This article was written by Dennis Yu, CEO of BlitzLocal.com
It’s easy to criticize the folks who are pioneering the local online marketing space. Small business customers don’t have a lot of money, have huge needs, and are not well-versed in how PPC, S
EO, and all the other acronyms work– nor do they care. For a thousand dollars per client each month, you have to pay for finding clients, educate them on what you do, and yet have enough to spend on PPC, building landing pages, SEO, account management, reporting, call tracking, and so forth. And the venture capital folks want to make a 20x return on their investment. You do the math and see how near impossible it is to succeed in this space.
I’m going to show you what it’s like from the inside, since we have to deal with these economics every day. Even if your cost of sales and marketing is only 20%, product cost is 20%, and general overhead is 10%, you’re still left with only 50% for other variable costs. Nobody will tell you exactly what they’re spending on PPC (except perhaps us– we are at 70% of the client’s dollar), so let’s assume it’s around 30%– an anecdotal figure based on competitor accounts that have come to us.
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