Mike Blumenthal, David Mihm & Mary Bowling take a Deep Dive into The Local Marketing Stack: A Roadmap for Small Business Marketing Decisions.
This is our Deep Dive Into Local from June 5th, 2017. In our Deep Dive series, we take a closer look at one thing in local that caught our attention and deserves a longer discussion.
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Mary: Hi, everyone. This is Mary Bowling from Local U with our weekly Deep Dive with Mike Blumenthal and David Mihm. And today, we're going to dive into the local marketing stack.
The impetus for this is that David has just put together a kind of interactive info-graphic that's free for all of us to use that kind of helps to guide the agency and/or the small business through marketing themselves online and which things should take precedence, which things should go first. And in my opinion, this is the big problem that most local agencies are having these days is trying to figure out what they should do for which clients. A lot of them are doing a good job of it, but I think that there's a lot of, more or less, scalable-type plans that are being sold to people that really don't take the individual needs of the small businesses that they're representing into account. David, can you tell us what your impetus was for creating this?
David: Definitely, and that was a great synopsis or introduction. You kind of nailed exactly what I was hoping to convey with the graphic. Yes, so I'd mentioned on an earlier podcast last week in local, I've been attending the Street Fight shows and the local Circuit Association shows and the BIA/Kelsey shows for almost a decade now, kind of crazy, and you see the vendors there and you hear about problems like churn rates and difficulty in on-boarding new customers and all these kinds of things. And it just has struck me for quite a long time, that there's this sort of fundamental misalignment between the companies that are selling digital services, or even traditional media services, like radio ads and TV and print, and where a given business, where a given small business customer is on this sort of marketing roadmap.
So, it sort of ... I would see it as sort of an unrolled version of Mike's famous web equity infographic, where you have fundamental business attributes like name, address, phone and your website and your customer and those sorts of things at the very center of your web equity, and then you sort of work your way out. Well, this is kind of a more of a linear progression of that same idea, and so you see all of these...and it's not every company. I think that there's a lot of companies out there that are trying to grasp kind of more, sort of, upstream fundamental components of this stack, but you see so many companies who are just selling their...whatever their product set is without thinking about where the business is in this roadmap.
And so, just as an example, a company like Yelp is going out and they're selling a restaurant, for example, on display advertising or native advertising on Yelp without thinking about, okay, does this restaurant have a mobile-friendly website? Do they have good photography of their items that they're selling? Do they have the ability to place an order online? All these things that I would see as far more important to the long-term success of that restaurant than a $500 a month click package from Yelp. And so, the idea really here is to...is if you are a small business, think about the service that a vendor is calling you about or emailing you about, and look at this graphic and make sure that you've checked off every box on the way up to whatever that service is before you buy it, and that's really kind of the end goal of the graphic.
Mary: Mike, how do you think this fits in with your web equity graphic? Do you see it pretty much being the rolled-out version that...as David describes it?
Mike: Yes, obviously, there's a lot more granular detail, and in that detail there's just all sorts of meat that you can't get to in a circle. So, the issue I was thinking about when David was talking though, was how there's a compound -- there's a problem that gets compounded for agencies and that is, Mary Meeker highlighted it in her slide deck last week, just about how advertising is largely, eating the internet to some extent, and most of that is being profitable. Profit from that is being taken up by Google and Facebook. So, a lot of these companies, as they struggle to find their spot in here, are confronted by the fact that Google and Facebook have really dominated, if you think about it, the hourglass, both ends of that, So, there's this question of profitability for the agency. Where can they do things profitably, at scale, that the business needs? I think David's right, a lot of them haven't even...and I think some of that comes around to the idea of some of these basic services. That's one area where there is still some profit left, although it's harder to achieve. But as you move through this, it gets harder to find those spots, that is both scalable and useful. I think it has to be those three things -- useful to the business, and profitable to the agency as well.
Mary: Right, I was going to say yes, because the agency doesn't want to do it if they can't make a buck on it. But unfortunately, some agencies are doing things they can make a buck on that don't really benefit every customer that they have.
