You asked about ReachLocal business model. This is what I’ve found about their business model. The name of the CEO I was speaking with is Zorik Gordon. Actually, he didn’t buy my product but he did ask for my advice!
From their site:
Q: What factors determine whether my ad will be seen on search engines?
A: The keywords chosen will also influence your ad appearances. ReachLocal chooses the best keywords that will drive target customers to your site. The daily budget of your campaign will determine how often your ad will show, and its positioning.
Q: How do you charge?
A: We put a margin on the advertising fees charged by the search engines we use i.e. Google, Yahoo!…
Q: Hi, I’ve been looking at a company called Reach Local and wonder if anyone has any experience of working with them. I’m concerned that, whilst they may return good results, their reach or ability to generate volume is limited. Also, how do the search engines view the fact that they “mirror” the actual web-page? Thanks in advance
A: I’ve tested Reach Local out since January and was not happy with it. It was fairly easy and quick to implement and it was great being able to forward reports on to clients in the way of email. Whatever keywords you provide them with, they will expand into thousands of completely irrelevant keywords to generate a high volume of clicks – not necessarily focus on highly targeted, relevant keywords on your most profitable products / services.
They do not share their keyword lists with you to determine results on a keyword level to make optimizations.
In my experience with ReachLocal, my clients and I were very upset with the results we received and when handled manually, we saw a 90% decrease in costs, a significant jump in positioning, double the amount of clicks, and huge ROI. With Reachlocal, we were wasting money, getting few clicks, and no sales. We also got a significant amount of traffic from outside the state and country we were targeting.