Google’s Local Ad Targeting Strategies

Yesterday at the “Google Factory Tour,” lots of things were discussed and a couple of things were announced, the “biggest” of which were Google Health going live and display ads for Google Image search. I live blogged it at SEL.

One of the presentations was from Director of Product Management for Local, Carter Maslan. Local and Maps came up numerous times during the discussion in fact. One of the developments that I was not aware of on Google was the recent introduction of a zip-code prompt for certain general but geographically ambiguous queries. Here’s the screen:

Zip onebox

Why is this interesting? For one, Google will have zip-level location information for individuals and can personalize results accordingly. So queries such as “Parks” or “Zoo” or others that fail to include a geo-modifier can deliver locally relevant results.

And, as you guessed, it also allows Google to target ads to the zip level — assuming they exist. (In mobile Google can do something similar with “My Location.”) Google can also infer location for registered users from their Map and Directions queries and can tailor results accordingly. This all supplements IP Targeting.

At lunch, I made the argument to Carter Maslan that with zip-level (or neighborhood-level) targeting, layering US Census data on top of Google’s map-based AdWords interface, turns it into demographic targeting. The challenge for Google is the company would have to add another, sophisticated layer to its algorithm so that it served different ads (based on demographic information) for the same queries to different users based on their home zips or neighborhoods.

Not sure that Google is ready to do that or that the advertisers are yet that sophisticated, despite spending billions on direct mail offline, which is a version of the same thing.

___

I should add that if you’re logged in to Google and Google thinks it has your location, you won’t see the prompt.

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24 Responses to “Google’s Local Ad Targeting Strategies”

  1. Dave Says:

    The value of this has been described by Greg at this post: http://gesterling.wordpress.com/2007/03/01/local-numbers-setting-the-record-straighter/

    I’ve been the recipient and extremely cognizant of the value of generic business and industry searches for years, having a business website that ranks highly for a generic industry term that is inherently local……such as pizza. The volume of traffic to the site from locations around the world has been significant. The conversion ratio is small, needless to say.

    When the rankings for the generic industry term began to slip in google I emphasized adwords for the industry term….with an ad that has appropriate geo modifiers and is run on a regional basis.

    It is a great converter.

    Its a fascinating development….and it will increase the volume of advertisers on that zip code basis, no doubt.

  2. Tim Cohn Says:

    Not seeing it over here yet. Cookies even after logged out still pull my local related results.
    Went to other random data centers and couldn’t get it either.

    Maybe its just a Valley thing for now? Can you generate the zip box?

    Brand and direct marketers will find Zip Code targeting enticing if it makes its way over to Adwords.

    I suggested they add Zip Code targeting in my Google Adwords Seminar application a year ago.

    http://cohn.wordpress.com/2007/05/26/google-advertising-seminars/

  3. Greg Sterling Says:

    Was able to when I signed out.

  4. Tim Cohn Says:

    Adding the location box is ingenious… How else to get around IP based targeting issues / flaws than by creating a User Positioning System?

  5. New Google Local Strategies | LocalPoint - Perspectives on the Local Internet Says:

    [...] you haven’t read Greg Sterling’s blog about Google’s new local ad targeting strategies, it is definitely worth a look. Google is [...]

  6. ian Says:

    smart move, but too bad far less than 1% of queries use ZIP. No doubt this will increase ZIP usage

  7. dave Says:

    Upon thinking about this…there is a different way to look at it.

    Google currently generates plenty of advertising revenue for generic industry terms on a local advertising basis on behalf of sites that are based locally but don’t compete for the generic industry terms.

    If google provides an alternative natural methodology wherein local firms can rank and be seen for those terms, it loses the revenues from that source.

    In terms of revenues coming from local businesses….I have this very very strong feeling…and first hand experience….that that specific form of advertising is rather significant.

    If I was concerned with revenues…I don’t think I’d implement that enhancement. :D

    Dave

  8. David Mihm Says:

    Really an interesting discussion with respect to ad revenues. On the one hand, I can see Dave’s point, where you could get more LOCAL businesses that were targeting a particular geography than you could national advertisers.

    On the other hand, I’ll point back to my theory on Google’s reason for incorporating the 10-pack: inflate the ability for mom n’ pops to rank above the organic results (which feature a lot of well-optimized, well-funded sites like Yelp, etc.) and force the bigger name companies into PPC. In most cases, they’re the ones who can afford larger, more competitive PPC campaigns.

    A great post, Greg. Thanks for bringing it to all of our collective attention(s).

