John Andrews is a Competitive Webmaster and Search Engine Optimization Consultant in Seattle, Washington. This is John Andrews blog on issues of interest to the SEO community and competitive webmasters. Want to know more?

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Overpaying for the Privilege of Handing Over the Keys to the Kingdom

First, let me highlight an amusing snippet of text from a creative agency that claims to include SEO in their client work:

“Many of our clients have spent countless marketing dollars with little success.”

You have to love the irony. That is the “copy” on the website of an agency looking to earn your business. Beautiful.

Anyway… Marchex just made a new move into local, further blurring the boundaries of domaining, SEO/search marketing, online local, and web development. That alone is news, and should be interesting to web entrepreneurs, especially the ones that work in small business search marketing (like me). When a large company moves into your space, you should pay attention. They represent your competition in many ways, and are likely to be on the phone already calling your clients and prospective clients using large inside sales teams… one of the most effective business-building weapons and oddly the last resource you are likely to build yourself.

I’ve always looked forward to the day online yellow page companies would start offering web sites for their clients, and this is one step closer. So naturally I took a look at Marchex’s example of a small business profile page for local small business promotion, which was a dental office in a local city-region here in Washington State. The business profile is homed on a Marchex local domain DentalCareIssaquah.com. The business paying for placement on that domain is a dental office in Issaquah, who already has a moderately expensive web site at IssaquahDental.com (built by the aforementioned “creative” agency, by the way).

Their own web site presents a pretty Flash interface with an HTML version, and is moderately SEO’d… not nearly up to my standards but at least obviously attempted. The point is these dental guys have spent some real coin, including spend designated specifically for SEO aspects of web publishing, but are also presumably paying Marchex for the new “local advertising platform” on their primary local business profile page for Issaquah. Marchex integrates pay-per-call, click and lead tracking, maps, etc.. all into that profile page, so we can assume Marchex has serious hands in the revenue stream for leads generated by that profile page.

The dentists are handing over the Keys to the Kingdom, the way we see small business owners make that mistake time and time again. Marchex offered an upscale dental practice as an example for good reason - Marchex knows where to go for the high-impact, low-hanging fruit of revenue sharing.

Reminder: You must own your website and your lead gen channel, or at least own a point of leverage for that channel. You must control your pubic profile, and you must own the revenue stream from your search marketing.

If you look more closely at the dentist website, you see it has been “optimized” for local search via keyword stuffing of alt tags and title tags. Nothing too ugly, but obvious nonetheless. The content has clearly been “made accessible” to search engines via readable text HTML versions, but those are presented via techniques which fail usability tests — the intent apparently to satisfy search engines, not users. Navigate to the site via a Google search (which shows HTML landing pages), and if you don’t find yourself left sans-navigation with no options but to step back into the Flash site in less than 2 clicks, let me know and I’ll revise this post.

Look around the web and you will find a collection of second-rate footer “sponsored links” back to the dental website, resembling spammy paid links (e.g. at the bottom of this broken page fulltoothwhitening.com/best-teeth-whitening/a55.html). I would not be surprised if the good dentists think they have engaged “SEO” for their site, given all the evidence of spamminess. Too many “SEO” firms these days offer such garbage as SEO.

By “partnering” with Marchex, these small business men have handed over a portion of their web presence to a company that has invested heavily in their own market. Marchex acquired — and prepped for local business success — a collection of domains like DentalCareIssaquah.com. Today that domain is offered to this dental practice, but tomorrow when they stop paying Marchex’s preferred rate, that domain will indeed be offered to the next bidder. Thanks to Issaqua Dental’s continuing investment in Marchex, that hyperlocal domain owned by Marches has increasing asset value in that local market. Clearly Marchex is a competitor. What a great business strategy! Compete with local small businesses while marketing yourself as their partner, collecting a share of their revenues!

Why they decided to partner with their competitor (Marchex) I don’t understand. They did not “max out” their own opportunities for online local (scan the 1st page of Google and see that this practice is not listed in many ranking online directories, for example). They did not reach a top level of SEO, and from the SERPs they don’t dominate for their own primary local searches. They have demonstrated a willingness to invest in their website (even if they perhaps picked the wrong creative agency). So why hand over to Marchex authority on their brand name, business practice name and address, and practice keywords for a contracted deal that includes (I am presuming) a revenue share?

I have to assume they got tired of competing. They picked the wrong SEO firm, and have a misunderstanding of how search engine optimization works for dental practices. Sadly, they consequently stopped building asset value on their own website domain, choosing instead to add momentum to one of the more serious competitors - an online yellow page player. Tsk tsk… that is the kind of mistake that costs you later.

The right thing to do? Pay the online yellow page people for what they are good for - directory listings pointing to your website. Links to your web content, in the proper context to help you get more business. Don’t allow them to co-opt your business name in search engines unless they link to you directly. Make them use something else - and keep the good terms for your own web site. Don’t offer them revenue share - but instead make them bid against each other for your business. Keep them out of hyper-local, by owning hyper-local yourself. That’s why you got that domain name in the first place, and that’s why you publish a website and spend on content.

So my advice is don’t quit now, but do consider changing strategy with respect to local SEO. If you are willing to pay Marchex you must have some sense of the value of a lead… and I am willing to bet that you can get leads more cost-effectively without Marchex than with them, especially when you consider the costs of investing in your competition.

