Even web advertising needs sufficient investment

URL 2by Tony Fannin, Partner, BE Branded  |

For may small businesses, online advertising is seen as the golden ticket, low investment – high returns. Many online marketing companies such as ReachLocal and Yodle promise or strongly suggest, they can deliver marketing nirvana of new customers and better search engine results, all for under $1,000 per month.

Since 2012, business customer complaints have been increasing at a steady rate. The problem, they claim, are unfulfilled promises of results, lack of service and too many technical difficulties. A couple of examples to give you an idea of the claims (referenced from the Wall Street Journal Online):

Dave Bennett says he signed up for a four-month contract with ReachLocal last year to promote Wasatch Chill Zone, his athletic recovery business in Bountiful, Utah. For $900 a month, a salesman promised to create listings for his business in online directories and advertise his services on search-engine-results pages.

But Mr. Bennett says he was shocked when he came across some of the automated content that ReachLocal had entered into Web directories, such as Citysearch, an online city guide that provides data about businesses.

Spotting spelling errors, an incorrect address listing and even the wrong phone number, he says he complained to his ReachLocal sales rep. When that person didn’t address the problem, Mr. Bennett says, he dropped the service—after paying a total of $1,800. “I didn’t get a single customer from the campaign,” he says.

Marcos Quinones, a psychotherapist based in New York, says he received a phone call late last year from a Yodle cold caller who guaranteed him a specific number of clients. He signed up, paying $2,200 for three months.

A few weeks later, he started receiving phone calls—but not from potential clients. “I paid for three months, and I didn’t even get one customer,” he says. “I got calls from people who didn’t even know that you have to pay for psychotherapy.”

Mr. Quinones says the website created by Yodle after he agreed to the service didn’t properly highlight his specialties. And after he gave his credit-card number, he added, he had trouble reaching anyone at Yodle on the phone. “They were supposed to contact me monthly to tweak the website and never did,” he says.

Of course, there are probably many customers who are happy, but both companies admit to a large volume of customer “churn”. Many small business either don’t renew their contract or cancel them early. What happened to the silver bullet that many online marketing companies promote? The problem is, there is no silver bullet.

Online marketing is still subject to core marketing principles, one being, if you don’t properly fund the marketing channel and tactic, then you can’t expect great results. The siren call of online marketing is you only have to spend 10% of what you would normally spend on advertising and get even better results. Most intelligent marketers know this is not true, but we still want to believe it and then we feel lied to when the campaign doesn’t deliver.

Online marketing does work if:
• You invest fully (this means, you can’t be cheap)
• Combine online marketing with OTHER marketing tactics (individual tactics are not as effective by themselves)

The point here is, even online marketing still needs to be well funded as with any other marketing tactic, to be effective. This means, your marketing budget needs to be realistic in context of what you want to achieve. If your goals are small, then you only need a small budget. If your goals are more aggressive, then your marketing budget needs to reflect that. Otherwise, save your money until you can afford to do it well.

As my grandfather has told me, if you can’t do it great, then don’t do it.


About Be Branded

Tony Fannin is of President of BE Branded, an integrated marketing firm who helps clients BE Somebody to their customers. If you aren't somebody, then you are commodity.

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