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Web Hosts Debut Ad Services for SMBs
By Kevin Newcomb

October 5, 2004

Web hosting providers Affinity Internet and Interland, as well as directories publisher Dex Media have all launched similar offerings this week promising full-service management of pay-per-click ad campaigns for small and mid-sized businesses.

Affinity ValueTraffic, Interland EzClicks, and Dex Web Clicks, launched in conjunction with Interland and media broker SME Global Solutions, are all based on the same premise: small businesses want to advertise online, but don’t have the time or the expertise to do so effectively.

“Traditionally, small businesses are not very interested in setting up and managing campaigns. Time and the learning curve are big issues for them,” said Greg Sterling, program director of the Kelsey Group’s Digital Directories: Interactive Local Media program. “Anybody that can come in and make it easier for them to advertise online effectively and for the right price will be welcomed.”

The Dex Media agreement calls for the yellow pages publisher’s sales force to market the offering to its advertisers. Interland will provide Web site design and hosting, along with tools that let business owners update and manage their sites. SGS will broker the media buys, working in conjunction with Dex Media. For their offerings, Interland and Affinity promise to manage all the details of paid search placements via networks like those of Google and Yahoo!’s Overture.

According to Kelsey Group research, 57 percent of small businesses are either entirely or somewhat confused about where to spend money advertising online. Someone with expertise in search marketing might achieve the same results for less than the cost of these programs, Sterling said, adding that many companies are willing to pay for labor savings and expertise they would otherwise have to attain themselves.

“It’s all going to depend on what the price point is and whether they can deliver. What the right price is remains to be seen, but they get more value from things like this that take the complexity out of the product,” Sterling said. The average small business spends about $6,000 a year on marketing, according to Sterling, so a service like this must be effective to keep getting funded, he added.

Dex Web Clicks incorporates a private-label version of Interland’s small business Web site design and hosting services. It will initially roll out in the Seattle metropolitan area, with pricing starting at $100 per month. Interland’s EzClicks has tiered packages that guarantee different levels of qualified traffic, starting at $40 a month for 240 visitors a year, $100 a month for 600 visitors, or $200 a month for 1,200 visitors.

For a $100 set up fee and a $100 monthly subscription, Affinity guarantees that a customer’s campaign will result in a minimum of 10,000 impressions or 50 click-throughs per month, or the customer is not charged for that month’s service.

“We think the guarantee of traffic, not ad impressions, is a more compelling and simple offer for small businesses because getting visitors to a site is the real objective of paid search advertising campaign,” said John Lally, area vice president of marketing for Interland. “When impressions, not traffic, are guaranteed it is possible that a customer could pay for the service and receive no traffic to their site. As such the customer doesn’t receive the key benefit of pay-per-click advertising — site visitors.”

Sterling believes these aggregated products simplify search marketing, and will lead to more experimentation among small businesses. That will be followed by some sort of analysis, even if it’s just an intuitive analysis, he said.

“For years, people have continued to advertise in yellow pages because they believe it works, but there’s not a lot of research to prove it,” he said.

While some companies may balk at entrusting their marketing campaign to a technology provider, Affinity CEO Peter Chambers insists that those worries are baseless. He believes that Affinity’s experience managing pay-per-click advertising gives the company an edge over self-service offerings like Google’s AdWords or Overture’s Precision Match; and its knowledge of small businesses and affordable pricing make it a better option than ad agencies.

“We’ve got great expertise in online marketing, we’ve got relationships with the search engines, and we understand small businesses. Plus, we’re providing a human element to the service,” he said.

Initial vertical focuses for Affinity’s product include real estate, retail, and professional services shops. Every customer who signs up is assigned an Affinity account manager, and each site is fully reviewed by Affinity before the campaign is started. About 50 customers have been using a trial version of the service since August.

The company will focus on existing customers in its marketing efforts, hoping to expand those relationships with additional services, Chambers said. “Most small businesses don’t want to go to all different places for services. Once they’re comfortable that you can do a certain thing, they want to see if you can do more,” he said.

One problem with selling the service to small businesses, Chambers said, is overcoming their desire to do everything themselves, coupled with their tendency to underestimate the complexity of a project while overestimating their skills or available time to dedicate to things like advertising.

“Many customers think they can do it on their own. They’ll try managing AdWords themselves for the first 45 days, and then see how hard it is. Then they come to us,” he said. “AdWords is a wonderful offering, but at the same time it can be hard to use sometimes. It’s a big advantage for customers to get us to do it, because we understand it.”

The difference between new customers signing up for the ValueTraffic service and those who have been hosting with Affinity for 45 to 60 days is five to one, he added.

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