“Think ServiceMagic vs. a local contractor bidding on “San Francisco contractors.”
That’s why I think we’ve seen Google moving to take up SO much screen real estate with the 7-pack and Local Listing Ads. They saw that their $$ was going to come from the Service Magics of the world, whose sites tended to rank well organically, making them less likely to buy PPC.
Now, with the 7-pack only showing brick-and-mortar locations, those guys are forced to spend on PPC, and the consumer still gets to see the moms-and-pops they expect to for those types of searches.
This is a very important point . . . Is Google trying to “level the playing field” for local SMBs by making it almost impossible for aggregators, verticals and directories to enter the 7-Pack and by “consuming” so much of page one? It makes SEO for these “resellers” difficult-to-impossible.
In other words now the SMBs themselves have the “upper hand” in terms of showing up on page one . . .
This forces directories, verticals and others who are trying to drive traffic and leads to their SMB advertisers to do one or both of the following:
- Buy AdWords on their behalf or on behalf of aggregated SMB landing pages (see Matchcraft; but this is a much longer conversation)
- Find traffic from other sources (each other, etc.)
They still must do SEO for themselves and their advertisers; it’s just not as effective as it once was. And this changes their strategy vis-a-vis Google at least. They need to sell a range of products and source traffic from all qualified places, including Twitter, Facebook, etc.
The bazillion directory sites that all previously ranked for a query like “dentist, san francisco” or “plumber, san antonio” in the old regime represented a kind of spam, such as used to be seen in the travel context with affliates that were grabbing organic links and then sending clicks to hotels.
Thus Google has mostly improved the user experience but put others in the local space that relied on organic traffic in the position of now having to buy it because they can longer get into the first page of results.