Citysearch Ad Buyer Beware
Citysearch.com, founded in 1995, is a major player in the local search market. The site now attracts 20,000,000 unique visitors each month, making it one of the most popular websites in the U.S.
Not only is the site highly trafficked, it’s also highly profitable. The company’s “pay-for-performance” ad program generates an average of $500 per month per advertiser, or $6,000 per year, as reported by Ann Meyer of the Chicago Tribune. If accurate, Citysearch, with its 50,000 advertisers, earns $300 million annually.
For clients, Citysearch promises to reach customers who “are looking to make smarter decisions about where to spend their time and money”. The Business Profile has the “look-and-feel of an editorial review” and featured listings help one “stand out from the competition.”
An advertiser pays for views of their profile – presumably highly targeted views, driven by visitors performing searches within the site (e.g. a category and location). While they do offer reports on the number of visitors to one’s profile, Citysearch does not report where those visitors originated.
Cashing in with search arbitrage
Arbitrage involves taking advantage of a price differential between two or more markets. In the case of Citysearch, the two markets are Google’s AdWords and their own “pay-for-performance” program. The price discrepancy? The cost of a keyword and the earnings per profile view.
Citysearch buys keywords using AdWords (as well as with Yahoo! and other search engines) and then directs a visitor, not to their homepage, but to a sponsored listing, offsetting the purchase price of the click and potentially earning a profit.
Industry estimates of the company’s AdWord spending are in the $100 million dollar range. If true, Citysearch spends one-third of its revenues on search. The company releases no information on the revenues garnered from this practice, but it must be hugely profitable - AdWord prices are driven by free market economics; Citysearch is a closed system driven by sales and marketing.
According to Adwords, the phrase, “new york ethnic food” costs an average of $.34. Citysearch earns $.75 for this restaurant profile view – a $.41 profit. More sought after keywords like “new york restaurants” cost between $.62 and .$78. Even if the cost of a click is break-even, any further exploration on the part of a user is gravy. Many clicks on AdSense affilliates (at least in the restaurant space) can be purchsed for between $.10 and $.20.
And because it so effectively monetizes paid-for-views, Citysearch is able to spend with abandon. AdWord clicks are not nearly as targeted as they are within the company’s internal database search. One need only explore Citysearch’s sponsored listings in Google. After a search for “fast food new york” I was directed to a fine dining establishment. A search for “restaurant 10028” yielded a restaurant in the zip code 10036. A search for “restaurant upper east side” led me to an eatery in Tribeca. It would appear that Citysearch is merely sloughing off paid-for page views to max out an advertiser’s budget.
A Citysearch PR Rep discussed the role of paid search listings with Peter Krasilovsky,
“Currently, we have a relationship with Google that not only sends traffic to Citysearch.com but to our customers’ websites as well. This product directly connects our customers’ websites to consumers searching for their type of business across our partner network.”
I encountered the term ‘affiliate network’ on a recent call with a sales representative at Citysearch. While she was quick to highlight the role of keywords in the company’s internal database search, she only mentioned affiliiate advertising after several minutes of questioning. She failed to mention Citysearch’s made for AdWords landing pages.
Seperate landing pages?
If Citysearch had the best interest of its advertisers in mind, they wouldn’t offer separate landing pages for restaurants found organically and restaurants found through Google AdWords. The only rationale for serving up two different versions - to drive traffic to other sponsored listings - runs counter to an advertiser’s best interest.
Listing as it normally appears
The sponsored results, misleadingly labeled as “Also Recommended for You”, is prominently featured to the right of the AdWords landing page. A user must click “learn more about _______” before seeing the complete profile page with detailed information and easy access to user reviews.
For businesses looking to expand their reach, full disclosure of traffic sources should be a prerequisite for joining the Citysearch network. Traffic driven through AdWords is worth less than traffic driven through Citysearch’s targeted internal search. A made-for-AdWords profile should cost less than a full profile.
For the internet savvy, money is better spent building a website and buying highly relevant keywords through Google.
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[…] Contact the Webmaster Link to Article yahoo Citysearch Takes Advertisers For a Ride » Posted at The Blog at BlogSoop - […]
What do you think of their restaurant guides in general?
[…] In many cases the practice goes counter to an advertiser’s best interests. AdWords clicks tend to be less targeted than site wide search. Citysearch has created AdWord specific landing pages that increase the likelihood that a visitor will navigate away from a landing page to other sponsored listings. I explore the topic in a rantish indictment of search arbitrage. […]
Kevin -
I tend not to trust them because of the bias inherent in any membership driven network.
But if somebody finds them helpful, I think they may have value.
