal made $455M in revenue for year 2012 and predicted to make over half a billion in year 2013.

My client spend around $1600 (Australian $) per month with ReachLocal and received 3,422 visits on average per month. So CPC would be $0.41 (considering $200 account management fee) which is quite low considering keywords my client would be targeting.

keywords
Before going into my finding I should give you folks a little introduction to my client, my client is a family owned and operated tyre & mechanical workshop based on Southport, Gold Coast, Australia. They do not have online shop they are mainly targeting areas surrounding southport (even targeting gold coast area is quite broad as people are reluctant to travel very far to purchase a set of tyres or wheels).
Here is a quick list of keywords my client might go for and as you can see average suggested bid is four times higher than they are spending (It might be even higher as these suggested bids is considerably lower than actual cost). This got me thinking and I have decided to find hidden keywords data to see what ReachLocal actually targeting for my client. After some research I was able to find a software that can track your PPC spending over a period of time and can provide us with a list of keywords were targeted. This data is not capturing 100% keywords but does have significant chunk of it.

southport-map

Target Suburbs:

  1. Southport
  2. Labrador
  3. Runway Bay
  4. Ashmore
  5. Molendinar
  6. Arundel

What ReachLocal is Targeting for them?

For last twelve months I have found that they have targeted around 125 keywords in their PPC campaign. Then I sort these keywords in two separate category call relevant and non-relevant. You might understand by now small business like my client should focus solely on target suburbs, however I have considered targeting “Gold Coast” still relevant and a lot of money been spent there.

 clicks

Where my client spent $16,800/annum ($1400 per month) so we can conclude $8,568 were spend to acquire clicks from non-relevant keywords and those are likely to be not qualified leads. See below for some examples of keywords considered as non-relevant but ReachLocal targeted them and spend money to acquire clicks.

 tag

QLD Capital city around 80KM north of Gold Coast, my client does to have any branch there, yet reach local have targeted 43 keywords (around 1/3 of total keywords).

other-keys

I have complied list of Keywords here (colour coded: Green- Relevant, Yellow – Not Relevant) so you can download this list and have a look for yourself. Also note that they are not targeting any adjacent suburbs (Labrador, Ashmore, Runway Bay) which remains ideal target market for my client.

Leads:

I have noticed significant flaw on the method reach local report their lead generation performance. For Example during August – September reach local is claiming to generate 167 telephone calls for my client. After analysing the data carefully I have found:

These calls (18 calls) should not be listed as leads!

calls

From the graph below we can see 47% calls were from landline (where we can see caller’s location). Given that our target market is Gold Coast region we can see 23% calls out of this 47% land line calls came from locations they are not targeting. We would assume (assuming Target : Non-Target  ratio remains the same for mobile calls) 50% of calls are coming from areas they are not targeting (Cairns, Ipswich, Brisbane etc.)

call-type

So actual (qualified) leads might be less than half of reported leads. I am doing more research on these and hope to find more inconstancy in these calls data.

I have done similar research on a number of businesses (not my clients) and found similar trend (and sometimes worse).

# Please note this post was written based on data from third party (however the company is one of the most trustworthy keyword data sources available) software. And the intention nehind writing this post is not “outing” ReachLocal. I believe all the small and medium businesses making an marketing investment on PPC campaigns via ReachLocal deserve to know this and forward to their local search marketing consultants at ReachLocal.

I was contacted by David Eddy form ReachLocal Australia, See his response below via Google Plus:

Thanks for bringing this to my attention +James Norquay. I’d be happy to help clear up any concerns relating to+Ferdous Haider‘s blog post. Please excuse the long winded response, but I’d like to address this as best I can.

In response to Ferdous’ 3rd party analysis of the campaign in question:

I’m sure you’d agree that the relevance and geographical targeting in any SEM (or SEO) campaign is largely reliant on the effective communication between client & consultant/agency. Therefore, I’m unable to comment on any keyword or geo-targeting issues with this individual campaign without being privy to those conversations.

