ReachLocal Retrenches to Focus on Markets with ‘Potential for Positive, Sustainable Economics’


Local digital marketing firm ReachLocal, which has been engaged in a long and difficult turnaround effort, told investors on Friday that it was retrenching further, exiting from direct sales in the U.K. to focus on “only on markets with the potential for positive, sustainable economics and contribution margin.” The company also announced 2015 operating expenses would be approximately 25 percent lower than 2014 levels, and that it planned to reduce expenses by an additional 15 percent in 2016, citing “already implemented and planned efficiency programs.” ReachLocal said it had entered a series of financing agreements with its largest shareholders to provide the company with additional liquidity to fund future growth.

Reduced costs, an improved cash position, and the resulting raised EBITA outlook are storylines that appeal to Wall Street. ReachLocal upped its Q4 EBITDA guidance, projecting a revised range of $2.4 to $3.0 million, substantially higher than the prior range of $0.8 million to $1.4 million. The company’s stock, which had declined around 70 percent since the beginning of the year, rose sharply on Friday following the news.

However, those storylines don’t necessarily reflect progress for ReachLocal on Main Street. The company left its Q4 revenue outlook unchanged, indicating it is still focused on cutting things that aren’t working rather than regaining growth momentum.

ReachLocal is entering the second year of its turnaround effort. When Street Fight spoke with ReachLocal CEO Sharon Rowlands in August 2014, she had been in the job for approximately four months. She acknowledged the company had “made some tactical mistakes on the execution front” and “gotten distracted by new shiny things,” but maintained the problems were “all very fixable,” adding “it’s all blocking and tackling; it doesn’t happen overnight.” Rowlands said ReachLocal was investing heavily in product development to develop a comprehensive, integrated solution for SMBs, noting “2015 will be a big year for us.”

Just over a year later, on the eve of the Street Fight Summit, we sat down with Rowlands again. She reaffirmed the need to offer a full suite of services. “A lot of companies started with a one-product solution — ReachLocal in search and other companies in email marketing or social,” she said. “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.”

The latest announcement suggests ReachLocal is stockpiling cash to continue financing that expansion. Repositioning and restructuring a company take time, perhaps more time than Rowlands initially anticipated in a hotly contested market. Unless and until business picks up, ReachLocal also may need those funds to maintain the status quo.

Noah Elkin is Street Fight’s managing editor.

  1. December 22, 2015

    Reachlocal UK was shut down in part due to the fact that they had millions of pounds worth of claims against them. The company’s sales people (or the good ones) then left to start their own companies when they realised that the UK market was about to be exposed to what ReachLocal UK actually do with the budgets. The US and Australian markets are still unaware BUT fortunately we have the entire list of clients and will be starting a campaign in January to inform them of what is happening to their budgets. Sharon Rowlands has a lot of problems on the horizon which she has refused to address. She also has a lot of unhappy ex-clients that she has refused to recompense.

  2. Swiss Toni
    December 23, 2015

    Interesting to see PPC Claim so critical of ReachLocal’s business practices knowing
    their connection with Kieran Cassidy transparency. Why are you associating yourself with someone like that? I wonder whether customers of Vehicle Seller ever recompensed?

    1. ReachLocal
      December 28, 2015

      Swiss Toni – You are right. Kieran Cassidy is actually a 50% owner of PPC Claims and has a well-publicized history of operating companies which deliberately misled the public. (And PPC Claims is a wholly owned subsidiary of Trafiki, a competitor of ReachLocal.) In fact, Kieran Cassidy is a disqualified director, and is barred from acting as a director and forming, promoting and managing businesses in the UK until 2021.

      See for yourself:

      We have no problem sharing our business practices. See here for how we operate: or better yet contact us at!

  3. March 3, 2016

    swissSwiss Toni what difference ? Lets talk about the clients in the UK that were left high and dry ? The administrators report Section 3.3 “The declining revenues were the result of both increased competition in the sector and reputational damage caused by a number of alleged mis-selling claims brought by former customers.”

    Section 3.4 goes on to say “Whilst the Company took steps to resolve these claims, management also decided to explore the possibility of a sale and subsequently received an expression of interest from the Competitor to purchase the Company’s business and assets.”

