Building a Fast-Growth Local Advertising Business: Yodle Co-founders Ben Rubenstein and John Berkowitz (Part 5)

Sramana: Let’s talk some about the technology at Yodle. What are the key technology components behind your offering?

John Berkowitz: We realized that it was not intuitive for small businesses to go online and set up a paid search campaign. Most of them do not have the time or expertise to manage the nuances of such a campaign. They don’t know which of the hundreds of keywords are the most appropriate, nor do they know what type of advertising they should be showing. They can’t easily keep track of how much they have been paying.

The first thing we built was an algorithm that makes those key decisions based on results. The business owner can say that they want to be in a certain position at a certain time and day, and they can pay a certain amount of money for that position. We track all of the activity associated with the campaign. We put call tracking numbers on the website and analyze the traffic on the website to determine what a small business should be paying and where their ads should be showing and not showing. Our system can automatically make those decisions and changes for them.

On the back end, we know that small businesses are very much cash strapped and question everything they do. We gave them full transparency. Small businesses may have known that 50% of their advertising was working, they just did not know which 50% was working. We gave them a platform that lets them track every aspect of what we do for them. They can see the phone calls, where they are coming from, and the time of day people are coming to their website.

Ben Rubenstein: We have 850 employees and 36,000 customers. Another key aspect of our technology is in our service tooling. We built a lot of technology in house to allow us to sell to a lot of customers in a very efficient manner. We have our own CRM and we have a phone-swapping technology that always shows a local area code when we call someone.

Sramana: What is the price point of your offering? I would also like to know who your competition used to be and who your competition is today.

Ben Rubenstein: We have clients that spend $200 a month, and we have clients that spend $155,000 a month.

John Berkowitz: In the beginning our competition was Yellow Pages. Today everybody is pitching something to small businesses to help them get online. The challenges today are much different.

Sramana: How are you priced? Is it a percentage of advertising under management?

Ben Rubenstein: Our clients are not doing SEO nationally. Local SEO is more important for them. Our maps product is all about local optimization and getting you ranked high there.

John Berkowitz: There are multiple products in our offering today. We have optimized our paid search product. We have also developed an organic product and a display product that is provided to our national advertisers. The billing model is different for every product. Organic search is a fixed fee, and PPC products are percentage based.

This segment is part 5 in the series : Building a Fast-Growth Local Advertising Business: Yodle Co-founders Ben Rubenstein and John Berkowitz
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