ADVERTISING ON ANGIE’S LIST : 5 Things You Need to Know Before Signing the Dotted Line

…and Why We Chose to Sign NO longer recommend advertising with them for anyone.

If you run a business that has a lot of people coming in and out of your local location, you probably have had a public review or 2 online. Yelp is the front running service for most businesses but let’s talk about the “grandma” in this space – Angie’s List.

UPDATE – Read an update to this post where we get some insider info from a former Angie’s List sales agent. But you should still read this post first. Angie’s List Advertising : Part 2 – An Insider’s Perspective

THE YELP ADVERTISING EXPOSE – Read our assessment of advertising on Yelp, a massive 2500+ word article that covers potential scams, the secrets your Yelp ad didn’t tell you about & advertising performance.

I don’t have to try too hard to convince you to NOT advertise with Angie’s List. Just do a search for angie’s list advertising cost or angie’s list advertising reviews and read away. My math skills say that 99% of the articles and comments left by readers are negative. But what if you looked at the numbers and found it could actually be worthwhile?

If you’re thinking of advertising on Angie’s List, here is our tell-all experience of dealing with them, the good and the bad.

I recently embarked on the project of analyzing the ROI for an Angie’s List advertising campaign for a client. In the end, we made the decision to green light the purchase of an ad package but it was a close call on passing and it will definitely be a much closer decision at renewal time.

Update August 2020: And now that renewal time has come, we wholeheartedly do not recommend advertising with Angie’s List.

When your renewal time comes around, you get auto-renewed for the previous contract value. Scummy. And if you try to cancel, like we did given the economic downturn associated with COVID-19, you get hit with early termination fees of 35% or get sent to collections.

 

8. TERM, FEES, AND TERMINATION: The initial term of this Agreement shall be the longer of one (1) year following the Effective Date or, if Service Provider is participating in the Deals Program, the last date a Consumer redeems his or her Deal with Service Provider (“Initial Term”). On each anniversary of the Effective Date, the Agreement shall then automatically renew for an additional one (1) year term (“Renewal Terms”). Service Provider also agrees that, at the beginning of a Renewal Term, Angie’s List may increase the price of any Item or all Items up to 10% more than the price Service provider paid during the previous 12-month term for such Item(s). Service Provider may prevent the Agreement from automatically renewing by providing written notice to Angie’s List at least 30 days before the beginning of a new Renewal Term. If, however, Service Provider cancels the contract and such cancellation is effective prior to the end of the Initial Term or any Renewal Term, Service Provider agrees to pay an early termination fee of 35% of the unused value of the total contract for that Term. Angie’s List may terminate this Agreement at any time and for any reason. Additionally, this Agreement shall automatically terminate if Service Provider fails to continue meeting any of the eligibility requirements set forth under Section 1. Notwithstanding the foregoing, Sections 10-12, 14-15, and 17-20 will indefinitely survive any expiration or termination of this Agreement.

FIVE things to consider and do if you’re thinking of advertising on Angie’s List

1. Know what is going on with this business you’re considering advertising with.

While Angie’s List has been operating at a net loss for at least the past few years, other advertising platforms like Google AdWords have shown exponential growth. Investing your marketing dollar in Angie Hicks’ company is a risky proposition. They have very little transparency/reporting in their program and are nowhere close to regaining ground on other ad networks.

2. Ask them tons of questions.

Their salesmen work on commission and are willing to give you lots of information about your service category and your account; but they seem to drop off the face of the earth when you try to ask them for info after you sign up (I finally got emailed back). Base your business decisions on the actual data they provide you with and not on their sales tactics. Some of the sales tactics we were subject to included deadlines, threatening rate increases and having the ad position replaced by another company. All lies; don’t fall for them.

Here are the questions you need to ask :

1. How many members are in the region(s) I’m targeting?
2. How many searches for businesses similar to mine were conducted in the last 30 days, last 90 days and in the last 12 months (these are the only 3 time periods they can give you…)?
3. How many times have I appeared in those search results (# of impressions) in the last 30 days, last 90 days and in the last 12 months?
4. How many times has my profile been viewed last 30 days, last 90 days and in the last 12 months (# of clicks)?
5. How many companies are also advertising in this category?
6. Ask for a test login to see your business in search results compared to other businesses. From here look at:
   • # of reviews left for your competitors
   • How their profiles look compared to yours
   • Ask how competitor’s fared in advertising programs – their impressions & clicks (YMMV may vary on this one)

Important: For the last 30 / 90 days’ data, consider your industry’s seasonal fluctuations. If you sell Christmas trees and last month was June, last month’s data won’t mean much unless a lot of weirdos live in your neck of the woods. Adjust expectations accordingly.

3. Everything is negotiable.

Do not accept their first price.

We were able to lower our client’s yearly advertising rate by 20% after Angie increased it by 38% compared to the previous year.

Other anonymous reviews that I’ve seen on blogs commented that sometimes advertising rates each year increased by 400% and they were able to negotiate down their rate by over 60%.

The rates I’ve seen are all over the place – ranging from a mere $20 per month all the way up to$2,600 per month. The price is based on industry/category, membership and location. Want to get super sneaky? Call up the competition that is advertising and ask them how much they are paying.

