Local Listing Ads will present local businesses with a text ad for a flat fee. Jury's out on whether it will compete with AdWords.
Google has begun testing a simplified text ad unit for local businesses. The ads will appear in new areas of Google's search results pages, prompting some advertisers to express concerns over competition for clicks with their AdWords ads.
The new Local Listing Ads appear at the top of a search results page when users conduct a geographic search for a category related to an advertiser's business.
Unlike AdWords ads, the ads will not include a headline or creative. They will simply show the company name, contact details, and a link. Also unlike AdWords, the Local Listing Ads will not be sold based on pay-per-click bidding via auction. The ads will instead be sold for a flat monthly fee, based on the company's location and business category.
Google spokesperson Deanna Yick declined to say how much the ads will cost, since Google will be testing prices for each location and category to find the best balance between cost and return for the advertiser.
Google is making a point to assure advertisers that these ads are not competing with AdWords ads, but some local search specialists are not so sure.
"From what I've seen in screenshots, these ads are definitely going to be competitive to the ads above them," Will Scott, president of search marketing firm Search Influence, told ClickZ News. "I would expect there will be a land rush for companies to get them."
Local Listing Ads are currently available only in San Francisco and San Diego, CA, but are expected to expand to more cities across the U.S. after the initial testing period.
Google is targeting the ad offering toward smaller businesses with a physical storefront. The buying and management processes are simple by design, to create a "low-effort way to reach local customers," Yick told ClickZ News.
"Anything that makes creating an ad campaign simpler is a good thing for smaller advertisers," Andrew Shotland, local search optimization consultant, told ClickZ News. "As more users get involved with local and mobile search, both small and large businesses should be focusing more on local search advertising."
The ads will appear in Google Search and Google Maps, but not on mobile searches during the test. On a search results page, up to four Local Listing Ads will appear above the "Local 10-pack," and below the top group of AdWords ads. The ads can also appear on the right-hand side of search results, below the AdWords ads. On Google Maps, only one ad will appear in the left-hand column, at the bottom of the map search results.
At present, when there are more advertisers than ad slots, Google will determine which ad to show by rotating the ads in its inventory. That may change in the future, as the program grows and Google refines its algorithms, Yick said.
Advertises can point their Local Listings Ad to their own Web site, or to a Google Place Page, the new type of local listings page that Google launched last month.
During the initial rollout, advertisers will get their Local Listing Ad free for the first month, as long as they have verified their business listing in Google's Local Business Center. Google will also offer advertisers a free call-tracking feature and monthly reports.
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Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.
Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.
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