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Interview with Zorik Gordon, ReachLocal

Zorik Gordon is head of Encino-based ReachLocal, a company in the local search space. ReachLocal is combining Internet marketing and local advertisers, and recently raised a round of funding from VantagePoint Venture Partners. I talked with Zorik a bit about the company's business, and to get a feel for how his company fits into the space.

BK: Congratulations on your recent funding. Explain to me more on what ReachLocal does, and how you fit into the local search space?

ZG: We use local search to bring Internet marketing within reach of every business, dramatically easing the process of finding customers online. We are not a search engine; neither are we engaged in search engine optimization or traditional search engine marketing. Instead, our proprietary, patent-pending advertising platform gives local businesses prominent placement on the leading search engines, along with online Yellow Pages companies and other popular commercial listings - while limiting the display of the ads to only those people who live within specific geographic areas. With the "pay-for-performance" model, advertisers pay only when users click on the ads to visit specific sites.

We're currently working with the Internet's leading pay-per-click search engine providers (Google, Overture), Internet Yellow Pages companies (SuperPages.com), paid inclusion providers (Yahoo!) and geo-targeted banner networks (Advertising.com). Additionally, we market local businesses on MSN and AOL through their inclusion in the Overture and Google networks.

Campaigns vary based on maximum budget, target duration, target geographic areas, and business category. The ReachLocal platform calculates the optimal publisher allocation for each campaign by considering many different variables, including individual publisher requirements and capabilities. The media the ReachLocal advertising platform purchases on behalf of the advertiser is based on executing hundreds of campaigns across multiple online publishers and publisher networks, and the ReachLocal platform is constantly refining its publisher allocation model as new publishers emerge.

BK: Where are you in terms of company launch, and do you currently have customers for your services?

ZG: We officially launched in February, and just recently passed the major milestone of our 1,000th online ad campaign. Before that time, we conducted roughly eight months of pre-launch test campaigns. ReachLocal is experiencing 50 percent month-by-month growth, fueled by partnerships with national franchise organizations and larger companies eager to let us localize their national online campaigns. Smaller, independent businesses are following the big companies' lead, and our geo-targeting capabilities ensure that the little guys get the same access as the big brands - ultimately bringing Internet advertising to Main Street.

BK: What are you using the new round of funding for?

ZG: The investment round will support our proprietary Internet marketing platform, which enlists popular search engines to help local businesses advertise and market themselves online, in a turnkey fashion. The proceeds will enable us to scale as a company, and continue to invest in both technology and marketing.

BK: Why did you decide to employ local sales representatives for (at least for many companies) has been designed to be a self-service process of placing advertising -- and what's the advantage of using ReachLocal instead of doing it yourself?

ZG: The eBay "power seller" model has real appeal for us. That's largely why we're cultivating a network of independent sales agents around the country who are selling the ReachLocal solution to businesses in their own areas. An agent can set up a ReachLocal account in less than 15 minutes, complete a profile of his or her client, set up a campaign and pay for it - at which point ReachLocal takes over, placing the campaign with various online publishers. Without the ReachLocal solution, agents could spend hours, if not days, picking keywords, figuring out bids and setting up accounts with each publisher. Agents are able to track the activity of all of their clients' campaigns with a single ReachLocal account.

The same thing applies to the individual advertiser - especially those for whom Internet marketing may be new. An advertiser sets up an account and creates a campaign -- a process that takes about 15 minutes. Then, ReachLocal takes over. The ReachLocal solution provides end-to-end management of the entire process, aggregating traffic by plugging into multiple publishers and automating many of the management tasks. It sets up accounts on behalf of advertisers with each online publisher, handles all search engine keyword selection and bidding (with an average of 5,000+ keywords per advertiser, including different keywords for each city serviced by the advertiser), and continually optimizes the campaigns to ensure that the highest possible number of leads are generated. For businesses that don't already have a Web presence, our solution even creates a website or time-sensitive offer page to be used for the campaign.

BK: Thanks!


 

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