WW: What does AZ Regiohelden do, Mr. Fröhlich?
Markus Fröhlich: We offer SMEs in our catchment area forms of advertising that suit them. Because the banner that fits Renault's advertising campaign is not suitable for the hairdresser from Baden who wants to do new customers' hair. The central issue is findability on the Internet. An important form of advertising for SMEs is, of course, Google AdWords. Every SME could set this up for itself, but hairdressers, roofers and bakers are busy all day cutting hair, roofing and baking - and usually have no time and little competence to optimize their website, if they have one at all. There are more SMEs without a website than those with one. And SMEs are not about branding, but about return on investment. That's why we build so-called marketing websites for our clients: These websites, specially designed for AdWords, are mobile-optimized and contain all the information needed to make our client findable on the Internet - no less but also no more. In addition, we help our customers with their Google advertising, ensure the right regional targeting, book the right keywords, and provide the reporting: we deposit the marketing websites with measurement numbers with a local area code. Our customers then hear in the upstream jingle on the basis of which campaign they receive the current call. In addition, our customer receives a detailed monthly list of which ad generated how many clicks - this is where money comes into play, because we pay for every click - and how many calls were generated. In the evaluation, our customer also sees which phone numbers have called and thus sees which contact became a customer. In this way, expenses and revenues are juxtaposed. Rarely do marketing measures show so clearly what is worthwhile and what is not.
And what does it all cost?
Happy: We focus on the target group SME, so we offer professional service for small and medium budgets. SMEs want to use a reasonable budget and quickly see how the measures work. Our services are tailored to these needs. We can estimate what budget we need to meet our client's expectations - even if we cannot guarantee that what is expected will happen. Nevertheless, the probabilities are high.
How do you succeed in identifying additional profit opportunities in small market segments that are already well occupied regionally?
Happy: We define the framework conditions precisely for each customer. It is especially important for us to set realistic expectations, because many of our customers have no sense of what they can expect when they invest a certain amount of money. Then we build the contact-optimized marketing website. People who need to have their cell phones repaired aren't looking for a company history; they simply want to see prices and services and know where the stores are. It is different with dentists: there it is also relevant to know where the doctor studied, how long he has been running his practice and what he looks like. We choose exactly which information a potential customer needs and which not. Regiohelden Germany now serves over 1,000 customers and knows what works particularly well for which target group and industry. This is how successes are quickly achieved.
So you look at each of your customers individually and make them a tailor-made offer?
Happy: Exactly. For example, when a dentist comes to us, he usually offers a lot of services. Then the first thing we ask is where he still has capacity, where his focus is, what his current customer base looks like, and which customers he would like. Then we look at what search volume exists where, how high the click prices are, and calculate on the basis of contact rates and click rates what is realistically feasible for which service. Then we can say: For X amount, we can expect an average of ten to fifteen calls. Then the customer has to tell us whether - if ten more customers come for bleaching - the additional revenue is in proportion to the effort and expense. A very simple return-on-investment calculation. Our customers often have very illusory expectations. But our model only works if we work with our customers on a long-term basis. That's why we clarify at the beginning what expectations are realistic for an average campaign performance and what we intend to achieve. We have short contract terms and demonstrate measurable results. So our client can quickly see which measure brings something and which nothing. Good conditions for both sides to be happy and want to work together in the long term. We don't generate clicks or calls, we generate more sales. We also demand feedback from our customer, we need to know what the feedback looks like. Only then can we further optimize the campaign and ultimately satisfy our customer.
Does your offer also include some kind of competitor monitoring? To stay with the dentist example: When you assess how a dentist's range of services is received and how demand could be optimized, do you also assess how useful it is to additionally offer bleaching - like the dentist next door?
Happy: Of course, that's part of the business. Because if our customer wants to offer a certain service in a certain region, we naturally also need to know what a searcher will find elsewhere: what services, what locations, what pricing. If one of our customers has competitors who offer the same service at a much lower price, we can get them to the top of Google, generate calls, and our job would theoretically be done. But then our customer will eventually quit, because he gets calls but doesn't do any business. That's why we look at pricing and target group very carefully. That's also how we build the campaigns: If a customer says he wants to be defined by quality, we exclude search terms like "cheapest" or "cheapest" from the outset. A fundamental thinking error with AdWords is: it's not about being shown as often as possible, it's about showing up when there's a very high probability that the searcher will actually become a customer. The more targeted, the less wasted, the better. If one of the search criteria of a searcher does not apply to our customer, it is better not to be displayed. Because otherwise the searcher might click, discard the offer, but our customer still pays - because every click costs.
What strategy are you pursuing with the investment in AZ Regiohelden, Mr. Neumann?
Peter Neumann: We primarily address the regional and local digital market. We are focused on the area between Basel, Bern and Zurich. In this area, we are very well represented with newspapers, advertisers, radio, and regional TV - but so far, we have no regional digital business to begin with, even though we believe this is very lucrative. The big national advertisers need AZ Medien, especially in northwestern Switzerland, to meet their communications needs, just like our existing customers, the SMEs in our area, the mid-sized to the very small. They've known us for a long time, do print and to some extent radio and TV advertising with us, but until now we haven't made them a decent digital offer. AZ Regiohelden is now filling this gap.
Regiohelden is already successful in Germany.
Neumann: That's right, Regiohelden has already been operating for five years. We were looking for a partner who already has experience in this specialized business so that we don't have to start from scratch. There is no one in Switzerland who is really good at this already, so we went looking in Germany. Regiohelden already has a total of five offices and over 120 employees. Markus Fröhlich has already set up the Munich office and is now building up the Zurich office as well.