Mike: Right. Yes, I was just looking at Yelp. Somebody who I actually thought ... I went in search of business that was happy with their Yelp advertising campaign. It took me a long time to find them, but I found one.
David: You did find one?
Mike: I did.
David: Good. Yep.
Mike: And over the last 23 months, for $300 a month, they have gotten 555 Yelp conversions, or Yelp ... and Yelp is very liberal in their definition of a conversion.
David: Conversion, right.
Mike: And so even at that rate, even if you count all of Yelps and say, yes, okay, they're all valuable, a cost of $12 per conversion, but the bulk of -- 350 of them are website visits. We have no idea whether any of those converted, and very few of them were calls. Some of them were map views, but they weren't necessarily driving directions, so that's kind of sketchy. Some of them were uploading a photo. Well, I don't consider an uploading of a photo ... this was a dentist. I don't consider that a conversion. So, $12 was the minimum cost for these conversions. The actual cost per action is probably four, five, six times that. I don't have enough data.
But there's an example that David's talking about, where they're selling stuff that -- and then proving that it works with bizarre data. I saw a similar thing on an AdWords campaign, some small company in this area that I do some free consulting for regularly, they took out a $700-a-month ad campaign because they weren't showing up in one of their markets with Spectrum, and Spectrum sent them all this data about page views, and blah, blah. It's like ... I said, "Well, how many of these people converted," and I went in and I looked, and it was costing massive amounts to get a significant action out of these people from the ads. It was $70 a click through an action, really was expensive.
David: Meanwhile, I think a lot, especially in the -- I'll just take your dentist example that you were just mentioning. I think, if you look at the studies from Street Fight and the LSA and Clutch and Thrive Analytics, there's a whole slew of small business marketing surveys out there. Small businesses actually, they understand. I mean, if you look at the most popular techniques, the most effective techniques as rated by the customers that these businesses themselves, that these agencies are selling to, inevitably it's SEO, it's social media and it's email in some order. And on top of that, or underneath that, depending on how you describe it, it's word-of-mouth referrals. And so, your dentist spending how every many hundreds of dollars for a handful of leads on Yelp, would be much better served digitizing his wall of happy patients smiling with their white teeth or whatever and putting that on Instagram or sending that out in a monthly newsletter or anything that will just kind of drive residual awareness and drive word-of-mouth referrals, I mean, would be way more cost effective and it certainly would get him at least the same, if not a higher volume of new customers.
Mike: And in this case, it's even more fundamental than that, because they have a terrible website.
Mike: And for $300 a month they should be able to get a good website.
David: Right. Absolutely. So, that's really the purpose of this graphic. Hopefully, your dentist will take a look at this, and before he renews his contract with Yelp, maybe think about some more of these upstream tactics to drive new customers.
Mary: And I see this is as a way for agencies to really ... I see it as a very useful way for agencies to educate clients who come to them and say, I need a chatbot.
David: Right, an IOS app. Right.
Mary: Right, and that I see our value as local SEOs being able to evaluate a small business's marketing presence and figuring out where they are in this framework, and what we may have forgotten. What do we need to go back and take care of that kind of got passed over? And just one of the things that strikes me, especially in this era of everything being so visual is photo optimization.
Mary: Years ago, back in like, 2005-2006, we all optimized the heck out of our photos because it paid off for us, and then it got kind of forgotten for a very long time. And I see some of these older tasks that we used to do becoming more valuable again, and this stack kind of lays that all out for us.
Mike: And even to the point though, it's not just the optimization of the image technically, it's optimization of the image visually. If 70% of your leads, as I've seen in a number of clients, are coming directly from the front page of Google, then why should the picture you have there not be the absolute best picture that shows up great at 200 pixels, or however few pixels they give you -- they give you very few pixels, so you need a picture that works in that very small space, which isn't a complicated question. Diffused seams of storage boxes don't sell anything. So, even that...just looking at that image and saying, how can I optimize this image for a human being, seems like a such a simple task that very few people do. The other task that very few people do is that they don't...you have customer data is a critical piece down here. Very few of these businesses are still collecting email addresses.
