Small Businesses Spend on Local Search

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Some small businesses are seeing response rates as high as 20 percent by using targeted search marketing within their local areas rather than nationwide ad placement.

Officially launched yesterday, ReachLocal is working with hundreds of small to midsize businesses on targeted local campaigns. Its technology provides local businesses with prominent placement in local search results while limiting the display of the ads to users living within designated geographic areas.

"Google and others have done a great job, but what is stopping small and medium businesses from using the Internet is that no one has looked at the Internet as a whole," said Zorik Gordon, CEO of ReachLocal, Encino, CA.

For example, some local businesses place ads on, which is a good service but not a big enough market for local businesses to get enough tracking on traffic, according to Gordon. Also, some local businesses avoid Internet marketing because the Web's global reach discourages them from spending on potentially irrelevant leads.

ReachLocal's system automatically selects which Internet publishers would offer the best placement to market the company's services. It works with search engines Google and Overture, Internet yellow pages companies such as and geo-targeted banner networks such as

ReachLocal creates customized campaigns online based on advertisers' budgets, the type of products or services being promoted and the areas they want to target, then targets the campaign only to online users in their geographic area. The business then tracks the performance of the campaign by phone calls, click-throughs and e-mails in detailed reporting.

One company that had success with the local search technology is Apache Oil Co., Pasadena, TX, which sells petroleum products to industrial clients. After spending $150 for the search service, the company said it brought in $70,000 worth of new business.

"There is no other way to get that kind of bang for your buck," Apache president Kenny Isbell said.

Isbell plans to divert some money he spends on yellow pages ads to expand his online campaign nationwide. He said the local search is cost effective because he pays only for traffic that results in Web site visits, e-mails and phone calls.

"It's basically free for me to be listed on Google," he said. "I'm not charged until someone actually clicks on my ad to view my Web site."

Christine Blank covers online marketing and advertising, including e-mail marketing and paid search, for DM News and To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting

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