Reach Local Advertising? How Google Squeezes SEMs and AdWords Buyers
ReachLocal forms strategic alliance with Google? Despite the creative PR positioning, the $68 million venture capital backed reseller of all major search engines’ text ads has simply gained the “privilege” of sporting an “authorized” Google AdWords reseller badge!
How is it that Zorik Gordon, Co-Founder and CEO, has been able to bank $68 million in financing WITHOUT such a “strategic alliance” with the number one supplier of search ads? ReachLocal has long been reselliing AdWords. Its new “official” Google reseller status comes on the heels of Google making a concerted push to bolster its third-party local field sales force for AdWords, cost-free to Google!
I have long underscored: Local Ad Sales War: Why Google is a Guaranteed Winner
While conventional blogosphere wisdom hails Google AdWords reseller deals as win-win-wins, it is Google, as usual, that is the BIGGEST winner of all:
Local merchants get the “hand holding” they need to get online, aka on Google?
Online directional media properties get the local ad fulfilment they need, from competitor Google?
Google gets a massive influx of local AdWords business, risk, and cost, free. YAY, for Google!
Local merchants may actually be on the losing end of the Google stick, perhaps couging up a 20% AdWords premium for the joy of “holding hands” with third-party sales reps, accordng to top Google exec, Sukhinder Singh-Cassidy.
While YellowPages.com self-describes itself as “a leading local search and Internet Yellow Pages destination” its business model includes strengthening the number one local search threat, Google, by re-directing in-house YellowPages.com SMB advertiser dollars to the Googleplex AdWords money-making machine.
Most ingeniuous of all for GOOG: Google gains big, new AdWords dollars from the authorized resellers themselves, slugging it out competing for Google “Sponsored Links” in competing to resell Google “Sponsored Links”! What’s more: They must also compete against guaranteed AdWords winner, self-dealer Google!
The not so virtuous Google rules AdWords circle: A search at Google for “local ads” yields Google.com as the prime, number one “Sponsored Link,” pushing “Google Local Advertising,” while ReachLocal and YellowPages.com bid their own AdWords CPC rates up, fighting against each other AND Google for the honor of reselling Google’s own product ON A COMMISSION FREE BASIS!
WHEW! Doesn’t sound like a $68 million worthy venture model to me!
Google, of course, prides itself on NOT doing business the old fashioned way, i.e., paying commissions to resellers. I dissect the Google AdSense BAD commission play in How Google AdSense FAILS Better Business Bureau.
MORE: Google AdWords Plus Box: Local CPC Bidding War Unleashed! and Google Zeitgeist: $200 University Payola AdWords Scam
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