David: That's right.
Mike: And what better long-term investment can you make? Because that's an area that Google and Facebook can't touch. Email -- this leads into your next topic, David -- but email is still the highest ROI of any of these things, and why...even if you're not going to use it. We always tell people, even if you're not going to use analytics, get it installed. I'd say the same thing about email addresses. Even if you're not using them today, start collecting them and storing them in a retrievable form, which is the other issue. A lot of these people put them on notepads or their window screen on a sticky. Get a MailChimp account and put them all there.
David: Yep. I mean, even something as simple as a Google spreadsheet is fine, but at least somewhere where they're all in one place digitally structured, that can be easily exported to any number of programs. I totally agree with that. Yes, just in terms of email, I think it's ... obviously I'm a little biased now with my new company, but I think, I could have gone any number of different directions after taking time off last year, and chose email because I actually believe exactly what you said. It is the highest ROI digital marketing technique known to humankind at this point, and so, I mean, the reason I got into it was for that very fact. It works. It's cheap. Anybody can do it, and it just takes a little bit of discipline and diligence and being consistent with your email presence, and so that's really the entire purpose behind Tidings is to make that as painless as possible. That persistent discipline with respect to send your weekly or monthly newsletter.
Mary: Just to give a plug for David's Tidings, we use it at my agency now, and the reason why is because it makes it so easy and painless to put together an email marketing newsletter on a regular basis, and it's very inexpensive. So, if you keep pushing your customers to use email and they're not doing it, this is actually something that you can do for them very well and very easily that should pay off for them. And I think it's something that they can get excited about once they see the product and realize how they can customize it.
David: Yes, and I do think it's something that, as you and I were talking about earlier, agencies looking for products to sell where there is a little bit of margin, I do think that this is a good product for that. If you think about, you know...at least in talking to my friends who are kind of in the solopreneur category, real estate agents, mortgage brokers, general contractors, those sorts of people -- they're spending an hour or two per month, right, on an email. And so if you think about that, their hourly rate is probably, probably at the lowest, $50, and for some of my more successful mortgage buddies, hundreds of dollars an hour. And so if you're, as an agency, kind of shrinking that time down or eliminating it by adding email as a service that you're offering to your customers, I think it can be a real margin-booster for you. So, that's really ... I think it is a solution, a component of this marketing stack that should be profitable for the agency, and also successful for the small business customer.
Mary: Right, and it's very scalable, and it becomes even more scalable if you're concentrated in a particular niche or a particular location.
Mary: Mike, have you used it at all?
Mike: Yes. I use Tidings every week. We use Tidings for Local U, and we've had good success with it. Obviously, it's a little early in the product development cycle, so since I use it every week, I get to see David's new features sooner rather than later.
David: Yes, Mike, you and I had this conversation, offline, sort of, via email, but if you look at the ... MailChimp publishes, they have millions of small business customers using their product. So, MailChimp publishes benchmarks by industry for what the open rates are in real estate, in technology, in lawn and garden, home and garden, those kinds of breakdowns, and they're all in the...they're on the order of probably 18% to 26%, if I had to remember off the top of my head. So, if you think about that, the open rate...at worst case, you're going to get an 18% open rate. I think Mike, Local U gets 30%, or 25% to 30%. With my personal newsletter, I get about 40% to 45% open rate. Compare that to visibility on Twitter or Facebook or even Instagram which is the best, and you're in the single-digit percentages, even if you're just absolutely killing it. So, at the very worst, email's probably going to be two-and-a-half to three times better visibility rate with whatever marketing messages you're putting out there than social media is. And so that's, in addition to being low-cost, I think the fact that it remains a very direct channel that you own that people actually pay attention to and engage with is a really important component of it.
Mike: I think there's always this issue for small business of trying to balance marketing and content with sales.
Mike: And I think that there's a danger, like on Facebook, of trying to push it too much into, for many businesses, like the ones you gave -- the examples you gave, real estate and construction -- of trying to move it out of marketing and into advertising, and I think there's a danger there.
