Sponsored search ads may be diverting would-be customers away from local businesses

CTV’s Jeff Pickel finds out why a quick Google search could mislead customers.

When trouble strikes, many people turn to search engines to find help, but not all results are created equal.

Recently, families in Waterloo Region have raised concerns with an appliance repair company. While speaking to CTV News, the clients all said they were trying to reach a local business, Waterloo Appliance Service Ltd., but instead, sponsored advertisements led them to different, but similarly named, company. They accused that other company, The Appliance Repair Team, of overcharging them and misleading them about the quality of the repair work performed.

Krinal Metha, with Newfold Digital, makes a living in the field of search engine optimization, which is more commonly referred to simply as ‘SEO.’ In the online world, SEO is crucial to ensure customers can find a business using search engines, such as Google or Firefox.

“The number one strategy for local businesses is to try and shop for the name of the city and the service, which in their case is ‘Waterloo appliance repair’ or ‘appliance repair services in Waterloo,’” Metha explained.

However, when a business buys a sponsored ad, Metha said it’s like renting an online billboard – whoever pays the most money gets the most attention.

Although it can create an uneven playing field, it is also incredibly lucrative for the search engines that sell sponsored ads. According to Google, last year online ad sales generated approximately $264 billion; roughly 77 per cent of Google’s total revenue.

“Because the whole economics of Google works on their ad engine, they want to make the most out of these ads. They are allowing people to bid on this keyword,” Metha said.

For companies like Waterloo Appliance Service Ltd., competing with their competitors who have already bought sponsored ads could mean either paying up to outbid them, or changing their name.

But for small, family-run companies, that isn’t always an option.

“My grandparents started [the company] in 1979,” Madison Vale from Waterloo Appliance Services Ltd. explained. “My dad and my uncle are currently in the process of taking it over.”

After years of building a reputation, and the long history behind their business, spending thousands of dollars per month on ads doesn’t feel feasible.

“I take a lot of pride in what we have done here,” Vale said. “It would be sad to see that the name that [my grandparents] created 46 years ago would unfortunately have to change due to circumstances we can’t change.”

In the meantime, Waterloo Appliance Services Ltd. continues to field calls from frustrated people.

“We’ve received calls from people who are very upset. They think that it’s us,” Vale said. “The people in the office are unfortunately getting the brunt of it. But once we explain what’s happened, they seem to be upset with themselves, and it’s upsetting because it’s not their fault.”

Changing their name isn’t completely out of the question, but it’s not something the company wants to do.

Metha suggests anyone trying to get in touch with real a local company use Google Maps to search for businesses in their area.