LocalAdLink – Opportunity or Scam?

by | May 29, 2009


Recently, we’ve fielded a few calls about a relatively new company called Local AdLink. This company offers local businesses an “inexpensive” way to promote their website through Google Ad-Words. We decided to look into the company to see if their product is something we should be offering our clients. At a quick glance this looks like a decent opportunity to promote a companies website, but, upon closer investigation here’s what we discovered:

Product Overview: Local AdLink offers you 3 options for promoting your business. The monthly investment levels are $50, $100 & $200. Basically, you pick a few keywords that describe your business and anyone logging on to Google within a specified area (based on zip codes of your choosing), if that user types in your keywords, your business will be displayed either on the “Sponsored Links” across the top or “Sponsored Links” down the right side of your search results. These links usually cost between 5¢ and $1 per click, depending on how many companies are “bidding” on the term(s) you’ve selected. Considering this is a local search and not a nationwide search, almost all terms are going to be on the low side of this estimate.

Here’s what we’ve discovered:

1. The first thing we learned is that Local AdLink is MLM (Multi-Level Marketing). This immediately sent up a “caution flare”. Of the $50 to $200 monthly investment you spend, 50% of it is spent in commission to the person that sold you the sponsorship. Then, whoever signed him/her up gets a commission, and up the ‘pyramid’ your shrinking $200 goes. When its all said and done, you are probably getting $5-$10 worth of Google Ad-Words for your $200 investment.

2. We queried the Better Business Bureau to see how they viewed the company. The BBB rates them an “F“. This rating is described:

“We strongly question the company’s reliability for reasons such as that they have failed to respond to complaints, their advertising is grossly misleading, they are not in compliance with the law’s licensing or registration requirements, their complaints contain especially serious allegations, or the company’s industry is known for its fraudulent business practices.”

We also found numerous complaints on Rip Off Report (.com) as well as dozens of others.

3. Local AdLink posted a 12.8 million dollar operating loss in 2008 and a 5.1 million dollar loss through the end of February 2009. To correct this, they are planning a “Hard Launch” in June 2009 to boost sales.

4. The ad you sponsor does not take consumers to your website. It takes you to Local AdLink (.com)’s site, where you will find some information about your business. People are looking for your business’ website and are likely to click ‘back’ when they realize they are not going where they intended.

5. Finally, you are not guaranteed to even show up in the sponsored links. This means that if the keyword links are too expensive or highly contested; Local AdLink is not going to place you there because it’s not cost effective for them.

We all know advertising is difficult, especially online. If you are considering doing a Google Adwords campaign, go to Google and type in “Adwords”, they will teach you how to do it yourself. There also numerous books available at the book store on the topic. If you need any additional help you can always call us.

Here is an in-depth analysis of my personal experience of the Local AdLink presentation:

“If someone living in your city is looking for a pizza, they are going to go to Google and type ‘pizza’ and the Local AdLink clients name comes up at the top of the list, they click the link, then they print the coupon, call the company and buy the product.”

This is not how Google is used.

First, think of the town you live in. Now, let’s say your hungry for a pizza. You already know whom you are going to order it from. That particular restaurant has been advertising to you for years and has worked exhaustively to build a reputation with you the consumer.

Okay, that aside, let’s say you decide to try something new, and you go to Google to find a new place. Google users know if you just type “Pizza” you’ll get pizza restaurants from all over the world, the common user is going to type “Pizza, City, State”. Up come all the listings for pizza places in your city. There are probably 1 to 3 ads at the top of the list, then 5 to 6 ads down the right side, a Google map with everyone listed with a phone number and pin on a map and all the “Organic” results below that. Let’s assume the top ad is “Bill’s Pizza” and he’s a Local Ad Link guy. The consumer looks at the name of the business on the top of the ad “Bill’s Pizza” (Good!) and the URL (web address) they are going to link to “LocalAdLink.com” (BAD!) Consumers will more than likely skip that ad because they are expecting billspizza.com NOT localadlink.com they will think it’s a trick to get them somewhere they don’t want to go. Now, here is where the damage really comes in, if Bill’s Pizza has any other link in that search like an Adword, map link or organic result to billspizza.com they will likely skip it because they have already written it off as a trick to go to an unfamiliar URL.



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