Web-based marketing has worked wonders for Denver Concierge, founding member of the House Cleaning Alliance. The company still has a commitment for a large display ad in the phone book for a couple more months. But once that is over, it will discontinue the phone book ad and begin applying its entire advertising budget to fund web-based marketing.
Denver Concierge spent about $250 on web-based marketing in July and won about five new customers per week from it. That has worked out to about $12 per new customer. With other ad forms such as local newspapers and running fliers, Denver Concierge has generally paid $200 (or more) per new customer. Its phone book ads generated only four new customers in the past year for a total cost of over $13,000. What a horrible waste the phone book ads have been.
According to Angela Danessi, Denver Concierge’s General Manager:
“For once in the history of our company, I feel like we are not just throwing away our advertising dollars. We’ll never pay another dollar for phone book or newspaper ads. From now on, we’ll invest our ad dollars exclusively in web-based advertising.”
So, what exactly is web-based advertising?
We define web-based advertising as banner ads on Google and Overture, and you don’t need the Alliance to set these up and manage them-you can do it yourself. The ads are billed based on actual clicks. Here’s the scenario:
A young professional working mother in Seattle is looking for a house cleaning company. Most likely from work, she logs onto a search engine, maybe Google, Yahoo or MSN, and types in “house cleaning seattle” or some other combination of key words. Then the ads appear as “Sponsored Links” on the right for Google, or as “Sponsor Results” at the top and right for Yahoo. If your company’s banner ad appeared there, then she might click on it. If she did, you would be charged somewhere between $0.40 to $2.00 depending on your bid amount. If she doesn’t click on your banner, then you would be charged nothing.
A click rate of 5% is not so bad. So if 100 persons do this and 5 of them click on your banner ad and are thereby routed to your website then, if your bids were similar to Denver Concierge’s current average of $1.20, you would be charged just $6 for your banner to have been served to those 100 persons. Denver Concierge has a reasonably nice website and, if you are participating in web-based marketing, the quality of the site makes all the difference. It does no good to pay for banner ads to traffic customers to an unappealing website. Over 10% of the banner clicks to Denver Concierge’s site results in an inquiry-they phone or complete a request online for an in-home quote. Once they have visited our site and contacted us, we convert 75%, or about five per week, to new customers. We’re spending a bit over $60 per week, for a cost per new customer of less than $20 each.
Before we began the ads we were getting very little traffic to our website, and the site had no page rank, so nobody could find it. Once we started advertising it with the banner ads, then we started getting traffic. We optimized it and over a three month period increased the page rank to 4/10 (so far), which makes it one of the top ten websites in our industry (including the franchises!!). We still love referrals, but in terms of advertising, we have never had such a positive experience with any other form. We don’t know if web-based marketing will work for you, but why wouldn’t you try it for a month or two and find out for yourself? It’s not a commitment like the phone book ads. You try it for a month-if it works, then try it for another month. If it doesn’t then you cancel it and get a refund for any unused campaign funds.
The House Cleaning Alliance is suggesting this for two reasons:
- Almost no cleaning companies are doing it themselves!! Why not? In July we did Google and Overture searches for the largest 285 cities in the US and found only 29 independent maid companies participating in banner advertising. We have over 6,000 independent maid companies included in our House Cleaning Directory, and could find only 29 independents advertising on major search engines??!! Considering how well they are working for us, that’s truly incredible. We believe they could work similarly well for other companies, and would like to encourage more independent house cleaning companies (outside Colorado) to participate.
- The ads aren’t so difficult to manage if one has a good understanding of the different search engine technologies, especially with respect to local, regional, and national searches, and knowledge about what combination of key words and negative key words apply. We believe that part of the reason for the abysmally low participation in web-based marketing is that most managers don’t fully understand these concepts.
We have managed the accounts for Denver Concierge carefully to earn “strong” ratings for most search items in all campaigns. In fact, in July, we were selected to (and did) join Google’s Advertiser Research Council. In terms of other credentials, one of our founders is also an editor for the ODP.
Denver itself is a metro area with a population of 2.2 million, and Denver Concierge’s service area extends well beyond the metro area’s boundaries, to include Boulder, Parker, Evergreen and other nearby areas. For this market, the company presently spends about $250 per month, and will likely increase that amount to $300 once the phone ad expires. But the fact is, one can only generate the clicks which are available. So for each market there is a optimal amount to spend-that amount can be determined after a couple months. If your market is larger or smaller than Denver, then your optimal maximum budget should be adjusted accordingly. Of if you don’t have a huge advertising budget, then you can specify a lesser amount. We recommend companies start with a minimum of $125. We’re convinced, once you’ve tried web-based advertising, that you’ll get results and choose to stick with it.