FresnoBee.com: California Business
Mon, 17 Jun 2013 16:48:23 PDT
The promoter of Michael Jackson's ill-fated series of comeback shows created a conflict of interest with the singer's physician when it negotiated terms of his deal, an expert testifying for the superstar's mother told a jury Monday. Read comments
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WSJ.com: Small Business
Sat, 19 Apr 2014 11:39:32 EDT
By Khadeeja Safdarand Angus Loten Thousands of small-business owners have paid marketing firms to get their products and services in front of potential customers on Google, Yahoo and other Internet search engines.But a growing number of these advertisers complain about the online marketing firms' sales tactics and say they made promises that didn't pan out. Many of the small businesses' complaints single out two of the industry's biggest players: ReachLocal Inc., a publicly traded Woodland Hills, Calif., firm with annual sales of more than $514 million last year, and Yodle Inc. of New York, which generates more than $160 million in annual revenue, according to its website, and is planning an initial public offering.Some small-business owners rely on Yodle and ReachLocal to manage their Google AdWords accounts. AdWords, the search giant's largest revenue generator, is effectively an auction for keywords, where advertisers bid to show up near the top of search results for particular terms.Both Yodle and ReachLocal promise to provide hands-on, personalized support, small-business owners say. ReachLocal relies heavily on software to manage its advertising campaigns, according to four former employees, including two former executives, interviewed by The Wall Street Journal. Yodle also uses automation to make "changes across thousands of accounts at once," says Jared Slosberg, Yodle's former chief retention officer.ReachLocal has about 924 salespeople and manages online-marketing campaigns for nearly 24,000 small and midsize businesses world-wide, according to its filings with the Securities and Exchange Commission. Four former employees say its salespeople—who are typically the only point of contact for small-business clients—often aren't properly trained in the technical skills to troubleshoot or optimize results. The salespeople often don't check the progress of online-marketing campaigns for smaller clients, the former ReachLocal employees add."You can't scale a business when you have employees constantly monitoring thousands of accounts," says Benjamin Poch, a former vice president and sales director at ReachLocal. "Even Google uses algorithms."ReachLocal President Josh Claman says the company restructured its sales force about four months ago—in part based on feedback from clients—and as a result roughly half of its salespeople are now charged with acquiring new clients and the other half focuses on retaining existing clients, with commissions tied to renewed contracts. Mr. Claman says ReachLocal provides a valuable and affordable service to many small-business owners who lack both the know-how and time to advertise their firms on search engines and other online platforms. Customer complaints come from a small percentage of the company's clients, he says, adding that the company does check the progress of clients' advertising campaigns and has trained staff to oversee the campaigns. Radley Moss, a Yodle spokesman, says: "We have thousands of customers who have been with us for multiple years, which we believe validates the quality of our products and services."Google declined to comment.The Federal Trade Commission has received about 60 complaints involving ReachLocal since 2009—roughly half of them filed within the past two years—and more than 180 complaints about Yodle over the same period, including more than 100 filed since 2012, according to data reviewed by the Journal following a Freedom of Information Act request.The complaints, which were mostly from small-business owners, ranged from unfulfilled promises of new clients and better search-engine results to unwanted sales calls, exaggerated online traffic reports and overbilling. Some owners say the firms posted errors on their business websites—including faulty contact information—while others complained that the companies' newly refurbished sites promoted services they didn't provide. An FTC spokesman says the agency doesn't comment on specific cases. ReachLocal and Yodle declined to comment on specific complaints. Dave Bennett says he signed up for a four-month contract with ReachLocal last year to promote Wasatch Chill Zone, his athletic recovery business in Bountiful, Utah. For $900 a month, a salesman promised to create listings for his business in online directories and advertise his services on search-engine-results pages.But Mr. Bennett says he was shocked when he came across some of the automated content that ReachLocal had entered into Web directories, such as Citysearch, an online city guide that provides data about businesses.Spotting spelling errors, an incorrect address listing and even the wrong phone number, he says he complained to his ReachLocal sales rep. When that person didn't address the problem, Mr. Bennett says, he dropped the service—after paying a total of $1,800. "I didn't get a single customer from the campaign," he says.Marcos Quinones, a psychotherapist based in New York, says he received a phone call late last year from a Yodle cold caller who guaranteed him a specific number of clients. He signed up, paying $2,200 for three months. A few weeks later, he started receiving phone calls—but not from potential clients. "I paid for three months, and I didn't even get one customer," he says. "I got calls from people who didn't even know that you have to pay for psychotherapy."Mr. Quinones says the website created by Yodle after he agreed to the service didn't properly highlight his specialties. And after he gave his credit-card number, he added, he had trouble reaching anyone at Yodle on the phone. "They were supposed to contact me monthly to tweak the website and never did," he says.Yodle and ReachLocal declined to discuss individual clients, but both say they have multitudes of happy small-business customers. "We have a lot of long-standing clients, and if we weren't delivering leads, and quality leads, we wouldn't be retaining those businesses," says ReachLocal Chief Executive Sharon Rowlands.Lorenzo Sandoval of Ageless Karate in Las Vegas says he pays Yodle over $1,000 a month and about 15 students came to him in March thanks to online ads. He started using Yodle after hearing a sales pitch from a cold caller in 2012, he says, and briefly interrupted the service to try cheaper methods of marketing. But those tactics didn't yield the same results, he says, prompting him to return to Yodle this year. "You have to spend maximum dollar to get results quickly," he adds. "It's the difference between a Bugatti and a Nissan."Michael Westhead, who was referred to the Journal by ReachLocal, says he began using the service six months ago to promote Home Court Hoops, his Morristown, N.J., firm, which installs basketball nets. ReachLocal brings "everything under the same umbrella," he says. For $299 monthly, plus $1,800 in pay-per-click and pay-per-chat fees, he can engage with potential customers on his website as well as social-media platforms.Mr. Slosberg, the former Yodle employee, says a level of "churn"—or turnover in the company's clientele—is a "struggle anyone in the industry deals with." He attributes the problem to a combination of factors, including many that are out of a company's control, such as the financial constraints of small-business owners. The success of an online campaign, Mr. Slosberg says, also depends on a business owner's ability to convert a phone call into business.According to risk factors cited in ReachLocal's SEC filings, many clients "cancel soon after completing their initial contract terms and some cancel early. We must continually add new clients both to replace clients who choose to cancel or not to renew their advertising campaigns and to grow our business beyond our current client base." The company declined to specify its churn rate, or the rate at which customers cancel, saying only that it was under the industry average.ReachLocal shares have languished since last spring, and they have dropped an additional 20% since February, when the company issued financial forecasts below analyst expectations. Write to Khadeeja Safdar at email@example.com and Angus Loten at firstname.lastname@example.org