Could this be one of the reasons the stock is at an all-time low Today?
Super Media receives the honor of being the first company on my SEM Scam list. Next on the hit list is Reach Local. They have many of the same problems as Super Media.
We have all heard “If it sounds to good to be true, it probably is.” Why then do we not listen to our guts when some smooth talking salesman from Super Media, or Yellow Pages, or Dex talks us into an appointment, and then delivers a perfect speech, with just the right amount of pressure to get us to sign a long term (12 month) contract for an internet marketing program?
I will preface this list by telling all of you that I am a former employee of Idearc Media, now Super Media. That is how I know some of the things I know. Before anyone decides that I am disgruntled, let me say that I am only upset, because Idearc Media made a liar out of me. I wanted to believe in this company, and from day one in training, I saw signs posted all around the training room that spoke of Integrity, and always doing the right thing. The trainers even spoke of NEVER selling a client anything they don’t need, and even implied that you could be terminated for such behavior. Then I got out of training, and stepped into the real world. That is when things went sour. Not because of a boss, or fellow employee, but because when I smell B.S. I ask questions, and that is not perceived very well in the corporate world.
Long story short – I was excited about the “new” SEM packages that Idearc was offering, and I bought in 100%. I hit the streets running, and sold a good amount of these programs, in addition to selling their other products, Yellowpages, and Direct Mail. I was a top 5 sales rep (top 3 for a while and tops on my team for a few months) and made over $75,000 my 1st year. Then the reports for my clients SEM program started rolling in, and let’s just say that the news was not good. There was red flag, after red flag.
Now you reap the rewards of what I learned about Super Media Programs, as well as their competitors. Listed below are the reasons I can think of why you should run from this SEM program, FAST, and don’t look back. These are just he one’s I can think of – there are more.
Reasons Super Media is a Scam.
- Bid Management Software – I am sure that if you have been pitched by a rep from Super Media, you have heard about their wonderful Bid Management Software. Probably heard how this “proprietary” software can save you big bucks by managing your bids for you. They have a slide (that was once one of my favorites) that shows the Bidding Time Zone – and how the bids can fluctuate by the minute, and if you are not watching your bids constantly, you will overpay. This is complete BS!
- I sat in on a meeting once where the presenter was a middle manager out of the Dallas Office, and she worked with the CSS (Client Service Specialists) who allegedly run these PPC programs. She said, in response to a question about the Bid Management Software changing bids by the minute, “Oh that program isn’t designed for that, it is designed to SPEND THE BUDGET WHERE EVER IT CAN BE SPENT.” At the time, I wrote this down because I could not believe she said it, and could not believe it was true. Suddenly the questions I had about why 80% or more of my clients’ budget was being spent on Superpages.com and not Google was answered. (Since Idearc/Super Media owns Superpages.com, every click is pure profit, vs. Google clicks which they claim to not mark up.) Of course, if you caught this (or the client caught it) they would apologize, say that they are not sure what happened and offer to credit some of the clicks back. Problem is, I saw this happen again, and again.
- Long Term Contracts – for internet programs that take a couple of hours to set up, and can be paused or disabled with the click of a button.
- I understand a company needing to be profitable, but when a company loses all integrity, and put’s profits before truly helping the client, there is a problem
- They have 3, and 6 month contracts, however, the sales representatives (yes, sales reps, not Marketing Consultants as these reps do not have any training or education in Marketing!) Are trained to not tell you about the 3 and 6 month terms. The entire sales environment is designed to encourage this behavior, because if they sign you up for a 6 month term, the reps commission is cut in half. A 3 month term gets them paid a mere 25% of what they would get for a full 12 month contract.
- News Flash for Super Media, you can not apply Yellow Page business practices to the internet!!! If you don’t like not offering contracts, get out of the internet marketing arena.If you truly get clients a return on their investment, you would not need to lock them into contracts. Business owners do not mind spending money to make money.
- Broad Matching of keywords.
- This is an effort to spend your budget every month.
- Generates the most traffic, but usually not the best traffic
- Broad match results in more impressions, lower Click thru Rate, which results in a lower Quality Score, which means you pay more for some clicks.
- Large workloads – for the CSS reps (the reps that are paid to “Manage” your campaigns)
- When the product was 1st rolled out, we were told that each CSS would have only 8 clients they would be responsible for. (If it sounds too good to be true, it probably is)
- 1st Question I had was, if we are not marking up the clicks on Google, how are we making any money? (remember, I was employed there)
- $500 x 8 accounts per rep = $4,000 per month x 12 months = $48,000 per year, per rep in revenue. I am pretty sure these reps were making at least $50,000 per year, so where is the profit? Remember, I have not even added in the cost of having a rep @ $50,000 per year. True COST (When you add in payroll taxes, unemployment insurance, health insurance, building, computer, phone lines etc. etc. etc.) for the company would be around $75,000 per year per rep.
