ReachLocal’s Rowlands: In Order to Stay Relevant with Your Market, You Have No Choice But to Broaden

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ReachLocal has been an influential player in local online marketing since 2005, when it first offered small businesses the opportunity to advertise on search engines and directories. But the company has struggled in recent years, and it hired Sharon Rowlands as CEO last year in an effort to rebuild its market position. Street Fight caught up with Rowlands for a conversation about digital marketing’s “one-stop shop” mentality, how the industry is making things more complicated for business owners, and what services SMBs should prioritize.

Rowlands will join us as a speaker at the Street Fight Summit in New York on October 20th. Click here for more info and to buy tickets.

ReachLocal CEO Sharon Rowlands

When you last spoke to Street Fight six months ago, the conversation was largely about the issues that plague the small business marketing industry as a whole. Do you think businesses and brands are becoming more knowledgeable about what makes for an effective digital marketing strategy?
Businesses are definitely becoming more knowledgeable around the importance of having an effective digital marketing strategy, and we’ve also noticed that our customers are getting savvier. At the same time, though, I think it’s becoming more complicated. Just as businesses are coming to grips with how to be effective regarding, say, search engine marketing, now they have to grapple with social media too.

There’s another level of confusion around “What do I need to be doing?” “What don’t I need to be doing?” “What’s going to be effective for me?” And then you layer the whole mobile agenda across that. I think we’re going into a phase of having so many choices and options for businesses that there’s a whole other struggle.

Do you think that offering an all-in-one marketing solution is a way to break away from those problems?
I do. I think the more a solution can be simplified, the easier it becomes for businesses to understand. But solutions have to work, and it’s not enough just to have an all-in-one offering. That’s got to be coupled with a really effective solution that’s relevant to a particular business. You have to take into account vertical needs. I don’t think it’s possible to come up with a solution that’s the same for every vertical, because what retail needs is very different from a service business. Whether you’re trying to drive traffic into a store or make the phone ring, those objectives have to be considered.

Have we reached a point in small business marketing where there’s pressure to offer a full suite of services?
There is pressure. A lot of companies started with a one-product solution — ReachLocal in search and other companies in email marketing or social. But our customers’ needs evolved, and they needed more than that one product. In order to stay relevant with your market, you have no choice but to broaden.

What’s key, though, is companies understanding how all these things work together as a seamless solution, and not creating a Frankenstein that’s made up of five different products mashed together. We’re seeing a lot of digital marketing companies moving toward this one-stop-shop marketing approach, and it’s being driven by the fact that SMBs are using multiple solutions. We did research among our client base, and we identified that a lot of our customers are using about seven different digital tools and multiple vendors. That comes with overhead and complexity. If it’s possible to have all those things together, so you’re working off of one infrastructure, clearly that has a lot of potential advantages.

Which services are absolutely vital for small businesses to prioritize?
If I were advising a business, the first thing I’d say is they’ve got to have a digital presence. That has to be the number-one thing. You just have to get found. Having a base digital presence where you’ve claimed your Google listings, you’ve got your Yelp profile sorted, your name and address are turning up in all the appropriate directories — that’s foundational. Second, you should have a strong website that’s mobile-optimized. To me, those are the things you absolutely have to have. From there, depending on your customer base, you’ve got to think about what’s going to be the most effective lead generation solution for you. If you want to make your phone ring, then you have to start thinking about search engine optimization and retargeting.

Platforms like Google and Facebook offer some degree of small business marketing. How do those big names affect ReachLocal?
We leverage them, and the fact that there are more and more players is actually good for our business. Fragmentation supports our value proposition, because our platform essentially sits as a layer across all the various publishers. So the fact that you’ve got Yahoo getting more aggressive in search with its Gemini platform, Bing revitalizing its platform — that’s very good for ReachLocal, because we optimize across all of them, and the more inventory there is across different publishers, the more we can do in getting the best, most cost-effective leads for our clients. With Facebook coming into the market, with Yelp opening up its API, that means we can now start to optimize across those publishers as well.

You came to ReachLocal at a turbulent time for the company. What have you observed about the digital marketing space within the context of ReachLocal’s turnaround?
It’s a very competitive and fragmented market, and there’s been a great deal of innovation. Because it’s a large space that’s still growing, it’s attracted a lot of investment, so you’ve got loads of entrepreneurs and startups in the space. That’s very healthy for the industry.

For the small business owner, though, it’s very challenging. SMBs are getting multiple calls a day, and everybody’s got something that’s going to help them with their business: “We can get you a better website,” “We can get you more clicks.” Typically, small business owners don’t have time to evaluate these solutions.

Over the next couple of years, there’s going to be industry consolidation and a bit of a shake-up, because it’s just too hard to sell into this particular market with the number of players that exist today.

Annie Melton is Street Fight’s news editor.

This interview has been edited for length and clarity.