Internally, ReachLocal definitely do not condone the provision of poorly targeted or wasteful search campaigns. We’re trained and motivated to strive for the best possible results for our clients, so I really feel the article’s claims of ReachLocal ‘hiding’ things from their clients is misguided.

In regards to sharing keyword data with our clients:

We can and do share keyword insights with our clients on request. One of the reasons we don’t expose specific keyword data by default is because our platform is gathering valuable insights on the best converting keywords for our clients in a range of local markets and industries. These insights help to make ReachLocal a market leader and give our predominantly small to medium sized business clients a competitive edge. Especially when you consider Google’s recent moves to hide organic keyword data. Keyword insights for online search to offline conversion (i.e. Phone calls – the most common conversion path for most SMBs) are becoming extremely valuable. Making that data freely available could potentially expose our Intellectual Property to competing PPC agencies and affect our client’s competitive edge in the future.

To be honest though, the majority of our clients aren’t concerned which keywords are driving traffic to their site. They’re busy running their businesses and just want to see what really matters – Measurable results. They want to see strong return on their ad spend.
ReachLocal provide clients with complete reporting transparency on the metrics that matter, such as recorded phone call data and online
conversion tracking.

The keyword targeting, bidding, click thru rates etc are for us to worry about as consultants.

Personally, the responsibility of making sure clients’ campaigns are running efficiently & generating strong ROI is what keeps me up some nights and I know the vast majority of my colleagues at ReachLocal in Newcastle & around Australia share the same care for their clients.

In regards to your call reporting question Ferdous – Our clients can login to our reporting platform and see all of their call data at any time.
Which calls go unanswered, call durations and call duplicates etc. Not to mention the fact that each call is voice recorded for clients to review at any time. How could we be any more transparent?

You make a great point James – There are too many SEO & PPC agencies out there who take advantage of small-medium businesses, when in fact the small guys are the ones who need our support the most. A small-medium business can ill-afford wasted ad dollars.
In my experience dealing with Australian small businesses, you do feel a sense of personal responsibility for clients because in many cases you’re the only marketing support they have. If you screw up their online marketing, it could cripple their entire business. (This responsbility also translates into great satisfaction when you’re producing results that help your clients grow and succeed online)

I can say with confidence & from personal experience that ReachLocal are a company who absolutely understand the importance of this responsibility. Everybody from the CEOs down to the sales & support staff really do share a genuine care for their clients’ success online.

Ferdous, my recommendation for your client would be to contact their local consultant to discuss ways to adjust his/her campaign where needed.

If anybody has any further questions, I’m happy to discuss offline – You can call me on +61401560404

Have a great day!

P.S. Why are we all discussing work stuff on a Saturday? ;-P

See My Response Below:

+David Addy I would like to thank you for taking your time and post a detailed explanation on where ReachLocal stands to address my concerns.

You have said “relevance and geographical targeting in any SEM (or SEO) campaign is largely reliant on the effective communication between client & consultant/agency.” So I understand you are trying to communicate here that my client was trying to spend their marketing budget on locations they don’t offer their services to? And they also wanted ReachLocal to advertise to terms like “Van Rental” and “Gold Coast Magazine”? I know this as fact they never communicated this to their local consultant yet ReachLocal used around half of the campaign budget over multiple years to target these keywords. It is quite hard to understand what communication could help here.

You have mentioned that I am “Misguiding” my readers by saying ReachLocal is hiding information for his clients, which I strongly disagree. You are hiding most important “Keyword” data. I strongly believe your client deserve to know what keywords you are targeting for them. I am not telling ReachLocal to make this data “Freely available” but should be provided within your reporting framework. And also I am not quite certain what “Keyword Insight” actually is as we never seen any data related to “Keywords” on request in multiple occasion for multiple clients.