- Then I was told by a CSS rep I got to know (not by my boss, or trainer) that the reps were now responsible for 20 accounts each. (I was still telling potential customers that “each rep only has 8 accounts…this is one way they made a liar out of me) This is still not enough profit for a 3 Billion dollar a year company to justify the burden of running SEM programs.
- Then it went to 40
- Then 80
- Then 120 accounts PER REP!!!!!
- Now we are talking some serious profits. 120 account x $500 per month = $60,000 per month x 12 months = $720,000 per year in revenue per CSS Rep.
- Add in the clicks on Superpages.com – (that the Bid Management Software was generating) and you can hear the money rolling in. (see next point for more info on Superpages.com clicks.)
- Problem is, there is no way a CSS rep can manage this many accounts effectively. Again, I am OK with this – if they told the truth to the client up front. Remember at the beginning of this blog post I said the main problem is OVER PROMISE, UNDER DELIVER?
- Spend most of your budget on Superpages.com, and usually are good at convincing you that these clicks are better clicks than Google. WHAT???? Did you hear that? No way did a salesman just try to convince me that clicks on Superpages.com are better than Google clicks! Of course they need to convince you of this, because:
- They can’t make money on the management fees alone. See previous point if this isn’t making sense yet.
- History of lying –
- Said each CSS would only have 8 accounts
- Said their system changes the bids by the time of day
- Said they optimize your campaigns
- They can’t – because each CSS rep has to many accounts to handle
- I have seen clients’ reports on programs that were running for 6 months or more, and the average cost per click rarely fluctuates.
- No Analytics -They do not share (or even track) any real analytics data, preferring instead to gloss over
- Number of clicks you received
- Click thru ratio
- Average Cost Per Click
- Total cost
The pitch goes something like this (if you get a call from your rep after you signed up) “Mr. Customer, you received 250 clicks this month, if only 10% of those people converted into customers, you acquired 25 new customers this month, and you told me that each customer was worth $500 on average. That means that for your $1,000 investment, I brought you $12,500 in revenue!!” Or they will say you received “50 phone calls this month, if only 10% of those”, Well you get the idea….
There are many things wrong with this.
- Clicks DO NOT equal customers!
- 10% conversion ratio for the clicks on your website would be phenomenal! The average is 1-3% click thru ratio, and then if you are lucky 2% of those will result in either a phone call, or a form completion.
- $12,500 of revenue DOES NOT equal $12,500 of profit! If you are like most business, after expenses, you are lucky if you profit 20 points….. I.E. of $12,500 (which is way overestimated) you would be lucky if you profited $2,500….and you probably worked a long time for that $12,500 in revenue.
The reality is – Super Media lies to sales reps, get’s them to believe this product is the best things out there, and these reps are very convincing.
My theory is that Super Media appears to be signing small business owners up, loading every keyword under the sun, Broad matching the keywords (to maximize impressions), putting in a large bid (to get you in the top 3 of the PPC results) and never looking at the program again (until someone calls in to complain that they don’t know what they are getting for their $1,000 per month.) They are being reactive, not proactive as they would have you believe. This is a recipe for disaster, and a guaranteed way to waste a lot of your hard earned money.
Success on the Internet begins with Analytics (understanding what visitors are doing on your site, where they are coming from etc. etc.) NOT Search Engine Marketing (PPC.)
When I think of Analytics I am reminded of a saying – “Knowledge equals power.”
When I think of Super Media’s Search Engine Marketing Pitch, I think “If it sounds too good to be true, it probably is.”
These reasons outlined in this post are the reason I started my company, ProAdInsight.
The reality is that to succeed on the internet, you need to:
1) Make monthly updates to your website
2) Optimize your Website (Search Engine Optimization)
3) Run effective Search Engine Marketing (Pay Per Click) Campaigns
4) Use Website Analytics such as Google Analytics
For less money than Super Media’s Management Fee – you can have all of the above.
For more information on how ProAdInsight provides you with all the pieces of the internet puzzle, and not just on piece (PPC,) please see our website at http://www.proadinsight.com
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Good luck on your internet marketing, and if you would like a Free, No Obligation, NO Sales tactics used consultation, Contact US.
I hope you enjoyed the insights from Chad. Interesting perspective on what is wrong with the companies product offering. In my opinion, search engine marketing is not a product, it is not something you can buy off of a shelf. Search engine marketing is 90% service. Service has always been a challenge, and with Klein’s focus on sending the service to India or less experienced cheaper workers is a big mistake. You really need to shift your commission sales reps back into the service, but like GM and many other industries who have had to evolve, that would require investment in retooling the company. Something you merger and aquisition liquidators have very little experience with.