One of the hottest topics of the past week was how Google’s local services ads are affecting regular Google Ads accounts. From Joy Hawkins on Search Engine Land:
At first, we assumed these ads were stealing clicks from the local pack results but were surprised to find that although it did lower the click-through-rate of the Google My Business listings, the average impact was only a loss of about 5 clicks a month. However, when we looked at several Google Ads accounts for several lawyers, it told a very different story.
In this example, after Local Services Ads launched, this lawyer saw their cost per conversion double and their number of conversions drop in half”.
Joy Hawkins is a local search expert, so he knows what she’s talking about. These ads for local services were launched a few years ago. They targeted different industries and had Google Guarantee badge. They are designed to attract direct leads to approved companies that have to overcome a lot of obstacles to get approval. But the question is whether these local service ads are distracting their regular Google Ads account and local ads. And Google is driving companies towards this local service option.
So, after Local Services Ads launched, the lawyer noticed that the cost per conversion doubled and their number of conversions drop in half.
From Google’s point of view, it makes sense to encourage advertisers to advertise local Google Guaranteed services because it basically does a good job and seems to be better for consumers. Typical advertisements from many local businesses may sound like spam, but if they have the Google Guaranteed badge on them, it means they are of higher quality.
The real snag is why doesn’t Google remove spam? We know they can do that. But they’re creating a new program that companies have to buy and pay in order to get that Google Guaranteed endorsement badge, rather than clean up the clutter.
So, while observing the search results, you may notice that these ads are “stealing traffic” from traditional paid ads, because they appear higher and have a lot of rich features (reviews, photos, etc) which make them appear more attractive.
Therefore, if you are in an industry where local service ads have not been launched, it is recommended to keep a close eye on your Google Ads account when the ads are launched. If you notice a rapid deterioration in the performance of your Google Ads account, it might be a good idea to shift your budget from that account to local ads not to waste your money.
