Groupon says its focus is on the bottom line, rather than top-line growth.
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In most cases, advertisers bid on customer leads on a pay-per-click basis. In the case of FindWhat.com`s program where customers call a special 800-number, advertisers pay on a per-call basis. Because the value of having an interested buyer on the phone is perceived to be greater than someone who has simply clicked on an ad, the cost of the pay-per-call model will be higher than pay per click, starting at $2 per lead. Pay-per-click has a 5-cent minimum.
ShopLocal charges retailers on a per-visitor basis, but has several ways to calculate the fees. If a consumer goes directly to a retailer site from ShopLocal and the consumer moves around the site, the retailer pays 40 cents for the visit. If a consumer is searching for a specific product and clicks just to view that product, the retailer pays 5 cents. If that consumer then looks at other products at the same retailer`s site, the retailer pays an additional 5 cents per product with a 40-cent daily maximum.
In a similar manner, retailers without web sites pay 40 cents to have a customer view their company description, which includes address, phone number and directions to the nearest store.
ShopLocal has several ways to obtain product information. Retailers can send a direct electronic feed listing their products and brand names or they can send ShopLocal a copy of their advertisements and ShopLocal will input the information from the ad into its system. Shoplocal does not take product information directly off of web sites. "We`re trying to promote the idea of visiting the retailer`s shops and many retailers offer products on their web sites that they don`t have in their stores," Hamel says. "We don`t want to list products that consumers can`t get in the stores."
At Google, advertisers can pay on a per-click basis to have their ads appear above local search results. Google gets retailer content information from more than 4 million web pages and combines that with information from Yellow Pages data.
Interactive bus shelters
To get consumers to use the local searches, some companies are taking extreme measures. While Google and FindWhat are directing their national customers to their local sites when such searches are desired, ShopLocal is relying on the online newspaper readers to see its ads and click through.
But Yahoo is taking its marketing message a little further. With the launch of its local search service, Yahoo began an extensive marketing campaign. Part of that campaign involves select interactive bus shelters in New York, Los Angeles and San Francisco. Persons waiting at these shelters can conduct a search for a nearby service, view the results and print the information out from the bus stop to take with them.
But while that might seem a little extreme, it appears that the future definitely will include more pushes by the online marketing and search companies to move from global searches to those that are more local in nature.
Lauri Giesen is a Libertyville, IL-based freelance business writer.