Google Creates A New, Simplified Ad Unit For Local Business

In December 2007 Google promised to develop a radically simplified version of AdWords targeted at the mass of small businesses who could not or would not take the time to set up an AdWords campaign. The working name of the program was “Simple Ads.” It was semi-formally announced at the Google Local Markets Symposium, a partner meeting held at the Googleplex that I attended at the time. Eagerly I waited and waited to see how Google would diminish or eliminate the complexity of AdWords for local businesses.

There was an experiment with call-based lead generation in a distinct marketplace (”Google Merchant Search”). But that was discontinued.

Those “Simple Ads” never materialized publicly — until today. A version of the concept has now been introduced (in test form) as “Google Local Listing Ads.” Here are the high-level points as I understand them from a brief call with Google this evening:

• These are new ad units that will appear both on Google.com (above the “10 Pack”) in local results and in Google Maps. They will not therefore compete with AdWords
• They will not carry any creative, just business name and contact details — and a link/URL
• The URL in the ad can be directed to Place Pages (confirming this earlier speculation from last week) or to a website
• The ads are priced on a flat-fee basis (but prices vary by market and category). Google would not disclose the range, but I believe they begin at $20 per month and may go up to $200 or more dollars. But they’re experimenting with pricing. The first month is free.
• To participate the business must have a verified presence in the Google LBC

In many respects, these ads bear a strong resemblance to a program that Yahoo has been running for several years, Local Featured Listings. Yahoo has reportedly had huge success with its enhanced listing product. But the company has not disclosed numbers for its higher-priced Featured Listings offering.

The new Google Local Listing Ads will be accessible under a new “Ads” tab in the LBC and will be a self-service product. The self-service comes in the form of claiming the business listing in the LBC. The ad unit is automatically created by Google, so there’s no work on the part of the small business, except to sign up and provide a credit card. It did not sound like Google was going to push these new units through resellers, as was implied with the earlier Simple Ads concept.

Here are two screenshots Google provided, showing placement of the new ad units on Google.com and in Google Maps:

Some time after I spoke with Google this evening I shared the news with a group of local SEO experts at dinner following Day 1 of SMX East. There was considerable debate among the group about whether local businesses would sign up for this program and how successful it would be. (Google is only offering it right now in San Francisco and San Diego as part of a limited test.) For context, there are 3+ million traditional yellow pages advertisers and 20+ million small businesses in the US. The vast majority of those businesses have fewer than four employees or no employees at all (sole proprietorships).

I believe the program has enormous potential, but it will depend on exposure and awareness. The flat pricing is right and the automated ad creation means zero work for the small business. However, at least in this early period, Google won’t be doing any promotion for the program — other than exposing me and others, who will certainly write about it. Mainstream news coverage may result, which may in turn trickle down to prospects.

What Google ought to do, however, when it’s ready, is run TV or take out a full-page ad in USAToday. To get proper attention for this Google needs to depart from its typical promotional methods in my opinion. Regardless, this program (though preceded by Yahoo), can be seen as a potentially dramatic development for Google and the local marketplace more generally. This will truly be the test of the conventional wisdom that a direct sales force is necessary to penetrate the local market.

Here’s the customary Google video explaining the program:

Postscript by Barry Schwartz: You can now see these ads in the Google AdWords listings. For example, a search on landscape design san diego returns these ads: