The market for helping companies market themselves locally is big business. ReachLocal, which went public two years ago, is generating $100 million a quarter by helping companies maintain a local presence.
One company doing something similar is privately-held Balihoo, which announced Thursday that it's raised $5 million from existing investors, OpenView Venture Partner and Highway 12 Ventures. The new funding brings Balihoo's total funding to $17 million, since inception in 2004.
Unlike ReachLocal, which focuses on small- to medium-sized businesses, Balihoo helps national brands market at a local level. This takes the form of helping national brands with their local websites, getting them up and running on Yahoo Local, Bing, as well as directories, like Yelp, said Pete Gombert, CEO of Balihoo, in an interview with me. Additionally, Balihoo helps its brands with SEM (search engine marketing) and display-advertising campaigns.
Among the big brands that work with Balihoo include Geico, Snap Fitness, and Masco. These customers pay anywhere between $10 to $100 per location per month, said Gombert. The median payment is about $30. These monthly subscription fees add up for companies with big footprints. For instance, Snap Fitness has 1200 locations, meaning it could be paying up to $36,000 per month to Balihoo just to manage campaigns for each location. Ballihoo currently works with 35 national brands, said Gombert.
Balihoo has an interesting story. It started in 2004 as a very different company. The Boise, ID-based company initially focused on being an advertising network working with media agencies, such as Omnicom, on one hand and publishers, on the other. But when the recession hit in 2008, Balihoo realized that going after publisher dollars probably wasn't the right strategy during downturns.
So, they "pivoted" or restarted their firm to focus on their current strategy. The initial strategy worked, "until the economy tanked," Gombert explained.