Search Concepts

A Story about Local Search (authored by Joe Griffin and published in the 2008 Fall Edition of Search Marketing Standard):

A practical and factual study about the shift in ad dollars and audience targeting among contractors, doctors and  attorneys.

For over 50 years, the medical practitioner, legal, automotive-dealer and home services industries have invested the majority of their advertising dollars into yellow pages, TV commercials, outdoor billboards, and print ad campaigns. Each year these industries spend billions in yellow page advertising alone. Studies conducted by Web.com, The Kelsey Group and others show that the contractor, medical and legal industries (The Big 3) in particular are making expeditious retreats from many forms of local media.

According to the Kelsey Group, traditional Yellow Pages advertising revenue is on the decline, having fallen .6% last year. Generally, all advertising revenues increase by a good 5+% per year, partially to just be in alignment with inflation and the ongoing growth of the U.S. economy. So, a loss of revenue is a pretty bad sign. The Kelsey Group also reported in June of 2008 that the U.S. online video market is expected to grow between $4 billion to $7 billion by 2012. The growth in the Small and Medium Business (SMB) category is expected to grow at a staggering annual compounding rate of 167.8% per year, growing from $10.9 million in 2007 to $1.5 billion in 2012.

The Big 3 understands that in 2008, the yellow page books are better suited for propping up youngsters at the dinner table, compared to their traditional use as an information retrieval source. With a computer in the majority of U.S. households, and over half the nation already on broadband, people prefer to access their information online, most frequently through search engines and online yellow page type directories.

Video on Demand (VOD), TiVo, and DVR are bringing television advertising to its knees. I recently sat with and interviewed Roland Perez, Executive Director and President of the popular television health network show, The American Health Journal.  We spoke about his meetings with other industry executives whom, he says, are scared to death of what is happening with television viewers and advertiser returns. “Major cable networks are now pushing over 500 channels, and a good percentage of these viewers are simply skipping through commercials via TiVo and DVR or downloading video and movies directly via VOD,” said Perez.  Advertisers are feeling the pain and are complaining to the broadcast industry. More and more of them are shifting their budget to online advertising formats.

Print advertising still has life in it, but let’s be honest, what’s more boring than a flat print ad? Worst of all, because of the success advertisers are having online, the average cost for an ad in a local print magazine is actually decreasing, which means they have to sell more ad slots. Have you seen a copy of a major national magazine like Vogue or GQ lately? Check out the first 20-30 pages. All you see are ads. Old school marketing directors and agencies are getting desperate. It’s clear that traditional advertising is losing its effectiveness.
Instead of pushing more ads in the yellow pages , more commercials at the tube or more billboards on the highway, the Big 3 started turning to the Internet. In case you didn’t know it, there’s a fight happening on the streets –on the Google streets, that is.

Let’s take a look at the current landscape of a Google results page using the keyword phrase “boston plumber.”

1. We get 308,000 results.

2. We have a maximum number of advertisers on the page (approx. 9). On average, these advertisers are spending $2-$4 per click.  8 of the 9 advertisers are locally-owned plumbers competing against each other, and 1 of these advertisers is a nationwide plumbing franchise.

3. We get 10 local listings (the one-line listings) at the top of the page.  100% of them are actual local businesses with websites, reviews and other local directory listings.

4. In the top 10 organic results we get mostly nationwide directories/lead brokers. 7 of these results include MagicYellow, CitySearch, SuperPages, Yellow.com, etc. The remaining 3 represent some local city websites and actual plumbers’ websites.

This data begs the question, “Why are there so many nationwide directory/lead broker sites in the organic results?” Smart Internet pioneers understood that this shift would take place years ago, and they developed these portal websites primarily to attract organic positioning. Contractors have been the slowest to fight back in the Big 3;  however, recent studies show that major contracting firms in many of the top U.S. metropolitan areas are starting to fight back. As these companies continue to shift budgets into organic search, you will see most of these directory sites move to the second page.

One industry that has already made the shift is the medical field. The organic listings portfolio in the medical services vertical looks completely different than that of the plumbing vertical. “In the last two years, my understanding of Search and its function as a marketing tool has increased tremendously. Now, in every seminar I attend, I hear about search engine marketing and its effectiveness in targeting local customers. While we still invest in some traditional media, we get most of our new customers via search engine referrals,” said Tim DeBacco, Director of Marketing at NU/HART Hair Clinics.

Let’s take a look at the current landscape of a Google results page under the keyword phrase “phoenix cosmetic surgery.”

1. We get 429,000 results.

2. We have a maximum number of advertisers on the page (approx. 8-10). On average these advertisers are spending $2-$4 per click. 7 of the 8 advertisers are local cosmetic surgeons competing fiercely against one another.

3. We get 3 local listings at the top of the page. 100% of them are actual local businesses with websites, reviews and other local directory listings. ‘

4. In the top 10 organic results we get 9 out of 10 local businesses.

Why do we get so many local websites in the organic results of Google in the surgery category but not the plumbing category? Do these major directory websites not target the cosmetic surgery vertical? Absolutely they do. Is it safe to say the surgeons might represent a slightly more sophisticated business owner? Yes. Is it safe to say that surgeons on average have more dynamic websites, and invest more money online? Yes, definitely.

I spoke with Robert Baxter, President of Surgeons Advisor, a web-based surgeons’ marketing company. He explained that his business has increased tremendously over the last  two years as more and more surgeons embrace Internet marketing and the effectiveness of search engine optimization (SEO). “In a recent speech I gave at the Facial Cosmetic Surgery 2008 conference, I discussed the statistical increase in search engine user referrals to my clients’ websites and the strategies behind the success. I walked out of there with more business cards and customer interest then I can even handle. The level of competition now for first page rankings is at an all-time high.”

Speaking of smart marketers and sophisticated-shifters, let’s move on to attorneys. Like medical practitioners, attorneys have been quick to embrace the web medium, particularly in the last 24 months. Personal injury veteran Anita Robb of Robb & Robb LLC says, “Search is the most effective marketing tool we have at our disposal. We’ve been in this business for over 25 years, and have invested massive dollars into traditional media. I think traditional media will always play a role in the advertising mix, but when it comes to sheer customer volume, quality and ROI we trust Search the most.”

So, what does this mean for the search engine marketing industry, and how does it affect search engine optimizers, interactive agencies and the rest of the brainiacs that “get” Search? The level of competition is rising at an exponentially faster rate. Standard on-page SEO and link-building strategies alone aren’t enough. I highly recommend spending extra time and research in these categories. Setting the right expectations is crucial, and it’s a fact that the Big 3 are not only doing SEO and PPC themselves.  A good portion of them are investing north of $5,000-$10,000 in SEO and PPC with Search and interactive agencies. The local competition is tough, and not to be underestimated. Aggressive and new link-building approaches are key for organic results. Landing page optimization and video integration is necessary to maintain healthy PPC conversions and stave off hungry PPC competition. Know your facts about the local playing field, set realistic expectations, and be ready to compete with these aggressive small and medium business owners.