  4. March 3, 2016

    So @swiss@disqus_SIdzNjWNNi:disqus Reachlocal essentially left the UK rather than answer a number of law suits in the UK. Plus this is not a unique situation as Sharon suggests on a quarterly call, Australia and the US are also unaware of the hidden margins.

  5. March 22, 2016

    Street Fight

    PPC Claim



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    PPC Claim • a few seconds ago

    Look what we have managed to find online about Reachlocal


    63 complaints, headlines as follows

    ReachLocal – Worst SEO company possible, (client in Tempe in Arizona)

    ReachLocal – Worst Experience Ever (client in Huntington Beach California)

    ReachLocal Is a Premier Global Partner of Google’s (mole)

    ReachLocal – Talk Big with Zero Results, (Client in Edmonton Alberta)

    ReachLocal – Reach Local ripp offfffff, (client in Ottawa Ontario)

    ReachLocal – They chasing targets not customer solutions, (Melbourne, Victoria)

    ReachLocal – Wow, cant believe we all got ripped off (Hoddesdon England)

    ReachLocal – Deception and Misleading Conduct (Ventura California)

    ReachLocal – Dont touch them (Melbourne Victoria)

    ReachLocal did not provide me with what I paid for

    Reachlocal keep 60% of the entire spend for themselves

    ReachLocal – This website proves there is justice, please heed the complaints presented here (Hillsboro, Oregon)

    ReachLocal – NOT ONE LEAD !! ASK FOR A REFUND IT WAS SO BAD! (Los Altos, California)

    ReachLocal – Just one Month into Contract (West Palm Beach Florida)

    ReachLocal – Liars, Scammers, Thieves…(Cibolo Texas)

    ReachLocal – Waste of Money, Don’t contract this service. Was coned into this but the person telling me they will get great results. (Saugus, Massachusetts)


    Reachlocal – BIG FRAUD CASE (London, UK)

    ReachLocal – Reach Local should be shut down!!

    ReachLocal – At a more ways than one! (Orlando, Florida)

    ReachLocal – First two months work perfect and then nothing


    ReachLocal – Simple Review #1410141334 (winter Springs Florida)

    ReachLocal – Local? leads from Out of State!; No Cancellation (Chicago, Illinois)

    ReachLocal – No visibility of adwords, lies and pocketing 50% of your money!!!!! (London UK)

    ReachLocal – Reach Local – go elsewhere, wish I had

    ReachLocal – Everything was fine and then……….nothing, zero, nada

    ReachLocal – No ReTargetgin Campaign

    ReachLocal – Lack of support with poor performance. Bad terms and conditions (colombus Ohio)

    ReachLocal – I should have just flushed $3,300 down a toilet (Milwaukee, Wisconsin)

    ReachLocal – Reach Local are the Devil’s advocate


    ReachLocal – Told to go to ***.


    ReachLocal – Act like they invented online marketing

    ReachLocal – Do Not Use Reach Local!!!!!!!!!! (Houston, Texas)

    ReachLocal ripped off (Houston Texas)

    ReachLocal – Do not use

    ReachLocal – Still reeling after almost a year

    ReachLocal – Very Unethical company

    ReachLocal – Vice president

    ReachLocal – Reach Local – RIP OFF

    ReachLocal – Terrible Results – complete WASTE OF MONEY

    ReachLocal – Never Do Business with Reach Local. They Are Not To Be Trusted!

    ReachLocal is not Competent

    ReachLocal – Reach Local is way too expensive

    ReachLocal is a SCAM “BIG PROMISES” no results!

    ReachLocal – Lied, did nothing, and stole my money.

    AVOID REACHLOCAL for your Biz Marketing!

    ReachLocal Does Not Know What They Are Doing

    ReachLocal – Reach Local’s Sale Scams! Don’t Trust!

    ReachLocal is a Scam that the IMC doesn’t even understand

    Do not believe ReachLocal, SCAM, SCAM, SCAM!

    ReachLocal – Asked for Targeted Program and Got Worthless Keywords Instead

    ReachLocal – Reach Local has no business ethics


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