Yes every product or service you buy locally has to account for the cost of getting sales and part of that cost is online advertising. Its nothing new for businesses to spend money on advertising but for many small business they simply cant compete with all the advertising and have no choice and pay HomeAdvisor™ for business leads but that money has to come from somewhere. When you buy services in Northern Illinois think about who is going to pay for the average $4,620 per year a small business has to pay just for basic membership.
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Google™ dominates search, so who do you think is going to be page one every time in every area, yup you guessed it probably Home Advisor™. HomeAdvisor™ should really should be called Home Advertiser business spend on HomeAdvisor™ because they are advertising more they can so potential customers will call them first over seeing the advertising a local business is doing directly. This can drive the costs of advertising up for all businesses. Nothing like paying money to your competitor to Advertise or having to pay more when bidding for local advertisement.
When Google™ partners with a company do you think your gonna google home adviser™ and easily see real non filtered reviews? Many larger company pay services to keep there rep looking good but can you imagine with the money and power and control Google™ partnering with home adviser and possibly making sure the top results are in there favor almost every time.
HomeAdvisor™ charges almost $300 per year for the basic service. Each of the leads sent to the contractors generate a variable fee, usually between $15 and $60+ per contractor and per lead. If you do the math and use an average rate of $30 per lead and an average of five contractors, Home Advisor™ generates $150 for the free service provided to the single prospective customer for the match. If a typical contractor receives 12 leads per month, they could conceptually pay $360 for these leads plus $25 of the prorated annual fee. That adds up to $4,620 per year. And paying for leads does not guarantee any revenue, just the opportunity to be introduced to the prospective customer. In fact, even if the customer is just window shopping for prices or trying to determine how much she’s saving by having her husband do the job, the non-refundable fee is charged to the contractor’s credit card.