Optimizing Local Search – Is Pay-to-Play the Way Forward?
Big business has for a long time had to compete on the playing field of PPC and AdWords, but with the recent re-brand of Google’s ‘Home Service Ads’ to ‘Local Services by Google’, and its expansion into more cities in the US, it’s clear that Google is pursuing a ‘pay-to-play’ model in local search.
This, of course, brings with it plenty of complications (but also opportunities!) for local businesses currently relying on good organic rankings and a great reputation to remain visible in local search.
With this in mind, we gathered some experts on local search to answer your questions and discuss the state of ‘pay-to-play’ in local search and where it might be headed in 2018.
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Which paid channel do you believe delivers the best ROI and/or scale for local businesses? (04:25)
Mike Ramsey, Nifty: This depends on the industry. In legal, we’ve found that AdWords has easily outperformed everything else, including Facebook, at scale for cost per lead. Facebook has been good in some areas, but it depends on the specific area of practice. There’s not as much nurturing of the lead that takes place with AdWords. You might have a low cost per click on Facebook but it takes longer to convert.
Will Scott, Search Influence: Display and, in particular, remarketed display, is having a huge impact on conversion. We might come into first contact with the prospect through Facebook or AdWords, but our ability to re-target through display is really driving an incredible cost per lead. Our primary display network is Google because it’s so easy to inter-operate with Google, though we have in the past tested all kinds of stuff. We’ve worked on different ad exchanges through platforms like Equivio, but at the end of the day, from a ‘management of the process’ perspective, it’s much easier to use the Google Display Network.
Mike: We have used Bing and Yahoo, but these aren’t the first places we’ll go. If there’s extra budget to expand there, we will, but it just makes sense to focus on Google first. We’ll stay with AdWords until it’s completely maximized. I’d say 98% of paid revenue from Nifty, on behalf of clients, is going between Google and Facebook.
Will: There are certain verticals that I think are supported pretty well by Bing, but it depends on the demographics of the client’s customers. I joke that the typical Bing searcher is someone who bought their laptop from a big box store and never figured out that they could change the search engine. They tend to be people over 50, and if you have sufficient inventory there, we’ve found that the cost per lead and cost per click can be significantly cheaper on Bing.
What are the best strategies for combining local SEO and ‘pay-to-play’ to maximize leads for local businesses? (10:31)
Will: You have a much better opportunity of capturing a lead if you’re present in ads, on the map and below the map – that way you get three bites of the apple before anybody else gets a chance. But if I can acquire the user the first time through local search, I can cookie them and follow them around the internet. Those first searches may be driven organically or by map, but as someone in a long decision cycle is deepening in their funnel exploration, being present through retargeting is ultimately a great way to get to conversion.
We’re big fans of multi-channel attribution in Google Analytics. We build a tool that tracks all of those touchpoints so that by the time the customer actually fills out a form for enquiry we’ve got three or four different touchpoints. For short decision cycles, for example in the case of emergency, I would tend to not use remarketing. Someone looking for an emergency tyre change isn’t going to be looking online for half an hour.
Mike: Immediate remarketing can work well in some places, for emergency situations. Let’s say someone needs a locksmith or has tooth pain, they might make a call but their appointment might not be for a few days, so they might wonder if they made a good choice. If you’re hitting them up with trust/testimonial type content after that on Facebook, you’re building loyalty before they even come into the store. You might not see many conversions from the Facebook ad but that person will have a higher probability of continuing through the process if you’re giving them reasons to trust you even before the customer experience.
That’s the area that I’ve found really interesting over the past year: what you can do with really good video remarketing. YouTube’s catching up; the localization of YouTube ads is okay but it’s not as good as Facebook.
Will: We have some clients with really good testimonial videos. If you’ve got somebody who’s earlier in the decision cycle and you can show them a video that reinforces the value proposition of your provider, that would do a lot to move them down the pike.
