Thoughts & Effects of Google Local Listing Ads on PPC
Author: Nathan Pabich
October 9, 2009 • Filed Under: Google News, Local Search, PPC • 3 CommentsThere’s been a lot of chatter about Google’s latest augmentation of their local map results. Earlier this year, there were many additions of map results to local search queries (explicit or implied). Then Google announced new Local Listing Ads that would show above the natural map results – currently a regional trail only in San Francisco and San Diego. Most recently, we’ve seen a change to local map results in every region – a reduction in the number of local results from 10 to 7. In this reduction Google also made an addition – they took away 3 “natural” maps listings while adding 4 paid listings above.
There are a few interesting things happening here:
When you see certain pages in the Google SERPs, most of what is above the fold is now ads. (click on the images to enlarge)
The second interesting thing is that being logged into a Google account, such as Gmail or AdWords, the results will actually change. The new 7-pack of local search results comes up when you perform a local search on Google; however, sometimes the familiar 10-pack will display in addition to these new Local Listing Ads if you are logged in to one of your Google accounts. At least for now, there can be as many as 14 total local map results shown on one “natural” search page in Google as can be seen below.
It has been asserted that these new Local Listing Ads do not compete with traditional PPC ads. I only partially agree. First, all relevant results compete with each other. The main reason I don’t agree is that the new Local Listing Ads (at least in this phase of testing) can displace PPC ads in the premium ad spots – pushing all PPC ads to the right of the results page. This could make the PPC landscape more competitive in already competitive verticals. Here’s an example:
While these ads are not directly increasing CPCs in AdWords, they will have the ability to drive up competition. It’s no secret that the top results typically bring in the most clicks, but with less ad real estate to buy, PPC would necessarily become more competitive in the local space.
Finally – since there are only 4 listings for Local Listing Ads, what happens when many local businesses are paying for these flat rate results? If competition for a spot increases, does the fee for showing (less often, mind you) decrease, or will there just be diminishing returns? Only time will tell how Google will decide how to unroll this new ad medium, but it’s likely you’ll be seeing Local Listing Ads in your area soon.
I like your point about diminishing returns…is the price to advertise going to be the same whether there are 100 companies advertising or whether there are 10? Also, who’s going to police whether the ads are appropriate or not. For example, if I’m not really located in San Francisco but I would like my ads to show there to get more potential traffic to my site, is Google going to let me advertise there? Seems like that would take away from a lot of people that are actually located in San Francisco and paying to be listed.
Comment by George Zlatin — October 9, 2009 @ 1:25 pm
Another thought I just had – for generic queries like “dentist”, you get a local results map page further down in the results page. Will these ads show along with implied local intent keyword like “dentist” – and will these map results still remain lower on the page as they do here in Chicago?
Comment by Nathan Pabich — October 9, 2009 @ 1:30 pm
I wonder how long it will take (and how many millions of dollars businesses will spend) before the average person gets tired of being saturated with paid results. I think the idea of a one price local ad is a good one and no doubt some businesses will do well using it, especailly as long as most people don’t know the difference between paid and organic results.
Kind of reminds me of the early days in banner ads – Online folks thought this was the best thing slice sliced bread and now we can see how people respond to them
Transparency is the emotional currency of the internet, and people don’t like to be hijacked, As long as Google dominates search, they can do whatever they want. However, It might be a good idea for them to remember that people also have the same choice
The idea of displacing organic results to the point of obscurity is self defeating for Google at best. It seems to me that this type of chronic over-advertising will be the beginning of the end of what has made Google successful – and that is returning the most relevant results for both searchers and advertisers.
Comment by Jan Riley — October 11, 2009 @ 12:59 pm