Analysis says local search engine marketing face challenge customer churn

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According to foreign media reports, the U.S. search engine technology site search Engine Land editor Gregg String (Greg Sterling) recently wrote that Google this year, the cooling of the Distributor meeting reflects the challenges of search engine marketing, The Market analysis agency Borrell's report quantifies the reality of the loss of local search engine market customers.

Gregg String

The following is the original text:

Google recently ended its annual local Distributor symposium, which was very hot last year, although I was unable to attend this year, but according to one participant, the number of distributors attending this year is much smaller than it was a year ago. Local distributors include yellow pages printers, newspapers, web site custodians, independent local sales channel companies, and many other companies. They sell search products to small and medium-sized enterprises. Whether it's the overall economic environment or some other reason, the cooling down of the Google Symposium illustrates the challenges that the local search engine market is facing.

In October 2004, I wrote a report entitled "The search Engine market model for small and medium-sized Enterprises has come", webvisible to the Yellow Pages partners to provide "click Guarantee" products to achieve the following objectives:

• A large number of small businesses that purchase search marketing in a simple way;

• Let yellow pages manufacturers become their advertisers into the network marketing (search engine) of the entrance;

• Let Google enter the huge SME market through third-party sales channels to avoid the need for direct access to this volatile advertising community.

Contrary to my 2004 optimism, the road to local search marketing has been fraught with hardships. On my Screenwerk blog, I've been talking about the user churn rates and other challenges of these products over the last few years. The following is a representative excerpt from the September 2008:

"We are now in a painful phase where the old methods are no longer as effective as they used to be, and the new methods have not yet achieved the desired results." ”

Borrel Associates, a market research firm, recently released a report trying to confirm this from a quantitative perspective. The Wall Street Journal reported its findings at a deeper level:

"Borrell CEO Gordon Borel Gordon Borrell denounced the company's efforts to raise its commission by raising the cost of search advertising to local companies. Because local search clients don't get enough clues to justify their spending on search ads, they choose to give up. In addition, distributors charge local advertisers based on the number of clicks, but these clicks are of no value if they are not from the target customer. Borrell said search advertising had been exaggerated and sold too much to local companies. ”

The report's main findings revolve around the loss of local advertisers, and for some distributors, the annual wastage rate of local advertisers is surprisingly as high as 100%. According to the Borrell report, the company found that:

• Total number of customers lost 6-10% monthly;

• 90-day loss rate of 50%;

Six-year wastage rate reached 90%.

The specifics of different distributors are different, but they all say their customers have a monthly turnover rate better than the average, or about 7%. Traditional media are losing users, and their advertising costs are becoming more expensive relative to their role. So why do local SMEs choose to give up after experimenting with these simple search marketing products?

From my understanding and experience, it can be summed up to the following factors:

• Lack of education on SME and reasonable expectations;

• There is not enough time to make the campaign more optimized;

• Media sales personnel are compensated according to the number of customers received, but do not consider the customer retention ratio;

• In some cases, advertisers want to remotely select a keyword or other promotional activity that requires or manages it.

In the face of frustration over the lack of revenue from search engine marketing, many traditional publishers have started to build networks to look for traffic outside the mainstream search engines. Yellow page vendors and companies like Citysearch have begun to actively develop alternative sources of traffic. We will also see many efforts to diversify our sources of traffic.

However, for individual users, the search engine is still the first choice for the network experience, is a key driving force for local companies to expand their influence, so the importance of local search engine optimization (SEO) will continue to grow. In addition, for small and medium-sized enterprises, such as Facebook and Twitter sites have become a potential important flow providers and marketing tools.

In its report,

Borrell the transfer of advertising spending from traditional media to the Internet. The company said another 15 billion dollars would be diverted from offline media to online media by 2013. Local search ads may be among the biggest beneficiaries. But the existence of these problems makes this prophecy very complex, and the advertising costs of some small businesses may "disappear" in the course of migration--to some kind of advertising medium that does not yet exist.