"New customers through local Internet advertising" is your battle cry, regional is your focus. Regional means Aargau?
Neumann: No. At the moment, we're focusing on the Aargau and Zurich areas, because customers there know us well, as a media house and as their partner for advertising in our media. But our catchment area is the whole of German-speaking Switzerland, which is why we are also opening the first AZ Regiohelden office in Zurich and not here in Aarau, although we would have space for it here. But Basel, which has many SMEs, could also be an interesting location. Perhaps there will also be a sales office there in the future. But for now, we'll see how business takes off.
Your website says: "The dentist people talk about in Berlin Kreuzberg. The lawyer who advises on labor law in Stuttgart East. The craftsman whose customers trust him in Munich Pasing ..." That doesn't sound like German-speaking Switzerland ... - does that fit the strategy?
Neumann: Our salespeople are all Swiss and the colleagues our customers have contact with when it comes to adjusting campaigns are also Swiss. That has to be the case because the successful keywords can be quite different between Germany, Austria and German-speaking Switzerland. That's where you have to be in the wording.
Happy: Of course, it's not ideal to operate with German examples - but it's the truth: We acquired our know-how in Germany. We don't want to conquer the Swiss market with fake examples, but would rather come up with the first Swiss success stories in a year's time. The reason for this joint venture with AZ Medien is that the know-how does not yet exist in this form in Switzerland. And that's what we tell our customers.
Regiohelden sounds pretty much like a start-up, handmade. Does that fit in with your plan to become the central player for digital advertising in German-speaking Switzerland?
Happy: That's right, that's how it was five years ago. Our founder Feliks Eyser was very Internet-savvy and set up an Adwords campaign for a friend. That turned into two and three and four customers - and Eyser thought: There must be something to it, I'm building a company. It's a classic start-up: we started with three people in a living room, and today we have five offices with 120 employees and over 1,000 customers. What has remained the same is our mission to offer high-quality online marketing at a reasonable price for the SME target group.
Neumann: We thought a lot about the name. On the one hand, it's already established and works, on the other hand: Is it the right name for Switzerland? We definitely wanted a German name, not an Anglicism like Winlocal, Reachlocal, Telegate or whatever. Because local business simply runs in German. "Regiohelden" is easy to remember and it also connects well with AZ - we wanted this combination to make it clear that AZ Medien is behind it. I firmly believe that AZ Regiohelden can become a brand that is convincing in the B2B sector.
What budget do I need to have in order to place an order with AZ Regiohelden?
Happy: The minimum budget per month is 500 Swiss francs, the budget is of course basically open upwards, whereby this upper limit is set by the market. Because with AdWords, after all, you pay for every click and the click price varies greatly; it depends on how much the competitor and I are willing to pay, what the quality factor of the campaign itself is and how the campaign should be designed. The higher the individual click price, the higher the budget must be. We can only meet our customer's expectations and also achieve certain average values if we get at least 200 to 300 clicks per month.
Neumann: For us, all this only makes sense if our customers can also achieve success. There are now some companies that collect money, book a keyword, but ultimately achieve nothing for their customers. But "take the money and run" is not what we want. After all, we are addressing our core customers with this offer and would still like to do business with them in twenty years' time. We can't afford to alienate them. That's why Regiohelden convinced us. They have as much expertise on the executive side as in the sales department - what goes on there in the "engine room" is very clever and very intensively monitored: what goes well, in which sectors, why, what is clicked on, how should a website look? The customer's success depends on such a good offer, not on a good sales force, even though it is of course impossible without it.
What kind of profit increase can the dentist or the small advertising agency expect?
Happy: I'm reluctant to give you striking figures, because it's very individual. It depends on what the individual click costs, depending on the industry, how many people click and how many call. And if ten people call looking for exactly what my client offers, how many of them will become buyers on average? For example, if a dentist has his practice right at a tram stop, more patients are likely to come to him than if his practice is difficult to reach. Business success depends on a number of factors. That's why we can't give average values for all our customers. That would not make sense. Nor can we give any guarantees of success. We work with empirical values, which profit increases in a range from-to are realistic in an industry with a certain budget. We have comprehensive knowledge of the industry, but we have to get to know the individual company in detail first.
How is AZ Regiohelden positioned in the AZ Medien portfolio?
Neumann: We focus on reach, we focus on advertising revenues, and we focus on SMEs. In this respect, AZ Medien and AZ Regiohelden have the same focus, the same strategy, and are a perfect match. However, with AZ Regiohelden, we are not simply grazing existing AZ Medien customers, but are specifically looking at which potential customers our offer best suits and addressing them. In the organizational chart, AZ Regiohelden is located in the Digital division and combines all areas of our company, print, TV and online.
Interview: Anne-Friederike Heinrich
In a nutshell
Peter Neumann, 47
- Studies of Information Science, Political Science and Marketing, University of the Saarland in Saarbrücken
- from 2002 various positions in the digital business of the Holtzbrinck Group
- 2012-2014 Managing Director of Styria Digital Holding GmbH in Austria
- Since June 2014 Chief Digital Officer AZ Medien and Member of the Executive Board
Markus Fröhlich, 32
- Law studies, MBA General Management
- 2011-2013 Senior Sales Manager Google, Daily Deal
- 2013/14 Munich site manager Regiohelden
- since November 2014 Head of Sales AZ Medien, AZ Regiohelden