Mike: A good example of this is Disruptive Advertising (an agency that focuses on ads): if you accidentally click on one of their ads, you’ll be hit with a series of comical video follow-ups on Facebook every time you go on there.
Is it possible and beneficial to use Local Service Ads and AdWords at the same time to dominate above the fold? (18:10)
Tom Waddington, Wachae: Yes, you can advertise on both and it can definitely be beneficial to do so. Not only can you appear in both places for the same results, but not everyone calls or clicks on a Local Services Ad because it’s at the top – some skip over those and land on a AdWords result. Local Service Ads might not appear for a particular keyword, so AdWords can help fill in those gaps. It can be a little hard to know when they’re showing without manual testing, though.
It’s hard to generalize on whether AdWords or Local Services Ads bring the highest ROI because we’re seeing a lot of variation from one client to the other. I’ve not seen a consistent result across the board yet. There are definitely going to be businesses who will try Local Service Ads for whom it works well, and others for whom it doesn’t work at all. You have to analyse the data, look at what you can and make decisions based on what you’re seeing.
Big, national brands are starting to get into Local Service Ads. I think it’s something that’s going to happen more and more and I think it’s a little concerning. One, because of budget, and, two, because of their natural advantage in ranking factors. I’m hoping that we won’t see Local Service Ads dominated by larger companies squeezing everyone else out because they’re able to manage more leads and have a bigger budget.
What AdWords strategies can smaller businesses use to gain share of voice against larger companies with bigger budgets? (22:23)
Mike: The area you can win in is hyperlocalization. A lot of bigger brands won’t spend the time building out really solid, local landing pages on a ‘per keyword’ basis. Their ads will be a little too generalized, and the landing pages won’t be specifically focused on the local market to the keyword that was searched for. They won’t have as many click-throughs, they won’t have as much conversion data, and their quality scores will be worse.
So if you take a small business, and decide to be the absolute best in a set of three or so specific keywords, where you take the time to build and really test the ad and landing page (H1s focused on the keyword, good content, good call-to-actions), and you can drive the quality score into the 9-10 range, you’ll win and have a lower cost per click on those keywords.
If you go broad, with limited budget, and try to take on some of the bigger companies, most likely you’ll fail and be pushed further down the page to the point where it won’t matter. Do one thing and do it perfectly.
Will: It comes down to long-tail theory. If you can continue to expand your keyword set until you find a sufficient bucket of keywords where you’re the only one there, you’ll have considerably fewer clicks per search term but in aggregate it’ll pay off for you. This isn’t going to be done by a big brand who’s trying to work across hundreds of locations.
With regard to AdWords Express, we’ve had a few customers come to us with their own AdWords experiences, and we’ve had to educate them about the metrics that really matter. They find themselves getting fewer clicks because they didn’t have the level of conversion management tools that we do. The challenge is that you could run an AdWords Express account for $100 a month.
Mike: I’m of the mind that that $100-$500 ad spend for smaller businesses will start to go more and more to AdWords Express and won’t be beaten by agencies in the next few years. The more Google can work on the AI solutions they have with AdWords and the more small businesses become educated about AdWords, you’ll find they’ll dominate the market and agencies won’t be able to serve it as well as AdWords Express. That’s where we know Google is heading, but we don’t know how long it’ll take them to get there.
LOCAL SERVICE ADS
Which factors influence ranking within Local Service Ads? (30:51)
Tom: Location is a big one, as Google is trying to connect you with someone physically close to you. Review score and count is another. Also, responsiveness to requests; if you’re not responding to enquiries it can have a negative effect on your business hours. Budget comes into play, too. You need to start out with a higher budget than you would think and see how it goes from there.
I don’t think Google have had many calling them on the Google Guaranteed claims but if your business is having issues with complaints it’s certainly going to hurt your ranking at some point, if not knock you out of the program altogether. On the budget side, if you set a higher weekly budget, you’re saying you can take a lot more leads in. With a lower budget, Google’s probably going to adjust, spread it out a bit and show your ads less. You’ve got to give it a chance, get some leads coming in and see what you’ve got to work with before deciding to cut it off.
