ReachLocal or reach local is a search engine management and search engine optimization company. They provide seo and sem for Google, Yahoo, Bing, ask and other search engines. Is there a Reach Local scam and are they an overpriced ripoff? No...

There has been some uncertainty in the internet marketing industry as to how sustainable the Reach Local model can be long term. Since there is already very little profit in SEM, and since Reach Local has a very high pay scale for their employees, their financial strength in the future is in question.

The process that is being used by ReachLocal for their SEM programs is ingenious to say the least. Rather than just sticking with a traditional PPC program with backend reports and analytics, Reach draws a number of different metrics into their program that can inflate the web traffic and calls to their tracking phone numbers. Their emphasis is on the integration of SEM and banner advertising, but the way that they marry those concepts is unique to the industry.

Some of the their processes are as follows:

- Pixel Tracking. Customers that click on a PPC ad are directed to a landing page, where a cookie is planted. This cookie tracks the browsing activity of the customer and then displays additional banner advertising on relevant properties- Yahoo, Foxnews, etc.). The concept is called Remarketing.

This program is in no way related to behavioral targeting used by Yahoo and Facebook. A customer does not necessarily develop a search behavior, which we'll get into later. Rather it works more like stepping in dog poop- you probably didn't mean to do it in the first place, but every hour you're reminded of that special event when you smell it's ripe rewards.

If you think that analogy is way off, then you probably need to go with Reach's own in-house pet name for the concept- stalking.

The best way to understand this process is by going to http://mrrooter2.rtrk.com/coupon/?scid=361905&cid=94550&tc=07082309194751642&dynamic_proxy=1&primary_serv=mrrooter262-px.rtrk.com

The ad pointing to this landing page can be found on any of the major search engines or the Google Content Network (think, Adsense squatters who take you to a strange website when you accidentally misspell a website- myspce.com instead of myspace.com)

After you visit the Mr. Rooter landing page, go to Yahoo and click on a few of the headings- Finance, Sports, Weather, etc. Most likely you will see a banner advertisement for Mr. Rooter after doing a few searches. If you don't find it right away, you will certainly notice it popping up later when you visit different websites.

Pixel tracking is a great product for generating non-directional ad views for the end user. The intermittent banner ad displays have inherent branding value. It also resolves one of the primary issues small businesses have with SEM- I can never see my ads unless I have a huge budget.

However, there are two primary issues with pixel tracking: banner ads convert at a much lower rate than a directional program, and the process is wrought with misues. A simple Google search for "mrrooter2.rtrk.com" yields around 25,000 results depending on the day. This begs the question: how much money is being put into these products for indirect, low converting ad space?

ReachLocal's competitors use those same tracking urls to demonstrate live examples of how banner or behavioral advertising works. The question that needs to be asked is, how many impressions are ReachLocal's customers paying for that will never convert based on the audience that sees them?

- Landing Pages. ReachLocal ties the majority of their advertisers to the rtrk.com url, which makes it easy to discover who their advertisers are for competitive analysis. Unfortunately, Reach could take a pointer or two from LocalEdge when it comes to minimal branding on their landing pages. Internet users are getting more and more savvy when it comes to differentiating between a landing page or a website.

- Premium Pricing. ReachLocal is very shifty when it comes to revealing the actual cost that goes into their SEM product- they don't reveal it! Reach is very careful to make sure that their reports focus primarily on traffic and conversion, and not cost. The way a Reach Local rep bypasses this concern is to make sure that the traffic reports are inflated. They do this by adding free listings to every major local search directory online using their customer's tracking url and call tracking number. Industry experts estimate that the actual management cost for a ReachLocal SEM program is around 45%.

In essence what ReachLocal is providing to their customers is not a directional SEM program. Instead their customers are paying for a labor force made up of sales people who spend part of their time selling product and the remainder of their time creating indirect traffic to the customer's landing page.

Does the program work? Yes. Even a billboard advertising swimwear in Amish country will convert on some level, although the cost for each customer increases as the relevance of the placement decreases. Is it unethical for them to do so? No, but it is more expensive in the long run for the customer who would be better suited to run those programs in-house or use a vendor that operates on volume of clients instead of markup of keyword cost.

What we'd like to see is what happens when a customer cancels with ReachLocal, and all of those previously relevant links on the different business directories are now orphaned....Stay tuned!

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