Local Search – Friend or Foe of Local Businesses?

Posted on 27. Jul, 2011 by in Thoughts

The importance of local search results increasing everyday; according to Google, 20% of all searches now have a local intent which represents a huge opportunity for all companies with a physical address whether a small independent shop or a multinational chain. We have been offering local strategies to our clients for many years now and extensive research on local ranking factors has been delivered by excellent specialists in the sector such as David Mihm and Mike Blumenthal. However, Google Places and local search in general are still a mystery to many local business owners.

A bit of history

In 2004 Google decided to do develop a local search product. Let’s start with the good part first, Google Maps. It makes the life of many people so much easier and there’s hardly a day that I don’t use it. The bad part is that one year later Google launched its Local Business Centre (LBC), which has allowed business owners to upload information about their business location. LBC provides a lot of opportunities for local business owners, but unfortunately also proved to be vulnerable to spam and other algorithmic problems.

Locksmith Spam on Google Maps

Locksmith Spam on Google Maps (2009), Source: www.blumenthals.com

In the beginning local business results were mainly visible in Google Maps and not in normal search results. Then Google introduced Universal results to provide a richer search experience and over time local results became more prominent within these.

In the last 5 years we’ve seen oneboxes, 3 packs, 7 packs, 10 packs and probably a few more formats that I can’t remember anymore. The first local listings that appeared in the organic search results page were nearly invisible and appeared at the bottom or in the centre of the results page but step by step they extended their visibility and climbed up until they reached the very top for queries with local intent. Then in 2010 Google came up with a different way of showing local listings. The so called hybrid listings merge organic and local search results into one. Although other formats such as the 7 pack continue appearing, the display of the hybrid listings increases and is now one of the most common ways of displaying local results in Google.

Hybrid local listings on google.co.uk

Hybrid local listings on google.co.uk (2011)

Although there always have been some problems, mainly with the ranking algorithm and spam,  local listings now appear on top of nearly all local searches and drive a huge amount of traffic to the businesses who appear within the first results.

Google’s intentions with Local Search

Apart from its latest social projects such as Google+, local seems to be one of the top priorities for Mountain View – considering the amount of changes that have been made and the importance it has gained during the last few years within the search space. Another indicator which confirms this assumption is the nomination of Marissa Mayer to VP of Location and Local Services in October 2010. It is clear: Google wants the local business’ money but they haven’t found the ideal solution yet.

They started their experiments with a trial of Local Listing Ads in 2009 but kept the program alive only for a few months until it was suspended. Something similar happened to Google Tags – a simple to manage local ad program which highlighted the promoted business within the local results – for a flat fee of $25 a month. It survived a few months until it was discontinued in 2011.

Now there is the option of Google Boost Ads which is the fusion of Local Listing Ads with Tags (currently only available in the US). It is a very simple way to advertise your local business without keyword and creative management, but not an ideal solution for professional online marketers, because of its unpredictability, high click prices and its lack of control.

Google Boost Ad (2011)

Google Boost Ad (2011), Source: searchengineland.com

So what will be the next, more serious steps?

Hotel Price Ads

As with most things Google starts with innovations in the travel sector. So far Google has only been earning money with AdWords. The introduction of Hotel Price Ads in April 2011 has changed the game. It transforms the local results for hotel searches into a PPC model because the advertisers pay for each click on their listing. The information comes directly from the provider’s hotel price feed.

Google Hotel Price Ads (2011)

Google Hotel Price Ads (2011), source: google.co.uk

For the users, Google Hotel Price Ads are definitely a comfortable feature because they get an instant price comparison within Google and can book cheaper, easier and quicker than ever before.

On the other hand, Google surely have received a lot of complaints from the hotel owners because these weren’t included from the beginning, but only a few selected online travel agencies (OTA). Now Google is working on the integration of the prices from the hotel owners which often offer the best price for their hotels.

There are a few more opportunities where something similar could happen…

Google Flight Schedule Search

Let’s think in Google’s search for flight schedules. In contrast to Hotel Price Ads, where the powerful OTAs are currently dominating, the direct providers, i.e. the airlines, are benefiting by appearing in the flight results and the OTAs are excluded. Until now, there’s no cost for the airlines but this might change in the future.

Flight Schedule Search (2011)

Flight Schedule Search (2011), Source: google.co.uk

Google Shopping

Another possible scenario of earning money for local searches is Google Shopping; the product and price comparison site just one click away from the search results page. It offers a very interesting feature to local retailers called “nearby stores”. It allows them to appear alongside the big online retailers, providing a really good chance of selling whenever their prices are competitive. The stock information actually comes from a daily updated feed provided by the business owner. So far there’s no charge for this service.

Google Shopping with "nearby stores" feature (2011)

Google Shopping with "nearby stores" feature (2011)

So what, friend or foe?

SMBs can definitely benefit from local search, because a high online visibility can boost their business. The situation for big companies is a different though. While they appeared in top positions for local searches before, because of its overall authority, this visibility is now not guaranteed anymore.

What do you think; friend or foe?

BTW: Local search for mobile phones deserves its own post. So stay tuned.

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  • jimmy

    The UK shopping search result on goggle is useless. It was better before!

  • http://www.seochester.co.uk/ The SEO Expert

    Google could do with wiping all current local business listings and starting afresh, it’s a great concept and drives masses of traffic to SMBs – but ultimately it’s now flawed by all the spam listings… Drop the lot and start again with a strict set-up plan.

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