  9. Stan Gauss Says:

    This is definitely interesting.

    A couple months ago Google launched an article search box right underneath the newspaper’s name effectively reducing the time it takes a user to find what they are looking for but creating the possibility for a decline in revenue for the newspaper due to the decreased page views.

    With this development, Google can begin to take the newspaper out of the local search business unless they and the vendors supporting them increase their focus on optimization or as David eluded to, the local Mom and Pops they are targeting will bypass them and move into PPC campaigns directly with Google or through clearing houses like WebVisible and Orange Soda.

  10. Greg Sterling Says:

    Sure. Interesting discussion. See the discussion re Ian White’s “keyword conspiracy” here:

    http://gesterling.wordpress.com/2008/05/15/the-local-paradox-and-iyp-affiliate-network/

  11. Understanding Google Maps & Yahoo Local Search » Local Links of Interest | Developing Knowledge about Local Search Says:

    [...] Google’s Local Ad Targeting Strategies - Greg Sterling, Screenwerks  [...]

  12. Dave Says:

    Very interesting information. I searched in organic google for dentist, dentists, and local dentists (yup….my businesses see plenty of these searches). Similar but not exact matches on ads. A couple of ppc ads for dentist directories…..the directories must sell to the dentists…..and a bunch of ppc ads for a variety of dentists throughout the greater DC metro region….covering an enormous amount of geography. As a customer, with traffic this bad and gas this expensive, would I drive 30-40 miles to a dentist today. Probably not. So maybe there would be greater value to both region wide and smaller market venues for advertising….such as the zip code phenomena.

    In terms of who is going to advertise more as a result of the 10 pac phenomena, David. ……..only Google has the raw traffic data and has a sense of what the customer is doing and where they are clicking.

    Maybe the ten pac will force both big stores and mom and pops to put money into advertising w/ G.

    If I’m a mom and pop and I’m not #1 in an authoritiative 1 map, #1 organic serps or #1 ppc……I’m missing relatively large amounts of potential local business. Within a 10 pac there are 10 competitors and only 1 is listed first. ugh.

  13. Greg Sterling Says:

    The so-called 10 pack is unaffected by SEM. It’s totally “organic.”

  14. ian Says:

    either one can accept things on face value or look below the surface…

    http://www.lostsheep.com/paranoid.asp

  15. W Says:

    I wonder what our local search patent would be would to Microsoft?

  16. Greg Sterling Says:

    There are lots of patents running around in Local and the Mobile space (around location). FYI

  17. Sebastien Provencher Says:

    Greg,

    I think Google is pushing for zip codes, not only for ad targeting reasons, but also because it gives more relevant results in a map-based environment. Keyword/City-type searches in Google are not very relevant IMHO (center of a city?!?) and Keyword/Zipcode search is the hack I’ve been using since Google Maps launched to find more relevant results.

  18. Greg Sterling Says:

    Yes, first and foremost it’s a consumer thing and about relevance. Second it gives them additional location intelligence for ad targeting.

  19. Chris Travers Says:

    The so-called 10-pack makes it even more important for businesses now to get their actual listings correct – and complete with enhanced information. If businesses do not have accurate data submitted to the search sites’ Local and Map directories, they will lose visibility or get their users reidrected. At UniversalBusinessListing.or we see this as a growing trend.

  20. Mihmorandum | What Google’s ZIP Code Targeting Means for Local Businesses | Google Says:

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  21. Google ’10 Pack Map’ Got You Down? or: How I Learned to Stop Worrying and Love Local Search | Thunder Internet Marketing Says:

    [...] Google’s ZIP code Targeting Means for Local Businesses ") and Greg Sterling ("Google’s Local Ad Targeting Strategies "), Google started serving geographic-specific search results for ‘pizza’ in the [...]

  22. Google | Thunder Internet Marketing Says:

    [...] Google’s ZIP code Targeting Means for Local Businesses “) and Greg Sterling (”Google’s Local Ad Targeting Strategies “), Google started serving geographic-specific search results for ‘pizza’ in the [...]

  23. ziare Says:

    thats the future of web search.will get more aaddicted to google now

  24. Google ’10 Pack Map’ Got You Down? or: How I Learned to Stop Worrying and Love Local Search | Thunder SEO Says:

    [...] Google’s ZIP code Targeting Means for Local Businesses “) and Greg Sterling (”Google’s Local Ad Targeting Strategies “), Google started serving geographic-specific search results for ‘pizza’ in the [...]

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