Google announces at SMX Advanced Local Workshop (an industry conference for search marketers) that their Local 3 Pack will soon include an advertisement.
What does it mean for your business that ads will now appear in local 3 pack results? The most important thing to know about the ad in the local 3 pack is that the ad will take one of the three spots available in the local 3 pack, making it a 2-pack (based on example in presentation) with one less spot for businesses to fight for. With a third of the 3 pack space going to the highest bidder, regardless of any of the SEO or reviews management local businesses use to get into the 3 pack, it makes the difficult job of getting into the found first in local search results much harder.
Clearly, this will be a huge ad revenue boost for Google. We can assume that user experience will suffer as organic results get pushed out and more clicks are required to get past numerous ad placements to get to top ranking relevant businesses. Additionally, businesses that have worked hard to earn a spot in the local 3 pack not only have less chance of making the 3 pack but will now be shown below an ad that could possibly be a low-quality result for the search; lowering trust in how Google ranked the two remaining spots.
What Is the New Local 3 Pack Going to Look Like?
Attendees of June’s SMX Advanced were given a screenshot of what the new 3 pack will look like, and Joy Hawkins tweeted a snapshot of that presentation:
Tweet Image of Google Presentation on Ad in the Local 3 Pack
Not the best photo. Luckily, Ross Marchant included a mockup of what the new local 3 pack might look like (based on the photo) when BrightLocal posted about the change in the local 3 pack:
Mockup of What the Ad in the Local 3 Pack Could Look Like from BrightLocal
How Can You Buy Your Way Into the Ad in the Local 3 Pack?
It has been reported that the 3 pack ads will be part of AdWords Extensions. Ad extensions is a feature that shows extra business information with your ads such as address, phone number, and links. When and where extensions show depends on your ad rank and where your ad is positioned on the results page. Ad extensions add to the appeal of your ads, and there is no additional cost to add extensions to your campaign; you are just charged for clicks on your ad like usual.
Local extensions show your business address, phone number, hours and ratings by location. You’ll recognize this as the information shown in the local 3 pack. On mobile, they can include call, direction, and detail buttons that do count as a click for your campaigns.
Google's Example of Local Ad Extensions
The cost of clicks on extension are set the same as headline clicks, so the most you’ll pay is what is minimally required to keep your extensions and ad position. Ads in higher positions have a higher cost per click (CPC), so it is not a stretch to put the cost of the ad in the local 3 pack due to competition for prominence on search results pages. You’ll pay just enough to beat the ad rank for the advertiser with the next highest ad rank or the minimum ad rank necessary to appear in that position when dealing with ad extensions in AdWords. We’ll have to wait and see if Google makes any changes to the extension guideline to buy the ad in the local 3 pack.
How Do Consumers Feel About the Ad in the Local 3 Pack?
Raise your hand if you excited about one more ad and one less earned spot in the local 3 pack. No one? No surprise there (and if I missed you, please leave a comment, so you get the acknowledgment you deserve). Curious how consumers would respond to the ad in the local 3 pack format BrightLocal surveyed 690 U.S. consumers. They showed them the mockup above and asked them to imagine they were searching for a local dentist in Google and were presented with the mockup results.
BrightLocal Survey Results for Ad in the Local 3 Pack
Here are the results of that BrightLocal consumer survey on the ad in the local 3 pack:
Q1. Which of those top 3 businesses are you most likely to click on?
–> 36% would click on the top (1st) business
–> 20% would click on the middle (2nd) business
–> 43% would click on the bottom (3rd) business
“… Reviews may play a big part here; the most popular 3rd listing has positive review stars, whilst the middle result with zero reviews was the least popular. Also, in terms of pixel space, both the 1st & 3rd listings take up more room due to their display of opening hours…”
Q2. Why did you click on that particular business?
–> 47% of consumers picked a business because it had positive review stars
–> 16% picked a business purely because it was the top result
–> 13% picked a business that stood out to them first
–> 12% picked a business which a business name they liked
–> 13% either picked a business at random or are unsure why
“… A majority 47% chose a business because it had positive review stars. The paid listing may have the top position, but it doesn’t have the eye-catching star rating & orange review stars. This just shows that having a review strategy in place will only take on more importance once Google rolls out the paid local results…”
Q3. Did you notice that the top listing was an advert with an ‘Ad’ icon next to it?
–> 60% of consumers did notice the Ad icon on the top result
–> 40% of consumers did not notice the Ad icon
“…Searchers are used to seeing PPC results by now & most understand that they are adverts even if they’re not entirely sure how they work. However, consumers may have a different reaction to being served paid listings in local results…”
Q4. How do you feel about Google including paid Ads in these type of search results?
–> 42% of consumers like paid Ads or are happy as long as the businesses are relevant
–> 44% of consumers dislike paid Ads or would prefer not to see them
–> 14% feel tricked by Google
“When served with a paid ad in the local pack, 58% of consumers have a negative reaction, whilst 42% have a positive or indifferent reaction. Furthermore, 14% feel tricked by Google.”
What Is Next for the Rollout of the Ad in the Local 3 Pack?
During the Q&A portion of the SMX Advanced Local Workshop in late June, Ali Turhan, Google’s Global Product Lead for Local Ads, said that Google was still testing, and the ultimate result might be different from the grainy smartphone photo (or creative mockup) shown above. As Google engineers a final product for introducing an ad in the local 3 pack, there could be variations that have a purple “ad” designator or they could decide three organic results and one ad is the magic combination. What is for certain is the ad in the local 3 pack is coming, customer reviews are still important, SEO is a must, and optimizing your Google My Business listing is the only way you can compete for a spot in the organic results of the local 3 pack.