4. Know the impact Angie has had on your business.

Are you tracking how your customers found you? Calculate your conversion rates and lead value from Angie’s List (I know, this may be dauntingly complex sentence but how to do this is information for another article). You will need this to compare to your lead acquisition cost.

At the very least, look at :

1. Your web analytics referrals to see how many came from Angie (they come from the root domain my.angieslist.com)
2. Number of messages received through Angie’s Business Center
3. Number of reviews received

5. Enhance your ad copy.

If you’re going to be paying for this ad, make sure to spend a considerable amount of time writing a great ad / coupon. Hire a marketing expert to write it if you have to. Remember that test login you asked the sales rep for? Write down the ad copy on the coupons that your competitors have written. Just remember that the text in the ad can make or break your ad package.

Angie’s List Advertising is Just Coupons – Sneaky Stuff

The way the advertising is structured is also very sneaky. You’re paying all this money simply to offer a coupon in the search results and on your profile page.

However, the default sorting method is to show businesses with coupons. On top of that, only 5 businesses FOURTEEN businesses (updated 1/12/2015) can offer coupons in a particular category.

So, you’re technically NOT paying to get to the top of the list. You’re just paying to offer a discount to people (yes, you have to offer an exclusive Angie’s List discount) and the default sorting method is to show the companies that offer discounts at the top of that list.

The Data

Here’s real data from the campaign we analyzed.

Unfortunately, we didn’t have full Google Analytics information, but we were still able to estimate that Angie gave us 262 profile views, which drove an estimated 70 website visits and 12 messages through Angie’s List Business Center. We also didn’t have phone leads available to us, but we were able to calculate that 6 jobs came from Angie’s List during the past year.

We calculated the average job price and value per lead and found that the average job price was greater than the cost per conversion and the lead value higher than the cost per click; this all lead to our decision to eventually go with the ad package.

Curiously, 2 reviews were left by people that didn’t initially find the business on A.L. but left reviews once they were done. So, more positive vibes for the assisted conversions!

These numbers are decent when comparing them with Yelp’s advertising numbers. With Yelp, this same client’s numbers look something like this:

*Yelp always delivers the ad in the top spot, while Angie’s List is rotating in position, so CTR is not a great comparative metric.

Yelp’s numbers are a bit better but the bottom-line is – are we getting a return on the advertising? For Angie’s, there is definitely a steady flow of leads and conversions.

Another thing to consider is Angie’s unique (read: bad) business model of charging members for access to the reviews. This creates a tendency for the members to really use the site as a first choice. It’s likely that some of the people using A.L. aren’t on other sites like Yelp so it really does benefit us to advertise on both sites.

Some Considerations

Category / Industry Efficiency

This was all done for a specific category of business on Angie’s List so pricing and statistics will differ for different categories. I won’t share the exact industry category this is for, but I will share that it is a service that all remodeling or building home owners need. If you really are curious, send us an email and we’ll share the categories.

My sneaking suspicion is Angie’s List is a useful advertising platform for services that is not an especially niche industry. I have no data to back this up yet, but the demographic that pays to read reviews it can view for free elsewhere is almost certainly an older crowd. Therefore, it would make sense that Angie’s List works well for businesses that serve home owners, an older demographic.

Number of Reviews on Angie’s List

In doing the research for this article on other business owners’ opinions of Angie’s List I found most recommend you have some reviews to be effective in their advertising program. This may seem like common sense, but it should really be mentioned.

If you have a goose egg for reviews and are the top search result but the company below you has 10 reviews and a high average rating, which company would you feel more confidence in hiring? Keep this in mind – if you have dramatically less reviews (or a dramatically lower average rating) than your competition that is also advertising, your success will not be as great as theirs and you will probably be better off taking your money elsewhere.

Update – How the New Package is Performing

The new ad package is performing very well for us. In fact, the results are suspiciously good since the only thing we’ve changed is the ad copy and a better looking logo.

In the first month (July 2014) compared to previous monthly averages:

– Ad clicks have nearly doubled (CPC also reduced to $4.52)

– Website visits have nearly doubled

– # of messages received has tripled

If you do choose to advertise with Angie’s List, make sure to email your rep each month or every 3 months for the performance of your campaign for the previous 30 days/90 days. As previously stated, they can only give you data for the last 30, 90 and 365 days; and the only way to get this information is to ask your sales rep for it. Otherwise, they’ll send you an email each month with some arbitrarynumber called Your Angie’s List Scorecard. It’s complete B.S. that provides absolutely no insight into your campaign and is designed to get you to upgrade to more services, like their Big Deals / Buy it Now nonsense

UPDATE 1/6/2015 : In the follow up article to this post, we found out that this number is actually their authority ranking for where you get ranked in their search results! Read more here: Angie’s List Advertising : Part 2 – An Insider’s Perspective

Overall, Angie’s List works pretty well for well-established businesses that are in specific industries. It’s just a shame that they have such a terrible business model surrounding their high-quality members and even worse reporting ability to track how the campaign is performing.

Read Part Two of this post, where we talk to a former salesperson at Angie’s List!