David: Which is why frankly I designed the product to focus on becoming a knowledge expert in your domain, as opposed to hard-selling with transactional messages, which I totally agree, will turn people off right away.
Mary: Right, and this gives you a chance -- these are people that have already expressed interest in hearing from you. So, it's a golden audience for you, and this gives you a way to have a direct one-on-one relationship with them which is absolutely huge.
Mike: Yes. I agree. I mean, for Local U, it's been a godsend, It's a way for us to do a one-to-many communication on a regular basis, and, when you tie it together with a podcast and a little bit of transcription, it allows us to produce two solid pieces of content every week, and within a half-hour of time, we get two blog posts, an email newsletter, two podcasts and two videos, So, it's part and parcel of a content production strategy as well.
David: And Mike, I know you don't use Chrome, but we did just on Friday, release a Chrome extension that allows you to save articles to your newsletter on the fly throughout the week.
David: So, I know it doesn't necessarily fit for your process, but for the agencies and businesses out there that use Chrome, hopefully that will save you even more time in building these newsletters.
Mary: Oh, I can't wait.
Mike: I just refuse to give Google any more data than I absolutely have to.
David: I know. Hey, we don't use Google Analytics, but I do think that the Chrome browser kind of fluctuates with Firefox, but right now I think Chrome is probably the best browser out there.
Mike: Yes. So, anything else about...
David: No, I think...like I said, I thought Mary did a perfect set up to the graphic, so I couldn't really improve on that. I just encourage people to take a look at it at tidings.com/stack, and, it was a long process to kind of get this out there, but I'm anxious to get feedback and incorporate feedback and suggestions that you might have in terms of how to make it more clear or if there are components that you disagree with the positioning of. Those are things -- I'm all ears, so I would love people to let me know about it.
Mike: Actually, before we go, I have a quick question for you, So, about this -- in terms of the levels. So, a lot of times I'll see a small business. They'll come to me desperate. they just got done ... like the one I wrote about who had fired four companies, each charging them $300 a month. I see these folks all the time and a lot of them don't have good websites or are just starting to build a decent website. And for those folks, I see something like AdWords Express or even Google or Facebook posting as a way to subsidize early misguided, while they're trying to get on the right path that you suggest. I see those as being able to come in and provide a little support early on in that, and particularly a new AdWords Express, which I've just ... it's just surprisingly easy and surprisingly effective.
David: Right. I think, at some point, if you look at the graphic, both paid social and paid search are at the start of the paid line, and it's possible they could move sort of earlier in the graphic over time. I think you're right. I think to the extent that Google and Facebook continue to evolve their paid products into direct-response media formats, ad formats, where you don't have to visit a website in order to transact with the business, I agree with you that they can used sort of in parallel as opposed to further down the line. But I think if you're going to do any kind of advanced campaigns with Facebook or Google AdWords, you have to have a responsive website with a little bit of conversion optimization. You got to have good photos. You gotta have customer reviews on that page for social validation. So, I do think, generally speaking, right now, they're positioned more-or-less appropriately, but if -- you mentioned AdWords Express -- if the AdWords Express and home services ads product from AdWords kind of blend together, and that becomes the new focus on Google, absolutely I would move that sort of earlier into the graphic.
Mike: And it might actually be a separate category.
Mike: Where there's AI-driven, self-serve, ad product that does function earlier in these things.
Mary: Yes, and another thing that introducing some type of paid advertising early in your project's campaigns is, it kind of buys the agency or the local SEO a little bit of time for the other things that they're doing to work, and it starts driving ... should start driving business immediately. It takes the pressure off the agency, and it takes the pressure off the business owner, because they're starting to see something happening that's good for their business very quickly.
Mike: And they might even see a decent keyword list out of the deal. Or some topics.
David: Until Google obscures that even more.
Mike: Who, Google? All right. With that, as a skeptic ... we'll be three skeptics, we'll be signing off from the Deep Dive. Thank you very much for joining us. Take care.
Mary: Thanks, David.
David: And bye, guys.