Regarding number of leads reported in your reporting you and me both know leads are only valuable when they have at least some merits (qualified leads). All I hear from client is we have spent $1600 and received 170 leads last month so cost per lead is $9.40 (Great!) which can’t be right (given all these calls being abandoned and people calling from place you will never sell your product to ). Also everyone knows how web savvy these SMB clients are to dig deep into your report to find these inconsistencies.

Your advice on contacting local consultant and get my clients campaign on track is laughable. They have been running this campaign for over two years wasting all their money and now found all these (no credit to ReachLocal) just to advice your consultant to fix this is quite high expectation from ReachLocal. Yes my client contacted ReachLocal but not to fix these issues but to cancel her account (and yet need to continue her campaign with ReachLocal for another couple of months just to satisfy your contract needs! Joking Right!!)

I hope this is an exception (however I had looked at 3 other sites and found similar results) from ReachLocal. I have a list of over 500 clients managed by ReachLocal in Australia and I will go through few more sites to get a clearer picture and will let you all know soon.

 

Reply from +David Addy

thanks for your reply.

As I stated – Having no knowledge of the campaign
in question, I’m unable to comment on it. (I’m unable to comment on
any other ReachLocal campaigns on a public forum for that matter.)

In relation to your comment “So I understand you are trying to communicate here that my client was trying to spend their marketing budget on locations they don’t offer services to?” – NO. That is not at all what I was trying to communicate. I was trying to communicate the fact that keyword relevance and geographical targeting are largely reliant
on communication between client and consultant.

That’s it.
Zero reference to your specific client.
I don’t know your client – remember?

Even if I did know the client I wouldn’t be discussing their campaign details on a public forum like this.

I absolutely believe that everybody is entitled to have an opinion and I
do respect your beliefs around the keyword data…it just seems we share a different view on what reporting metrics are important for SMB’s.

In relation to your plans to analyse other ReachLocal campaigns:

I’m not sure what you’re trying to achieve there… If you go out and analyse enough of a company’s products or services, you’re bound to find a handful of issues or poor experiences. Especially with large companies, due to the sheer size of their customer base.

Examples:

Apple – I’m sure if I tested 1000 iPods I’d find a few with bugs.
Google – Just this  morning I found a 404 error from a broken link within
a Google+ verification process. Happens all the time.
My local fruit n veg shop – One of my bananas was rotten on the inside last week! :-P

My point here is that in my experience, ReachLocal are definitely not a company that condones campaign issues like the ones mentioned in your blog post. Errors happen, they can be fixed with effective communication.

Personally, I really don’t feel that digging around for issues with other ReachLocal campaigns is going to prove anything significant, except that maybe you have too much time on your hands.

Anyway, I’m done spending my time on this case online. If anybody has any questions or concerns please feel free to give me a buzz on +61401560404.

Thanks again,

Dave

 

My Response:

+David Eddy  Apple example might not be relevant as I have analysed 4 of your campaign and found same pattern (I bet you bought more than one banana to find one rotten)! About my professional life and time availability,  I have to say I do have a lot (of time) to do this type of research.

 

 

 

Author: Ferdous Haider

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1 Comment

  1. Good stuff Ferdous. I posted a more general piece about their business practices last year. The poor targeting is a real eye opener for sure – it’s something I’ve not heard before. Your assessment of the Reach Local spend on clicks is generous IMO. We’ve taken over campaigns “managed” by Reach on more than one occasion, we were able to broaden the number of keywords sponsored and run the campaign cost that was 80% lower than the total price Reach was charging. That’s a huge mark up on PPC and it really serves to dilute the value of Google clicks in a way that might turn off prospective advertisers from Google advertising entirely. By allowing Reach to do this, Google is effectively taking the short term buck while turning a blind eye to their own policies about third party transparency. Their mark up, if it is consistent with any campaign I’ve seen, was far more than $200 on a $1600 price in our experience. Great article, thank you.

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