A growing number of small-business owners are turning to large
online-marketing firms to help them place ads on search engines
like Google, but many are finding that the ads aren't reaching
their target audiences.
Meghan Phelan Goicouria, the owner of a Granny Nannies home-care
franchise in Miami, says she signed up for a package with online
marketing firm ReachLocal Inc. in September 2013 after a salesman
called out of the blue. He described it, she says, as "AdWords on
steroids," a reference to Google's own paid-search-advertising
service.
But soon after, Ms. Goicouria says she began receiving calls
from out-of-state customers who had seen the ads but seemed to
think her business was located in Texas or Virginia. She says she
put in a request to cancel ReachLocal's service after she received
no valid leads.
ReachLocal declined to comment on the specific case but the
company's chief executive officer, Sharon Rowlands, says that
erroneous leads aren't common and the company wouldn't have grown
to the size it is today, with more than $514 million in revenue
last year, if it wasn't delivering quality services.
Ferdous Haider, a digital-marketing consultant in Brisbane,
Australia, recently examined several ad campaigns run by ReachLocal
and other search-engine marketing firms using SEMrush--a tool that
shows the terms users enter on Google that lead to search results.
The findings, which were reviewed by The Wall Street Journal, found
many instances of irrelevant search terms leading to
advertisements.
Ads for a Chicago tailoring business--a customer of
ReachLocal--came up on the first two pages of a Google
search-results page when users searched phrases with New York,
Houston and Los Angeles in them. In another example, the keyword
phrase "small appliance repair Denver" brought up an ad for a local
dentist, another ReachLocal client. And a cleaning franchise in
California--a client of Yodle--surfaced when someone searched for
"maids in UAE."
Since Google charges for ads on a cost-per-click basis, inviting
traffic from users who aren't potential customers can waste an
advertiser's money. For example, bidding on the keyword phrase
"personal injury attorney Dallas" can cost more than $100 a click,
according to Google's keyword-planning tool. Google declined to
comment.
"It's so easy for one keyword to cannibalize a budget," says
Andrew Rulnick, a former ReachLocal employee.
Software used by companies like ReachLocal can automatically bid
on a plethora of irrelevant keywords, costing an advertiser
hundreds of dollars, if an account manager doesn't monitor the
results frequently and specify the terms to stop associating with
an ad, says Eran Malloch, who formerly worked at ReachLocal in
Australia.
Khadeeja Safdar
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