Local Internet Marketing

Jaime Irvine runs Neptune Local, a local online advertising company based in Santa Monica. Recently, he and his team launched Chirofresh.com which specifically targets marketing for Chiropractors nationwide.

My partners and I have been in the local internet marketing space for the past 12 months or so. We initially jumped into it after reading a number of different blogs, and thought we could replicate a similar model in our area of Los Angeles.

There are a number of different ways to set up an agreement with a local business to handle their marketing and there are better people than myself in how to explain the different relationships that can be built. Here is a great article from Adhustler. Take a few minutes and read. I will wait. Twiddling my thumbs.
Ok, you are back.

For the first few campaigns that we ran for local businesses, we went with the pure performance or affiliate based marketing. We charged to build a website upfront. Then we covered the upfront costs of the marketing and advertising, and our clients paid us a commission on what leads they converted as customers. In our heads, and in my theories on business in general, this was a win-win. The more customers we drive to the business, the more money we make and they make. In addition, as there is little to no risk on the part of the business, the upfront sale was much easier and made getting clients pretty simple and straightforward. Sounds gravy, right?

From our experiences, the downside of this model in the local space is three-fold:

1. There is plenty of trust that you must have in the business, as you can’t track every conversion 100% of the time. You need to be able to rely on the business to make sure they are counting every conversion. I don’t believe we had a problem with this, but do want to make people aware.
2. If you are covering the marketing costs, the business has no pure downside to not converting the lead. If they do not call back the lead or convert it, no “skin off their bones” as they are back at square 1. They haven’t taken the “hit” on the marketing and seen the money leave their pocket. Very key with some local businesses.
3. This is the most important thing I can tell you, “local businesses suck at sales.” Let me say that again “local businesses suck at sales.” If you are reading this post or others on this topic in the blogosphere, you will see that line over and over and over.

These businesses maybe great at being a chiropractor, a dentist or a landscaper, but they do not structure sales correctly in their office. Now, not all 100% of these local businesses are that bad at sales and there are the exceptions. If you want to go with an affiliate based model, make sure the business is one of these exceptions. Go to their office, meet their sales team, get a run-through of their sales process, show them graphs, data or whatever that emphasizes the importance of answering the phone right away and/or contacting customers back quickly and efficiently. If you have a bad feeling about the sales of the office or their integrity (remember it can be difficult to track conversions), walk away. Scratch that, run away.

Here is a snapshot of one campaign that was about average for our clients. Unfortunately, I can’t give you exact specifics, but here you go for the first two months of the campaign. This was a chiropractor in and we primarily focused our marketing on Google and Facebook:

Ad Spend: $2435
Leads (Phone and Email): 36 email and 15 phone
Revenue for the Chiropractor: $10,300+

From our experiences, the affiliate based model didn’t work for us. We were wasting money and spinning our wheels, although we felt we were delivering enough leads to them. I still do believe it can work with the right group, and there is still tremendous upside with going this route. That being said, we have changed our model (for the most part) to a management fee structure and/or per lead structure. If the right group came to us, we would consider structuring it differently, but for majority of our new clients we have gone this route.

With this current setup, it is less risky, but there is not as big of upside. In order to be the “big baller” with this type of model, it needs to be scalable. Our thoughts are to do just that by specializing in one specific niche and expanding that throughout the country. We have had success with chiropractors, and if it works in Pasadena with a local chiropractor, then it works in Des Moines, Little Rock, Minneapolis, etc. We have launched a company called ChiroFresh where we are doing just that.

The bottom line, local internet marketing is a ton of work. In any marketing and advertising, the data is the key to the puzzle and gathering enough data is tough with local clients—there just isn’t enough or it takes awhile to gather enough. With a national affiliate campaign, you can gather enough data to make changes in a couple of days, but that isn’t the case on the local level. If you are lazy, don’t jump into it. That being said, if you are lazy you probably shouldn’t jump into any affiliate style marketing either.

If you do want to jump in, you should concentrate in verticals that are high paying industries and products, along with good promotional offers that you can market well. I would recommend not building websites for local companies as you will want to bash your head in. They will want to make a 1000 different changes, all of which will not help your marketing campaigns for them. There is money to be made in local internet marketing, but it is not clearly defined. Be prepared for plenty of trial and error and prepare to lose some capital upfront, but I do think this is a good place to be in the long-run, and mobile advertising will be bigger than ever here.

Hopefully you have find this helpful and good luck!