Service Helps Local Advertisers Maneuver Online Marketing

Getting people to search for local businesses online is one thing, but getting local businesses online to greet them is quite another. While Google, Yahoo, MSN and others are making it easier for consumers to connect with local merchants through local directory, mapping, and customer review programs, the newly-launched MerchantCircle aims to help small companies establish a Web presence and navigate the often intimidating worlds of online search and contextual advertising.

“There’s a lot of inventory being created” in the online local space, observed MerchantCircle Chairman Ben Smith. “In the end you’ve got to bring small merchants online to get them to use that inventory.” Smith hopes to accomplish that by getting local businesspeople to “express themselves online.”

In addition to offering local companies free Web pages, newsletters, blogs, moderated forums and tools for creating Web coupons and building local merchant referral networks, MerchantCircle provides a simplified paid search ad process and optimizes content created by clients for search engines. The firm also runs contextual text ads for subscriber clients on newspaper sites within the Quigo network. Five thousand companies — from art galleries to plumbing contractors to real estate agents — have signed on to use the service. Smith would not disclose the number of paid subscriber clients.

“We’ve been experimenting with what we know works now,” he commented.

The company is also in talks with newspaper publishers to develop a display ad network for MerchantCircle clients. Rather than viewing potential newspaper publisher partners as competitors vying for the same local advertiser dollars, Smith said, “We’re working to sell their online ad inventory.” Smith views Yellow Pages companies as more direct competitors with his business.

The pricing model for display ads still needs work, though, he noted. “The cost relative to the value [advertisers would] get is not clear yet.” Smith believes complicated cost-per-action pricing models based on customer acquisition or conversion rates are not appropriate for local advertisers, who tend to be online marketing novices. “This group of customers can’t handle that kind of complexity,” he suggested. Although MerchantCircle does provide clients with weekly traffic reports, Smith stressed, “We can give them all kinds of fancy reports,” but “in the end they’re driven [by] what the customers tell them.”

Mark Cermak, owner of Madison, Ohio’s EcoClean Carpet Care “couldn’t say for sure” whether any of his customers have found his carpet cleaning business through his free MerchantCircle site. Cermak always asks customers how they discovered his company; however, when they discovered EcoClean online, he said, “I get, ‘the Internet.'” Although no clients have told him they found EcoClean on the site, and none has cashed in his MerchantCircle coupon, he said he would still consider upgrading to a paid MerchantCircle subscription.

Cermak set up a free account about three months ago, and also has a separate Web site and publishes online press releases to market his service. He’s advertised previous carpet cleaning companies through newspaper classifieds and Yellow Pages, though he no longer uses these ad vehicles.

In the future, MerchantCircle plans to help clients upload video ads to free distribution sites such as YouTube. The firm is also working with audio ad-supported phone directory assistance company Jingle Networks in the hopes of running MerchantCircle client audio ads in 1-800-Free411 calls. “We’re trying to find an efficient way of getting them into the system,” Jingle Networks President and CEO George Garrick told ClickZ News. He explained that MerchantCircle will help Jingle to sell its ad inventory to local advertisers. According to Garrick, Jingle Networks’s goal is to integrate five to 10 MerchantCircle advertisers into the 1-800-Free411 system.

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