To optimize the ad itself, you select categories of the service you offer. Select the categories most beneficial to you – you don’t have to select every service and zip code just because you can provide those services and you can serve those areas. Same goes for the hours – don’t show 24 hours just because you can serve someone 24 hours; instead, set the hours to the hours you can be really responsive to leads and when you can actually help the customers.
To get ‘Google Guaranteed’ in Local Service Ads, a background check is involved for the company and the employees who are going into the homes of customers. The process can be a little cumbersome but Google wants to make sure they’re working with a company they can feel confident in. Something else you can to do optimize your service for Local Services Ads is listen to the calls that come in through Local Servics Ads as Google records them on your dashboard. If you’re taking the time to listen to those calls and finding out what the leads are like, you’ll probably find out there’s room for improvement on your end on how these calls are handled by your staff. In terms of maximizing your ROI on these calls, try to turn new customers into lifetime customers and avoid poor service or pushy sales tactics.
I feel like Local Service Ads are a little rough around the edges. They’re rushing to get it out there – there was one period where almost every day it felt like there was something new in the dashboard. They’re throwing it out there and fixing things on the go. The onboarding process and communication have had some issues but they’re getting better as they go. Sometimes support has been non-existent but it’s getting better.
What industries do Local Service Ads cover and what is Google’s true aim with these new ads? (39:53)
Tom: When they rolled this out, there wasn’t a lot of warning. There was initially a lot of confusion over where Local Service Ads were available and which industries they were for. The categories that they’re in right now are locksmiths, plumbers, electricians, HVAC, and garage door services. They’ve been pushing out to new markets; you might see a new one today or this week, but those are the core ones.
Will: It’s interesting that that list of categories maps pretty well to some of the biggest spammers in local, historically. You wonder if some of their impetus for adding in categories is an attempt to have better control over the overall user experience.
Tom: I don’t think they address spam very well in terms of local spam and Google My Business spam as it doesn’t impact that other than pushing it down lower on the page. There are some other categories they have running in California: autoglass repair, general contractors, house cleaners, towing and roadside assistance, handyman, contractors and painters. Those are some other ones that they haven’t pushed out into the new markets but they’re running in California.
Mike: Let’s be honest: Google is in business to make money. They hide behind giving good user experience as their reason for most things when ultimately that may or may not be the case. For instance, the ads and the process and the amount of clicks it takes isn’t necessarily a positive thing but it does fight spam in a way that helps users potentially trust it more but it actually has a higher cost associated with it.
They’ve found a way to make money and potentially have a little better user experience. I think we’re going to see this continue to take place in local, across more and more categories, and there can be many ways to justify it: it could be spam, it could be that people are clicking on it and liking the service. The fact of the matter is that from the time that I’ve gotten into this industry until now, paid ad click-through rates have gone from somewhere around 15 to 20%. A Google rep I was speaking alongside actually told me that all ads are getting over 50% of clicks. That’s on mobile and desktop. In fact, on mobile it’s higher. If you think that they’re just starting local ad opportunities, they’re pushing for that 100%, if they can keep users. Unless user experience drops off and people leave for Bing, we’re going to see more ads, regardless if it’s good or not.
Will: There was a case study that Wil Reynolds presented at SMX a couple of years ago, where they were able to obtain a number one organic ranking for one of their guys and apparently that was good for a total of 6% click through. Between the ads and features at the top of the page, it’s a lot harder through organic to be present at a level that gets you enough clicks to actually have a business.
Mike: It’s gotten harder in map packs, too. We’ve gone from ten to seven to three results, to ads above, to mobile driving down click-through rates. I think we’ve got to look at bigger trends and adjust accordingly. We can’t have our blinders on and say ‘hey, everything in the organic, free world is gonna be peachy-great!’.
They’re after that 100% paid and we just have to face that, take advantage of the time we have and hope they can’t get to 100% paid on the basis that Google users will not have as a good of an experience. If they do get to the point where they provide a better user experience through ad results than organic, well, then we’d all better be very, very good at paid advertising on Google.
