Yellow Pages SEM Services Taking Advantage?

Yesterday’s special “Journal Report” section from The Wall Street Journal featured an array of stories detailing how marketers are navigating the rapidly evolving media landscape. One story in particular on yellow pages publishers and advertisers incorporating the Web into their YP marketing mixes caught my eye.

The owner of a carpet cleaning company in Atlanta is using BellSouth’s search engine marketing services. Here’s his story:

Micha Anderson, president of Chastain Chem-Dry, a carpet-cleaning service in Atlanta, spends $1,625 a month for 750 clicks from BellSouth — meaning BellSouth will keep bidding on keywords until at least 750 people click on Chastain Chem-Dry’s ads and land on the business’s site each month. BellSouth buys ads on Web sites including Yahoo.com, InfoSpace Inc.’s InfoSpace.com and Switchboard.com, and Ask.com, which is owned by IAC/InterActiveCorp. BellSouth keeps a percentage of the monthly fee depending on how many clicks are purchased.

Mr. Anderson says he doesn’t pay attention to what keywords have been purchased on his behalf. He just knows that the traffic to his Web site has nearly quadrupled since the program began. “I don’t know what exactly are the mechanics of how they drive the traffic for us,” he says, “but it’s effective.”

….Mr. Anderson of Chastain Chem-Dry pays top dollar for his clicks — about $2.17 per click, based on a monthly fee of $1,625 for 750 clicks. The top bid recently for “carpet cleaner” on Yahoo was $1.20 per click, according to information available on Yahoo’s Web site.

That seems about average, according to Kirsten Mangers, the chief executive of WebVisible, the company that manages the SEM services for YP publisher R.H. Donnelley Corp. who noted in the story, “if the average cost per click is 50 cents or a dollar, [the customer] may [actually] spend $2 or more for a click.”

Sure, small business people have their hands full with doing their actual jobs, and stuff like marketing is often left on the back burner. So, if a company they already have an advertising relationship with offers them a service like this, it makes sense that some are willing to pay 4 times what they would if they did it themselves.

The thing is, small businesses can take years to get in the black, much less have enough profit to afford such a luxury. It seems as though this carpet cleaning company, or other small firms like it could hire someone — say an enterprising college kid — to perform a service like this for far less. I doubt BellSouth is spending much time altering keyword lists or ad copy. If the advertiser paid someone $30-$50 bucks an hour to do his SEO and SEM for 4 hours per week it wouldn’t cost more than a couple hundred extra bucks on top of the average $.50 per click, still totaling far less than that $1,625 he’s paying the YP publisher.

This is not to demean the work that goes into lots of search campaigns conducted by SEM consultants and agencies. Joe Schmo’s hardware doesn’t necessarily need that, though. Such companies really only need a bare bones solution that’s reasonably priced.

I’d venture to guess it’s more about a lack of knowledge than anything. The WSJ story affirms this: “‘The vast majority of small businesses have neither the time nor awareness to effectively market their products on the Internet,’ says Bill Hammack, an industry consultant and former executive at Donnelley.”