Google Local Service Ads: Ready for Primetime
In this regular Street Fight feature, local marketing gurus David Mihm and Mike Blumenthal kick around some of the biggest ideas affecting the local search ecosystem and the broader industry. Send us an email or leave a comment if you have specific topics that you’d like them to touch on in future columns!
David: Hey Mike, not sure how you feel, but my adjustment to Standard Time has been rough. In fact, I wholeheartedly endorse Nate Silver’s idea for “Daylight Wasting Time,” which would not only not turn clocks back in the fall, but actually turn them forward another hour.
Mike: Well isn’t that the time zone in Spain? Having just experienced both the fall “back” time change AND a 4 am trip to the West Coast, I have no clue what I am feeling other than tired. But regardless the work must go on.
I thought we could talk about Google’s rebranding rollout of Local service ads?
David: Definitely. That was huge news last week. While the expansion into additional U.S. markets was noteworthy, the change from “Home Services” to “Local Services” portends a much broader category rollout imminently, from where I sit.
Mike: It does seem like a big deal… It took them a long time to get the details of this down. The first rollout was over 2 years ago and they struggled with the various forms of Advanced Verification and what level of verification as well as who should do it.
While I do think this is about a new revenue stream in new categories and cleaning up spammy industries the rebranding might just also be an effort (unusual for Google) brand clarity around their Google Home product.
David: Wow, the brand crossover with Home hadn’t even occurred to me. Great point.
Regardless of what it’s called, the product kills an entire flock of birds with one stone for Google, that’s for sure. Budget works relatively well as a spam filter in categories with high enough vendor density.
On the revenue side, I’m not sure traditional media companies (or even advertisers) realize just what a big deal this product is. If they rate TV advertising as #1 in effectiveness today, just wait ’til they experience LSAs.
Mike: I don’t think that Borrell Survey looks at the same audience, although I suppose that someone like Sears Home Services might be interested in TV. But as you note will likely shift their acquisition to this product.
David: Have you seen any examples of enterprise companies (like Sears) included in the list of vetted service vendors?
Mike: Currently the product is designed with no significant scaling to be able to cope with large enterprise or agencies. It is strictly a one business product. I suppose that’s because Google really does want to eliminate the spammers and initially identify real local businesses. They could very well roll it out to bulk or the API at some point but that’s not anything near term and I have heard no chatter about it. I wonder what percentage of home services more broadly are currently provisioned by national players?
David: Depends on the industry, but in certain categories I’d think that the national or franchise players would take a pretty good chunk of business. Think Roto-Rooter, 1-800-GOT-JUNK, or Autoglass for example.
And on the front of “identifying real businesses,” a publicly-traded company with a $10MM+ Adwords budget is extremely unlikely to be a spammer. (I suppose unless it’s JC Penney.)
Mike: I agree. But not only did they manage to minimize spam with this effort but clearly are also competing head to head (but with premier search placement) with Amazon Home Services, Houzz, Thumbtack and the like.
David: And the form factor of the results are absolutely *perfect* for Voice. As a consumer, all you really need is the reviews, the knowledge that Google has vetted them, and that they can get someone to your house when you need ‘em. The entire transaction can easily be facilitated (and tracked) via a voice command.
Mike: All with the very powerful “Google guarantee” that assures the consumer that very little is at risk. It’s quite brilliant. Although I would imagine a client invoking the $2000 Google guarantee might be a real ranking ding for any given business!
It is interesting to me that it is a fixed-price product with each market and service having potentially different cost per quote. Generally speaking they are in the $25 per quote range. I presume that was part of the small business focus that simplifies the product into an easily understandable format where the local business can just say “I want to spend $250 this month and that will get me X quotes.”
David: I’m sure that’ll eventually turn into a more demand-driven model, though, where $25 today becomes $35 next month and $45 next year. Google ran into this limited-inventory problem before with some of their early trials in sponsored 10- and 7-pack listings, didn’t they? The ads became so popular relative to cost that there just weren’t enough slots?
Mike: For sure it does run that risk and any small business needs to understand that this may very well be a “deal with the devil.”
Google is also, via their app, allowing a business to easily turn it off temporarily if they are not available to give a quote quickly so that a business can move in and out of the ad unit with relative ease. like all things Google it has a Googley ranking algorithm that focuses on quality and timeliness.
David: The on-and-off switch would be particularly useful for solopreneurs in seasonal-demand businesses, I suspect.
Mike: For me though, the business should be conscientious about getting email addresses, mobile phone numbers etc from these folks so that they could both stay in touch with these customers long haul and if appropriate do their own demand generation. A business NEVER wants to be too dependent on either Google or Facebook and have to rent their own customers back.
David: Right, which is where consistent messaging and loyalty products come into play. Acquire the customer using Google or Facebook but bring them back with SMS, email, and even direct mail. Companies like Customer Lobby are trying to automate the loyalty side of many of these home services categories, with some significant success. Obviously Facebook is paying particular attention to the loyalty angle but it feels like this kind of thing is a ways down their priority list, at least at the moment.
Mike: And certainly Google could go there as well, no? It was part of their Business Builder plan that was shared years ago and has surfaced in Plus via Circles (although not successfully). Don’t forget that they are trying out Knowledge Panel messaging as we speak, too.
David: Clearly Google feels this product is ready for primetime and it’ll receive corresponding engineering and marketing resources–with service offerings for advertisers expanding accordingly. As you said, though, even the current product fits the exact structure a small business is looking for: X leads for Y dollars.
If I’m an agency or media company with a substantial portion of customers in these categories, I’m spending my holiday season figuring out how I can add value on top of these LSAs, and how I can diversify my offerings away from SEO in these categories: the fully-monetized local SERP is here.
After more than a decade in local search, David Mihm now runs Tidings, an email newsletter platform for small businesses that leverages their everyday social media activity, and his own weekly newsletter, Minutive. In 2012, he sold his former company GetListed.org to Moz, helping over 3 million businesses get better visibility in Google and other search engines. Along with Mike, he’s a co-founder of Local University.