Will: With regard to Google’s dominance and the split between search engines, Comscore and the data services says it’s 80/20 but actual analytics says it’s 95/5. The referral data doesn’t match up to what Comscore and the other analytics providers say.I think Google is absolutely dominant. When local search was new, there was no map. We were competing for long-term localized keywords, and then if you could be good enough you’d get an authoritative one-box that dominated the top of the page. I think that the days of the one-trick pony local SEOs are done. That skillset is part of an overall local marketing stack. In 2006 or 2009 we could be completely dominant just on long-term, localized stuff. Over the last two or three years we’ve had to become much more full-stack marketers.
How are marketing agencies using Google’s Local Service Ads and how do they price this service? (49:32)
Tom: I’ve seen that some agencies do a flat fee model and others offer to do it for free, partially because they’re trying to figure out how it works. Until you’re actually using it, it’s hard to get a good feel for it. Plus it’s a way they can get in with a business and possibly manage other services for them.The onboarding process for Local Service Ads is difficult. There’s a lot of room for error in the background checks so there’s a lot agencies can help with when it comes to that, as well as getting more involved with how it compares with AdWords, finding a good balance between the two platforms, and even deeper stuff like actually managing the leads, listening to calls, and reaching out to customers to get verified reviews.
What paid social strategies have you had success with in driving leads for local businesses? (52:07)
Will: We have historically worked with a lot of lifestyle local stuff, like cosmetic medicine and spa services, so there’s a lot more value in branding. Their target market is all on Facebook and Instagram. With promoted posts, you can get in front of anybody.We had this great experience: in New Orleans, at Mardi Gras time, there was a specific type of cake called a king cake (basically a breakfast Danish decorated in purple and gold for Mardi Gras). We recently had a new client who produces king cake and their goal was to sell off-season, like ‘fall’ king cake, with brown and green instead of purple and gold. We tested a single promoted post and sold them out by 8am in the morning. They opened early and there was a line out the door of people wanting these new king cakes, and that was from one promoted post on Facebook.
There’s almost a 1:1 relationship between adult internet users and Facebook users. Something like 78% of adults on the internet are on Facebook. If the messaging is right, and the content is timely and compelling, I think Facebook, whether display or promoted post, is tremendous for the market.
Which social platform delivers the best paid-ROI for local businesses? (54:57)
Mike: Definitely Facebook combined with Instagram. I hope to see improvements in Twitter’s and Snapchat’s offerings, and you could even add Pinterest and Reddit to that list. The scalability, usability and targetability on Facebook and Instagram are just amazing.
The thing that Facebook hasn’t done yet, that they need to, is geo-fenced targeting in a really good way, at scale. I know they’ve done some things with beacons and such but they should be at the point where they can give you ads at a 100-meter or 50-meter radius, compared to the mile radius that they have right now. Sometimes you can’t even use the mile radius, from what I’ve seen. I think that hurts local. If they improve that side, it’ll be absolutely phenomenal and nothing else would be able to beat it.
I think there’s a place for Twitter but it’s much more people-based and interest-based than local. YouTube has good local targeting but you just don’t have the reach.
Will: With Twitter, there’s just not the inventory, especially in the local market. Unless you’re targeting journalists or marketers, it’s not terribly interesting. You’re certainly not going to find my 15-year old there. The only place you’re going to find him is Snapchat.
Mike: My favourite example to go to when talking about businesses that aren’t ‘sexy’ is Manhattan Mini Storage. There’s nothing visually awesome about storage units, yet their ad campaigns are well known in Manhattan with probably every citizen in that market, because they put a personality behind it that has nothing to do with storage units. And I think that can work for any industry.
