Google, BellSouth Team for Local Search Sales

Google announced a deal with BellSouth today that will let it make inroads toward reaching the small and mid-sized businesses that it hopes will drive its local search product.

BellSouth will sell ads for Google’s AdWords targeted keyword advertising program through its 2,000 salespeople for its online yellow pages serving the southeastern United States. The company will offer its yellow pages customers a flat-rate monthly package to simplify the normal AdWords keyword-bidding process.

Google will be showcased in BellSouth’s RealSearch Engine Solutions offerings, which guarantee search engine traffic to an advertiser’s site for a fixed monthly fee. BellSouth also has relationships with LookSmart, Enhance Interactive, and other third-party technology providers who utilize other performance-based search engine, including Yahoo’s Overture. Those partners drive traffic to BellSouth’s customers as part of the RealSearch program, according to Laurie Scholl, director of marketing for BellSouth’s RealPages.

Scholl said the AdWords bidding process, where advertisers bid on keywords related to their business, and then pay a per-click fee for traffic generated by their ads, is a stumbling block for some small businesses, who would rather pay BellSouth to handle the details for them, as long as they will be guaranteed results.

“Our advertisers are different. They prefer to pay a flat rate, as they’re used to with our print yellow pages. They’re busy running their business day-to-day, so they’re looking for a full-service approach,” Scholl said.

According to The Kelsey Group, a research firm specializing in yellow pages, electronic directories and local media, the local paid search advertising market generated $45 million in advertising revenue in 2003 and is expected to reach as high as $2.5 billion by 2008.

According to Greg Sterling, director of Kelsey Group’s interactive local media program, many of the challenges in reaching the small business market arise because is very fragmented, difficult to reach, and the companies are not willing to change the way they are currently doing business. The best path to these businesses is through established small business service providers, including credit card issuers, Web hosts, vertical directories, yellow pages and newspapers, he said.

BellSouth takes the responsibility for all the elements involved in creating and managing a customer’s search marketing campaign, through internal resources, partnerships with fulfillment shops and technology partners. The customer chooses from one of five levels, which vary by the amount of traffic guaranteed, search engines included, and monthly subscription cost, Scholl said. Packages vary widely, from $80 a month to $400 a month, typically with a 12- to 17-month commitment that mirrors print yellow pages contracts, she said. Placement on Google AdWords is only included in the top two levels.

Google will support BellSouth’s sales team with education, training, co-marketing dollars and marketing programs, according to Sukhinder Singh, general manager of Google Local. In return, Google gets access to BellSouth RealPages advertisers — more than 600,000, according to Kelsey Group’s Sterling — through a second channel to complement its own self-service online channel.

“By working with BellSouth, we can significantly increase our reach to small and medium-sized businesses, and leverage their established sales force,” Singh said.

Similar programs have recently been launched by Web hosting providers Affinity Internet and Interland, and by FindWhat and Canada’s Yellow Pages Group. The relationship between Google and BellSouth emphasizes the emergence of a new model, Sterling said.

“It’s a marriage of convenience, but they definitely need each other,” Sterling said. “The yellow pages publishers have come to the conclusion that they need to do these sorts of deals, either directly or indirectly. They need to have some avenue into search so they can get traffic and distribution for their local advertisers. Google, and other paid search networks, have decided it’s very challenging for them to build a channel to directly acquire these small business advertisers.”

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