As Geo-targeting Grows Facebook & Groupon, Search Giant Adds Growing Sales Force
Google's latest foray into local online advertising is starting to look serious.
As more and more local business owners turn to Google search and Google Places pages to attract nearby customers, the search giant is upping it local online advertising efforts.
Recently Google has unleashed a flurry of new local services and ad formats and expanded others. Especially noticeable changes include tweaking its search engine to make local businesses and listings much more prominent in response to local-oriented querries and moving a high profile VP into developing new geographic and local services.
Google's overriding goal in local advertising is to anticipate what people might want -- a nearby restaurant, theater, or mechanic depending on their location, search history and other data -- before they actually know it.
Helping a user find something useful to them without their specifically asking for it in a search query could pay off on the ad side. The online side of Google’s $91 billion local business, whose sales channels include everything from Yellow Pages and newspaper ads to Google search ads and online directories such as CitySearch, will grow 18% this year, to $15.9 billion. That's more than online advertising overall, forecast for 14% growth.
The reason is simple: For all the fancy behavioral science Google uses to understand online habits... one thing works best to attract potential customers: where they are. Advertisers often know the answer to that today, thanks to developments like net-connected mobile phones with Global Positioning System capabilities and social networks such as Facebook and Foursquare where people reveal their locations.
Google's interest in local advertising is partly in response to new marketing methods and channels like Facebook, Groupon, and Yelp... all offering merchants and service providers simpler and sometimes cheaper alternatives to Google's search ads. Search-ad spending by small- and medium-sized businesses is expected to fall by 10% by 2015 as a result. Facebook, in particular, just became the most-popular marketing channel for local businesses, with 70% using it vs. 66% that use Google's search ads.
Google's AdWords search-ad system, which requires businesses to choose and bid on ad-triggering keywords, is often seen as too complex and time-consuming for most local businesses,
Two ad formats rolled out last year are intended to change that perception. The first was Tags, which for $25 a month lets merchants buy a yellow pushpin on Google.com and on Google Maps highlighting their location. Another product, launched nationally in late January, is Boost. Advertisers fill out a short business description, list a web page or free Google Place page listing, and set a budget as low as $50 a month, and the system creates an ongoing, automated search campaign.
To sell these ad products, Google has taken a marked departure from its self-serve ad systems by hiring several hundred sales people in Silicon Valley and elsewhere to promote Boost and Tags. It's uncertain how many more feet on the street Google will hire; reseller partners such as Yellow Pages publishers ultimately may handle most of those sales.
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