Our goal is to make ‘unattractive’ businesses attractive and you do that with personality. It’s hard but you can be creative with anything. The spoils go to those that do, and that’s what I focus on with social ads. We worked with an ISP in Southern Idaho, who decided to take some risks. They knew their market was predominantly conservative, and this was during the end of the Obama administration, so they put out ads saying ‘No 4-year contracts’ with a picture of Obama on them. It had nothing to do with the ISP, it just talked about the fact that they didn’t do contracts. And it killed it. Your business just needs to understand the market.
Manhattan Mini Storage, on the opposite side, used liberal politics to push storage units. It’s risky, but it works. Those are the kinds of things you can do socially that you can’t do as well in search.
Do bigger, ‘household’ brands have an intrinsic advantage over smaller businesses in paid social? (61:29)
Will: I think even a local dentist, if they plan well, can build a brand that resonates, if only with their immediate area. There’s a dentist a couple of blocks from me, who are all over the place, and that’s because they’re in the central business district and so they are able to be present with not a lot of budget.
One of the things that interests me, and I realise that this only slightly dovetails with social, is that we’ve seen a peak, a trough and now another peak in hyper-local blogs and news, to the extent that you can know which of those are in front of some groups of readers who give it a little bit of credibility. You can borrow that credibility in the same way that you used to with broadcast and traditional news. There’s always a challenge: how niche can you get? How hyper-local can you get? And from that space can you build a brand that resonates with social? Anybody can publish an article in their local newspaper, generally speaking, for a several hundred bucks. A minimal budget can get you published and give you that stamp of credibility. When you jump on that and republish on social, you get a lot more lift.
Do you see paid or organic channels driving the majority of leads to local businesses in the future? (65:50)
Tom: You need to focus on making your customers, however they found you, lifetime customers. One article I want to mention is a conversation between Mike Blumenthal and David Mihm about Local Service Ads on Streetfight recently. They had a really good discussion involving Local Service Ads and using those to turn customers into long-time customers and finding ways to retain customers.
Will: I actually think it’s merging. I think we’re still going to create a lot of content, but it’s going to be landing pages for paid. There’s always going to have to be dollars behind it, but we’ll still be executing the same craft. With regard to reputation management, and how that fits into all this, I think that reviews are still critical but they’re not the first search, they’re the next search. Once I’ve identified a provider, I need to find out if they’re good enough for me.
Tom: Star rating is a significant ranking factor in Local Service Ads. That’s another reason of concern, because, just on the spamming side, I think we look at Local Service Ads and think ‘this helps a lot with spam’, but again I don’t see how it fights spam apart from pushing it down. You can still manipulate reviews on Local Service Ads. The reviews are important, though, and it is going to be a factor. If you look at Local Service Ads on desktop, there’s very little to see apart from brand name and reviews.
Mike: The thing I would be prepared for is an industry-specific type of advertising. I see, for example, professional services being an untapped area that Google will move into with paid ads, sooner rather than later, and in a big way.
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Our Expert Panelists
Mike Ramsey is the President of Nifty. He is the author of Winning At Local Search and a partner at LocalU, which provides beginner to advanced conferences in the realm of local search marketing. Mike founded Nifty in 2009, and it’s since been recognized by Inc. as one of the fastest growing companies in America.
Will Scott runs New Orleans-based agency Search Influence with his wife and Co-Founder Angie. Search Influence is a national, full-service Digital Marketing agency with a focus on locally focused businesses. Founded in 2006, Search Influence employs more than 50 full-time staff and hundreds of freelancers, and has for seven years been on the Inc. 5000 list.
Tom is the Co-Owner of analytics platform Wachae. He has been involved in local search for over 10 years and has helped numerous home service-related businesses reach new customers online. Tom is also a Google My Business Top Contributor and has been closely monitoring the evolution of Google’s Local Services ads.
Host: Myles Anderson
Myles is Founder and CEO of BrightLocal. He has worked in the local search industry since 2009 and has been a major contributor to the Local Search Ranking Factors Study. Myles also writes a regular column for Search Engine Land and talks at SEO conferences such as BrightonSEO and Inboundcon (Toronto).