Hi,
I had a terrible experience with Citysearch in Jan of 2007 and wrote a blog article about it to warn other small business owners: http://aldebaranwebdesign.com/blog/my-adventure-with-city-search-pay-per-click-advertising-and-click-fraud/
Since then, many other people have added their comments about how their experiences and it certainly seems that Citysearch is not the most reputable pay per click out there. GoogleAdWords is much better, more control, more transparent.
Sure, Citysearch.com is guilty as charged for most of the accusations mentioned above. I could not agree more w/ the fact that their price per click is significantly higher than it should be, however, for the local advertiser there just aren’t many options that can compete w/ the traffic Citysearch.com drive to a customers website. Although I assume 40% of this traffic is bogus, the remaining 60% often times turns into business for 1 of 3 or 4 Citysearch.com customers. I worked for this company for 5 years and did not agree w/ everything that was done, but I’ve never represented a product that performed better than the product Citysearch.com sells. As an internet marketing consultant and business owner understanding this game, i believe that your success with Citysearch will be controlled by the honesty and integrity of the sales representative serving you. Jason Nelson is an excellent sales rep who represents his clients and Citysearch.com very well. He represents approx 50 of our internet marketing clients. Contact him at jason_nelson@citysearch.com. For Google Adwords Strategy and management contact TriMark Solutions.
I did a 3 month contract with them, and wish I had never agreed in the first place. I did not get from the begining any help in creating a ad, and when they did after 1 1/2 months of my contract they misspelled words, and I had to in the end create one myself. Then when the 3 months was up, I kept getting billed and when I tried to cancel I was emailed a bill at 2 1/2 times what the monthly rate was. Anyone else experience this?
Wow! This is all very interesting to me. I just ended a very unsatisfactory relationship with Citysearch and I feel as if their actions and policies bordered on being misleading, if not downright unethical.
I was given the “hard sell” in the beginning - they jumped through hoops to get me to sign a contract, and now I know why: once they got me into the monthly billing, it was almost impossible to get out of it.
In the beginning, there were lots of problems - it took
almost a month to get my listing right - there were constant mispellings, mistakes and glitches.
But once it was up, I started getting billed for huge amounts of money - even though I never got EVEN ONE
INQUIRY OR CALL about my business. And there’s no way to prove or disprove how many clicks I really got.
After 2 months, I finally decided to end my membership in July. I was told I’d get one more bill. But instead, I continued getting bills up until early September. And here’s the wierdest part: the last two bills were for the EXACT SAME AMOUNT…TO THE PENNY. When I tried to get a refund on the last bill, I got tremendous push-back. I finally threatened to talk to the Supervisor, and then they relinquished and said I’d get a refund.
In all, I spent almost $1K during a 3 month period, and
never even got ONE call from someone who saw my listing. By contrast, a $150 ad in the neighborhood paper usually yields about 3 calls. But I was “sold”
on CS by them telling me how much more reach I would
get advertising online with them.
I find all of this extremely disturbing. But I didn’t know if my experience was the exception or if others had
had problems, too.
I think these stories need to come to light.
We are getting ripped off BIG TIME.
I began my ad campaign with citysearch in July 09, after the hard sell and almost guaranteed referrals. My ad never was presented correctly and my work catagories were incorrect. I received email advance notice that my ad was working and that my billing was forthcomeing. I never got a bill. I gues that I lucked out that my credit card was cancelled due to suspected fraud (unrelated to citysearch) and citysearch could not get the charges approved. By that time, I had been in constant contact with account@citysearch.com via email and requested a full validation of clicks that they were charging for. To date, I have had no reply. Subsaquintly, ARM Solutions, the collection arm of citysearch has sent several threatening collection notices stating how bad a bad debt collection remark would be on my credit. Needles to say, neither Citysearch nor ARM Soultions has responded to my many emails and letters. The next step would be to contact the US AQttorneys General and file a fraud claim against Citysearch. Wish me luck.
I began my ad campaign with citysearch in July 09, after the hard sell and almost guaranteed referrals. My ad never was presented correctly and my work catagories were incorrect. I received email advance notice that my ad was working and that my billing was forthcomeing. I never got a bill. I gues that I lucked out that my credit card was cancelled due to suspected fraud (unrelated to citysearch) and citysearch could not get the charges approved. By that time, I had been in constant contact with myaccount@citysearch.com via email and requested a full validation of clicks that they were charging for. To date, I have had no reply. Subsaquintly, ARM Solutions, the collection arm of citysearch has sent several threatening collection notices stating how bad a bad debt collection remark would be on my credit. Needles to say, neither Citysearch nor ARM Soultions has responded to my many emails and letters. The next step would be to contact the US AQttorneys General and file a fraud claim against Citysearch. Wish me luck.
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