ReachLocal Exposed: This Is What They Don't Want You To Know

November 28, 2013

I'm usually not bothered by too much. Over the past few months, though, I've had encounters with several clients of ReachLocal. For those of you who aren't familiar with ReachLocal, it's a paid search company that provides its customers with a slick interface and nicely named service components for online marketing their business.

What bothers me is that ReachLocal has misrepresented itself on two major levels to the aforementioned folks.


1) ReachLocal Commissions

ReachLocal is a Google SMB partner and so salespeople have said that it provides ReachLocal with special benefits, such as commissions from Google on Adwords spend. To be clear:

a) No one in North America receives a commission from Google

b) What does being a Google SMB Partner mean to you as a client? How does it give ReachLocal an advantage over any Google Adwords Certified Agency, as far as the results it can get clients? There is NO advantage. An SMB partner just means that it does a certain level of overall business with Google. Outside of that, Google SMBs receive no preferential treatment that will rank their ads higher over ads a search marketing agency or anyone else for that matter, creates. And there is no pricing difference either.

2) AdWords Spend

ReachLocal spends to budget every month. If you pay them $1000/month, like clockwork, the monthly budget will run down in systemic increments down to the last dollar.

a) I asked one ReachLocal client how ReachLocal makes money if it spends the entire client budget every month. I was told - through Adwords commissions. I asked another client, and I got the same answer. The fact is, ReachLocal does not provide transparency to its click prices. It inflates click prices, and that's what they don't tell you. How much does ReachLocal inflate prices by? Read on.

Clearly Unclear (Unethical?) ReachLocal Pricing

ReachLocal's actual overhead is nicely displayed through the following. It seems as though a maximum of 50% of what you spend will actually go to clicks. Although a true number probably resides somewhere between ReachLocal retaining 50-60% of what you're paying. No one begrudges them making money. But it does seem to be a high percentage.

Since ReachLocal is a publicly traded company in the United States, you can take a look at the most recent data yourself.

Other ReachLocal Struggles

+ Proxy site

ReachLocal duplicates your site (such as which gives them full ability to track everything a website visitor does. That's the pro, which is followed by a long list of cons, which include the fact that all the paid search traffic RL generates is not going to YOUR website, but it going to the proxy website they've created for you which has negative SEO consequences, any changes that are made to your own site aren't necessarily reflected automatically on the RL proxy site, and at the end of the day RL owns everything that you're paying them to do.

As a note, anyone who uses ReachLocal needs to do the following before campaign rollout: a) implement Rel Canonical tags on pages, b) no-index the mirrored copy (proxy) of the website - which would lessen the negatives.

+ Poor Conversion Approach

As an example, I just conducted a simple search for Langley Energy Efficient Window Installation. There is a company in Langley, BC, called Centra Windows that is a currentReachLocal client (as of Oct. 21, 2013) and they have a 5th position Google Adwords ad.  Although the headline doesn't include the words energy efficient, the body of the ad, does.

Click on the ad, though, and ReachLocal dumps you on the homepage of their Proxy site for Centra Windows. Proxy site aside. The potential customer of Centra Windows has stated through search that they are looking for "energy efficient window installation" and now they're being directed to a page where they have to "Where's Waldo" what they're looking for. As you can see, it's a pretty busy homepage to begin with.

This is a poor conversion approach. The ad should direct to a landing page specific to energy efficient window installation. In fact for any service/product that any company is relevant for, there should be specific landing pages set up for each.

+ Data Ownership

ReachLocal runs your campaign for you, but also owns the data that it generates - in terms of what the campaign results are. This is extremely valuable information that is YOURS. How it should be, is for you to have your own Google Analytics account which is tied in with your own Google Adwords account. That way, if you ever decide to cut ties with a particular provider, you can take all the data with you to another provider - or keep it for yourself if you want.

+ Unique Phone Number

ReachLocal provides a local "tracking" phone number that is put on the proxy site. The thing is, this is just another area where RL takes control of what you're paying them to do, out of YOUR hands. For pure LOCAL internet marketing you should always have your businesses own phone number posted. Google is often confused with multiple numbers that get floated out and so oftentimes there is incorrect information that is indexed within the search engines.

Other Interesting ReachLocal Points

Google Third-Party Adwords Policy

(1) Third parties should at minimum provide advertisers with monthly data on AdWords costs, clicks, and impressions at the account level.*

** As a note, Google uses "should" instead of "must," which means this is the loophole that allows companies like ReachLocal to keep accurate and transparent data to themselves, and not have to share accurate statistics with its clients.


Any reputable agency can do better in all the ReachLocal service areas, but if you're an agency is converting a former ReachLocal client and they love the RealChatLive function, just head on over to Apex Chat - which is the provider for live chat to ReachLocal - and so you'll be able to have the same functionality - at a great price.

Conversion Rate Optimization (CRO)

If ReachLocal really cared about conversions - specific landing pages would be built for specific ads. If there is an ad running for hardwood floor restoration - for example - how will the conversion be if you were directed to the homepage of a general flooring company, as opposed to a hardwood floor restoration page. And IF that page doesn't currently exist on the website, the one running the campaign has to ensure it gets created. 
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