Inventing the Circle

There’s no shortage of companies trying different ways to get small local businesses to make the jump to online advertising. Google, Yahoo!, MSN and A9 are all out there beating the bushes to set up business profiles for local enterprises that don’t now have their own Web sites. And the Internet Yellow Pages directories are putting their sales forces into motion to convince Mom and Pop concerns that they, too, can have a prominent online presence with a minimal investment of time, if not of money.

So what’s so different about, which just came out of its beta phase on Monday? It’s a combination of the ease of set-up and the broad range of tools that the company can make available to its merchant advertisers, who now number more than 5,000.

As co-founder Ben Smith lays it out, Merchant Circle aims to give small local businesses greater visibility with search engines by providing them with a hosted Web page that will get indexed readily by search bots. In other words, merchant Circle isn’t planning to build itself into a destination site for online shoppers; instead, it wants to make it easier for users of Google, Yahoo! and other search engines to locate their local providers for home remodeling services or bicycle repairs.

The other difference is in the tool set that Merchant Circle offers members in its network for promoting their businesses: not just searchable pages. Companies can also upload photos to their pages, create ads and Web coupons, distribute e-mail newsletters, post blogs and even buy direct mail.

Merchant circle offers several tiers of service for a monthly subscription fee. Merchants can “claim” the Web page that has already been created for them from data scraped from the Web by simply going to and authorizing the site. They can beef up the profile with more data and, if they wish, use that as their primary Web site. For $29.95 a month, the network will deliver one paid ad monthly to engines such as Google and Yahoo!, and members have the ability to send an e-mail newsletter to 500 of their best customers. For $99.95 a month, members get four rotating search ads and can mail to an unlimited customer base. It’s not known how many of those 5,000 members are paid subscribers.

Merchant Circle also runs contextual ads on newspaper sites in the Quigo network and is working on launching a display ad network with newspaper publishers. The company also hopes to be able to add audio promos on the 1-800-Free411 phone directory service run by Jingle Networks.

Merchant Circle began developing its platform in 2004 with funding from Rustic Canyon Ventures, the development fund set up by the Chandler family, former owners of the Times-Mirror newspaper chain. Bank of America Ventures and the Disney-operated Steamboat Ventures were also early investors.

Smith says the network is doubling its membership every four to six weeks at this point and has upwards of 750,000 member pages indexed on Google. Fully 36% of the members are creating their own content, either by uploading photos, writing blogs or producing newsletters. Thirty percent create four or more coupons or ads, and these are placed, on average, on 103 other sites.

Smith says he’s most surprised by the high uptake of the blogging feature. “Twenty to thirty percent of our merchants are blogging, and they’re blogging once or twice a week,” he says. “It was totally surprising to me that someone would actually take the time to do that. But when you think about it, what do they do every day? They communicate with customers, and blogs for them are another opportunity to communicate.”

His particular favorite is All American Gutter of Lemoyne PA. “This is a smart guy who runs a great business, I’m sure, but he clearly doesn’t know how to spell very well. But he writes regular blog entries about how and why to clean your gutters, and he’s very active on the system.” Another local merchant

Mission Grove Realty of Hemet CA is at the opposite end of that spectrum of Internet savvy, managing its own search marketing program on Google and MSN and handling both a main Web site and up to 50 targeted landing pages, but owner Christopher Walker still sees value in the added exposure that his firm gets from participating in the Merchant Circle network.

“Search the term ‘real estate’ on the web and see how many potential sites there are,” he says. “The World Wide Web is a giant parking structure filled with 300 million, 400 million cars. How’s somebody going to find mine? So you’ve got to attack it from multiple points.”

Walker says he particularly values the Web coupon feature of Merchant Circle. “if someone’s going through the site looking for a local dentist and a coupon for Mission Grove comes up with free moving or free notary services, that gets our name out there. I’m getting in front of them in a lot of different ways.” Since Walker was one of the first businesses in his area to join Merchant Circle and to create coupons, his coupons appear often when searchers look for businesses in his region.

Mission Grove also makes use of the blogging feature, turning out posts on local real estate market conditions in both Hemet and Yucaipa CA as well as service-oriented posts on holding out for a higher home price and avoiding negotiating traps.

While Walker can’t say that he’s generated any leads through blogging, he recognizes that simply doing the work can raise his company’s visibility on the search engines, which tend to give points for fresh content. “So we do use it, and we hope to keep providing good content and good information,” he says. “We’re not bloggers by any stretch of the imagination, but we have a lot of stored information, so it’s a pretty cut-and-paste task.”

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