A Business Owner’s Guide To Local Advertising

Published In: Forbes by Melanie Lindner

Forget the Yellow Pages. Try these nifty online services instead.

Many small businesses rely heavily on the love of local customers, and the Internet continues to make reaching them easier and cheaper than ever. For entrepreneurs who would rather not shell out (or simply can’t afford) as much as $1,000 for an old-fashioned ad in the Yellow Pages, there are now a host of flexible, affordable alternatives for wrangling the locals–and even calculating the return on those marketing efforts.

“In the current economic climate, business owners have a real desire for accountability,” says Court Cunningham, chief executive of Yodle, a Manhattan-based marketing and advertising company that specializes in local advertising for small businesses in major cities across the country. Launched in late 2004, Yodle orchestrates advertising for its customers online, where three-quarters of Americans go to find information about local businesses, according to the company’s own research.

That’s a problem, says Cunningham, as many small businesses still don’t have Web sites–or if they do, they’re not terribly sophisticated. Yodle builds Web sites, improves search engine optimization (to help small businesses climb in the search rankings) and lists companies on 15 online directories.

Next year, the company plans to expand its directory placement to 50 directories. Yodle’s payment plan works like a calling card. After a $447 initial fee, business owners set aside anywhere from $900 to $5,000 per month in an account to be drawn down as the clicks accumulate.

Yodle also tracks the clicks so customers can estimate a reasonable return on investment. According to Cunningham, Yodle’s customers average $7 in revenue for every dollar spent on advertising through Yodle. “I used to sit around and wait for the phone to ring,” says Jeff Whittington, owner of About Grout, a tile-laying business based in Kirkland, Wash. Whittington used to spend between $300 and $700 per month on Yellow Pages ads, without much success.

After signing up with Yodle last August, “now I’m busy all the time,” he says. If you think Yodle is out of your price range, there are plenty of even more affordable, Web- and phone-based, local advertising services out there. Google (NASDAQ: GOOG – news – people ) and Yahoo! (NASDAQ: YHOO – news – people ) offer them, as do a host of smaller players.

Take 1-800-FREE411. Instead if paying $1.50 to a mobile service provider for each directory assistance call, customers dial 1-800-Free411 (1-800-373-3411) and connect directly to the business of their choice. Callers can specify the name of a business, or just canvass a category in that location (say, “Melanie’s Chocolate Shop in Manhattan,” or just “candy store, Manhattan.”) The catch: Customers must endure a brief advertisement for a 1-800-Free411 advertiser in the chosen category and location.

The model–common among the new crop of local ad providers–is performance-based. Businesses join the database free of charge but pay for each call received through the service. Each lead generated by that opening ad costs the participating company between $2 and $7 per call, depending on the type of business. Yelp is another option. It lists the names, addresses and phone numbers for companies across the U.S. for free online; small business owners can also add information about products, services and special offers.

Customers then rate the businesses from zero to five stars. If a company merits a 3.5 or higher, it receives an invitation from Yelp to participate in a premium service program, in which it has the privilege of paying for placement at the top of the search stack on Yelp’s site. Premium service costs between $150 and $1,000 per month, depending on the type of business and amount of advertising you buy.Local.com (NASDAQ: LOCM – news – people ) also lists businesses by name, address and phone number. It has syndication agreements with search engines like Google and Yahoo, and it also partners with other directories like Superpages.com and Yelp to exchange information and customer reviews.

For a fee, companies can enhance their listings with more in-depth descriptions of products and services, as well as receive premium placement in Local.com’s search function. Better yet, Local.com confers with local Better Business Bureaus to ensure that businesses are in good standing. Premium service runs between $50 and $200 per month, depending on the number of search categories and locations. For instance, you might pay the base fee to appear in a search for “chocolatier, Manhattan,” but more for the broader “candy shop, New York City.”

Ask.com’s sponsored advertising program is more like placing an ad in a newspaper than in a phone book. Choose a title–“Buy shoes today!”–including a short description of what you are selling and a link to your Web site. The best keywords go to the highest bidders.

Ask.com also tracks the leads that come from its site, so you know what you’re paying for. Companies can run their ads for as long as they like (turning them off and on at will) and change keywords on the fly–all in real-time. Ask.com also syndicates the ads throughout other sites in its network. The base rate for any ad is 5 cents per click; the higher the demand for selected keywords, the more you pay per click. The network average is about 20 cents per click. In an economic climate where every sale is precious, that’s not too dear a price to pay.

By Melanie Lindner

Tags: Yellowpages, local search, yodle.

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