Why would Marchex - a company that paid over a hundred million dollars for a domain name portfolio - be courting you for a monthly fee for a business listing? Think it through… a lead broker represents a pure play on a supply and demand market. If that market is small… say hyper-local, how does a lead broker maintain the leverage he needs to support high prices and revenue share? There’s only one way - you hand that leverage to him when you agree to overpay for it.

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7 Responses to “Overpaying for the Privilege of Handing Over the Keys to the Kingdom”

  1. darren Says:

    Great advice John! This used to be my bread and butter. Especially the incredibly high-margin local SMBs like cosmetic dentists, lasik eye surgeons, and the like. From a service provider point-of-view, my last company started off doing what you mention - building sites for the small business including design, hosting, SEO, and other complementary services. We quickly realized where the real power/money was (SEO & lead gen) and started not to build sites for the SMBs, but instead for us. We owned the channel and commanded the premium. There is a disconnect right now - to the point where the small business won’t make the investment necessary to compete with an aggregator doing many different niches in many different markets…even when the margin is there. It’s work & it’s investment.

    The small businesses that are doing it are still the outliers (but hmmm, their businesses are growing) - the sooner the others realize that they “should” be the ones ranking for “seattle cosmetic dentist” rather than a generic marchex aggregated page means 2 things. Marchex is in trouble, and SEOs just got a lot more work. It’s getting closer, but I would have thought we’d make more strides from 4 years ago as well.

  2. mark Says:

    You have some good points about Marchex. It will be interesting to see how they well they can implement and manage all of these micro-sites.

    You seem to suggest that Issaquah Valley Dental Care has made some poor choices regarding their SEO strategy. I agree but I think you may be overanalysing it. Their firm is just two dentists, I doubt that their SEO strategy is at the cornerstone of sustaining their business.

    @mark If you look at SEO as an adjunct to service such as web design or web site maintenance, I see your point. And that is my point. That web site of theirs is a business asset with a serious asset value. It represents a considerable part of their total business value going forward. If you don’t see what I mean, pretend you are buying the practice from them. What is the price..? without the website? And with the website? Today that may be overlooked… but tomorrow it is going to be a bigger deal. In many cases today, the price differential with and without the website asset is considerable. One of the things I do as a professional consultant is establish a basis for valuation of such web assets. You can guess which direction the trend points for the relative contribution of lead-gen web site to total business asset value.

  3. Cave Diving Says:

    Thanks for the write up John. It is very thought provoking and confirms some ideas we have here. I made Allie and Solomon read it.

    Hans

  4. Tim Tevlin Says:

    The most effective tactic a local business can take in order to gain organic links on Google in particular, assuming that the overwhelming majority of local searches occur via the main Google page and users type in a geographic qualifier in their search term (plumbers Pittsburgh), is to use the Video SEO tactic. Meaning you do not even need a website to gain Page One visibility, but rather an online commercial that gets posted to video websites such as YouTube, gets indexed multiple times by Google, and thus generates multiple Page One links - leading ideally to off-line phone calls from active customer prospects above all. Obscure hyper-local sites from companies such as Marchex don’t appear very compelling to me, especially in light of the ‘real world’ in which Google proper, not Google Maps, is the foundation of the vast majority of local searches.

  5. Gab Goldenberg Says:

    I know that people search at the local level. My question is … with limited volume per hyper-local term, and more and more businesses having footers like “serving montreal, dorval, laval, chomedey, the south shore, cote-st-luc, st-laurent” etc. (read: more competition for those terms), what value can local businesses with low-gross-margins derive from this? Sure a few several-hundred/thousand dollar lead for a surgeon makes it worthwhile in that market, but what about the local convenience store? How about the stationary store at the mall around the block?

    Personally, as an SEO who’s done a fair bit of local, I’m skeptical of the value to these businesses. I’ve even turned down some of them whom I thought could not gain much from SEO, due to the low volumes etc.

    Original content as usual John.

  6. Visible Dentist Says:

    Kick ass article and a lot of very good points. Too bad it’s “wasted” on local search optimizers, such as myself.

    As our operations transition to local SEO exclusivly, I can resonate with everything you’ve said, and more.

    With regard to local dentistry search in which our efforts are heavily invested, it must be understood that the average dentist hasn’t a clue about SEO, or its ROI relative to initial patient value, or beyond.

    When you attempt to explain, often the dentist’s reaction yields to his failsafe ye old caveat emptor logic, that is, it’s just too good to be true.

    Regardless of proven results, years of experience and glowing testimonials, most dentists have a to-do list and happily mark off “Need website” along with the site’s local positioning and give the task(s) to whichever company their colleague suggested.

    So essentially we have the blind leading the blind. That’s not strategy - it’s more like sweeping dust under a rug just to get rid of it.

    j o h n

  7. Glenn Nicholas Says:

    Fortunately for dentists in issaquah, issaquahdentist.net (and dentistissaquah.net, and the same .orgs) are still available. Aren’t these worth developing before issaquahdental.net? In this case it seems Marchex has staked out a big fish position in the wrong pond. With such a large portfolio, easy to happen.

    Until the valuable exact matches are all pegged out, there will still be a window of opportunity for local business.

    @Glenn: No doubt there’s opportunity, but the point is businesses aren’t doing the work. They’d rather pay Marchex. IssaquahDentist4.me and plenty of other attractive domains are available. Sometimes it looks like Marchex is a domain portfolio looking for a problem to solve….

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