Google struck a deal with BellSouth for the directory company's 2,000-person sales force to sell Google's paid search ads to local businesses, the search giant said yesterday.
The deal marks the first time Google authorized a third party to sell AdWords. BellSouth's RealPages.com online directory will sell Google's paid listings to local businesses through a RealSearch offering. BellSouth's sales force operates in nine states in the Southeast. RealSearch offers leads from other search providers, including Yahoo's Overture Services. Along with search, its sales force offers Web site design services and online directory listings.
By outsourcing sales to a company with a sales force based in local markets, Google hopes to solve one of the biggest hurdles to the widespread adoption of local search: selling to local businesses uncomfortable with the Internet-based, self-service sales method relied on by Google and Overture for most advertisers.
“It obviously extends the opportunity for us to penetrate the small business market with Google AdWords and leverage their sales force,” said Sukhinder Singh, general manager of Google Local and third-party sales.
Google and Yahoo rolled out local search engines this year. Google Local, released in beta in March, combines Web search, mapping and local business listings. Yahoo Local, officially released this month, offers similar functionality. Both Google and Overture let advertisers target ads geographically.
BellSouth plans to sell Google's advertising directly to small businesses, not through the Internet, in packages costing from $80 to $400 monthly. It will simplify the process by selling buckets of leads.
“The problem they're having now is that [local businesses] just don't understand how the programs work,” Matt Naeger, vice president of Impaqt, Pittsburgh, a search marketing firm, said of Google's and Overture's local search offerings.
BellSouth is not alone in looking to leverage its local business presence with search marketing. Dex Media, the directory publisher for Qwest Communications, set up a subsidiary called Dex Web Clicks to strip out some of the complexity by selling local businesses a guaranteed number of leads and handling the bidding process for them. It started offering services in Seattle last month and recently opened an office in Omaha, NE. Interland, a Web hosting and design firm, established a similar search marketing program for small businesses called MyEzClicks that sells leads from Google, Overture and other search engines.
Like Google, Yahoo has no plans to build a large sales force to reach local businesses. Overture recently expanded its reseller program to include its Local Match program geared toward small advertisers. Among its announced partners are search marketing firms like Range Online and KeywordRanking.com as well as so-called small business aggregators like real estate services company Homegain and home improvement referral service ServiceMagic.
Singh said BellSouth is the first authorized reseller, with Google providing sales training, co-marketing spending and customer incentives. Google would reach local businesses through a combination of online self-service, its direct sales force for national retailers and partnerships like the one with BellSouth, she said.
Even with sales channels to reach small businesses, Google and Overture face other obstacles in connecting consumers with local businesses. A 2-year-old study by Verizon estimated that 63 percent of all small businesses have no Web site. Overture's Local Match displays a business-locator page, meaning advertisers do not need Web sites. Google advertisers, however, need Web sites.
“It is an area that needs to be addressed,” Singh said. She declined to say whether Google planned to offer its own services for small businesses to build a Web presence or whether it would rely on partners like BellSouth.
Google and Overture see opportunities to cut into the $14 billion local businesses spend on directory advertising yearly. The Kelsey Group thinks local search advertising could generate as much as $2.5 billion by 2008. Jupiter Research is more cautious, pegging the local search market at $879 million in 2009.
Consumers already turn to the Internet to obtain local information, according to Kelsey. A survey it recently completed with BizRate.com found that 20 percent of all searches were for local information.