Over the past year, you may have spotted a new kind of Google ad on a local search. It looks something like this one (on a search for "oil change" from my Pixel phone in the Chicago suburbs):
These ads seem to appear primarily on mobile results, with some limited testing on desktop results. We've heard rumors about local pack ads as far back as 2016, but very few details. How prevalent are these ads, and how seriously should you be taking them?
11,000 SERPs: Quick summary
For this study, we decided to look at 110 keywords (in 11 categories) across 100 major US cities. We purposely focused on competitive keywords in large cities, assuming, based on our observations as searchers, that the prevalence rate for these ads was still pretty low. The 11 categories were as follows:
- Apparel
- Automotive
- Consumer Goods
- Finance
- Fitness
- Hospitality
- Insurance
- Legal
- Medical
- Services (Home)
- Services (Other)
We purposely selected terms that were likely to have local pack results and looked for the presence of local packs and local pack ads. We collected these searches as a mobile user with a Samsung Galaxy 7 (a middle-ground choice between iOS and a "pure" Google phone).
Why 11 categories? Confession time – it was originally 10, and then I had the good sense to ask Darren Shaw about the list and realized I had completely left out insurance keywords. Thanks, Darren.
Finding #1: I was very wrong
I'll be honest – I expected, from casual observations and the lack of chatter in the search community, that we'd see fewer than 5% of local packs with ads, and maybe even numbers in the 1% range.
Across our data set, roughly 35% of SERPs with local packs had ads.
Across industry categories, the prevalence of pack ads ranged wildly, from 10% to 64%:
For the 110 individual keyword phrases in our study, the presence of local ads ranged from 0% to 96%. Here are the keywords with >=90% local pack ad prevalence:
- "car insurance" (90%)
- "auto glass shop" (91%)
- "bankruptcy lawyer" (91%)
- "storage" (92%)
- "oil change" (95%)
- "mattress sale" (95%)
- "personal injury attorney" (96%)
There was no discernible correlation between the presence of pack ads and city size. Since our study was limited to the top 100 US cities by population, though, this may simply be due to a restricted data range.
Finding #2: One is the magic number
Every local pack with ads in our study had one and only one ad. This ad appeared in addition to regular pack listings. In our data set, 99.7% of local packs had three regular/organic listings, and the rest had two listings (which can happen with or without ads).
Finding #3: Pack ads land on Google
Despite their appearance, local packs ads are more like regular local pack results than AdWords ads, in that they're linked directly to a local panel (a rich Google result). On my Pixel phone, the Jiffy Lube ad at the beginning of this post links to this result:
This is not an anomaly: 100% of the 3,768 local pack ads in our study linked back to Google. This follows a long trend of local pack results linking back to Google entities, including the gradual disappearance of the "Website" link in the local pack.
Conclusion: It's time to get serious
If you're in a competitive local vertical, it's time to take local pack ads seriously. Your visitors are probably seeing them more often than you realize. Currently, local pack ads are an extension of AdWords, and require you to set up location extensions.
It's also more important than ever to get your Google My Business listing in order and make sure that all of your information is up to date. It may be frustrating to lose the direct click to your website, but a strong local business panel can drive phone calls, foot traffic, and provide valuable information to potential customers.
Like every Google change, we ultimately have to put aside whether we like or dislike it and make the tough choices. With more than one-third of local packs across the competitive keywords in our data set showing ads, it's time to get your head out of the sand and get serious.
YAAASSSS!!!! So glad you did this research Dr. Pete!
It would be interesting to get data from the Local Ad perspective to see what conversions look like on the paid side of local. Curious if that's been done already?
Also curious if certain non-company-loyal searches see more ROI from paid local ads than others.
Unfortunately, since this is currently part of location extensions, I'm not clear how the metrics break out or if you can view them independently (if anyone on the PPC side knows, please speak up). What's interesting is that, since the first click is to Google, you're not billed for that click, so I'd be very curious how the ROI breaks down.
Yes, you can track performance: https://support.google.com/adwords/answer/7040605
And this is what you're charged CPC for:
Note that when you look at the location extensions in AdWords, the CTR shown isn't the full story. Make sure to choose Segment > Click Type to see how the clicks break down. Additionally, you can track conversions by click type in some instances.
Happy to expand further as needed!
Thanks, Dana! Hope they make that UI a bit friendlier. I do think it's interesting that you get charged for the actual post-Google engagements. I can imagine Google using that model for many other properties.
Absolutely on both counts! I think they'll start expanding it into other possible options too, such as messaging.
I'm behind the 8 ball on this article. We've had ads showing in the PAC and on maps for some time having tied adwords to GMB and applying location details. What I hadn't paid attention to is that the ads are landing on the KP not our landing pages. That was not the case a year ago or months ago....was it??? I frankly don't recall.
I'm testing it. As I click on the pac ad its taking me to the kp...so far I haven't seen any indication of a cost . Is google charging for this??? Damned if I know. On one mobile experiment I clicked on the website from the KP. Real Time data was saying we had a visitor via organic. Of course that doesn't tell me whether google charged for the ad hitting the KP or not.
Does anyone know the status of this? Is google adwords charging when a visitor clicks on the 3 Pac or Maps ad and the visitor sees the KP??? That is not something I'd be happy to pay for!!!!!!
BTW: Dana thanks for expanding on how to track these clicks. Last year I had to go through a number of adwords consultants to get some strong confirmations that clicks on the 3 pac/maps/local finder were recorded via the segment element. I never thought of driving directions or calls as a possible additional source. But really driviing directions and calls can come from top of search page ads and not the maps sections. A bit confusing possibly? eh???
It's a bit different model -- you don't pay for the click to the Google maps property -- you pay for a handful of different types of engagements after that (click-to-call, website clicks, etc.).
Dr. Pete: First sorry for the very late response. It looks to me like we pay for the click on the ad. It goes to the local kp. I did the clicks. I didn't do anything else. I found the costs associated with the keyword. In GA under Adwords it showed the search phrase, the cost for the phrase (same cost as showing in adwords) but no click to the website. In other words search phrases in adwords get charged but they don't deliver to the site and GA shows the cost and shows no traffic.
I see it as a cost on delivering the traffic to the KP, regardless of anything else!!!
I'm in the midst of doing some massive changes on adwords accounts. Too many suspicious problematic EXPENSIVE elements to Adwords
I wonder if we can get this topic to be expanded upon in the next #ppcchat on Twitter! I would love to hear their thoughts on how valuable it is (esp considering that you don't pay for the first click??).
Wow, that is a crazy stat Dr. Pete, way more than I would have predicted. I am continuously getting more clients asking "How To Get Their Ads In the Maps" section though so that is a good sign. I would love to see a case study or example of results from a business that was previously doing AdWords w/o the location extension, to enabling it to show Local Pack Ads. Thanks for sharing!
Heard first time about "Local Pack Ads"
Never seen any ads in local listings.! but it seems interesting as we can get leads easily.
Intuition Softech - SEO Company Adelaide
Yes! We had this happen to a client who is a locksmith. It's really affected his business in a negative way because (just like they want to have happen) people click on the first thing they see thinking its "top rated" when its really just an ad. Sigh...I would think with the drop off of Google ads this was a great way for them to retrieve some of that revenue. I also completely agree with your statement of the "disappearing website". Google loves itself some Google! We just need to be prepared for that to never change.
I just started noticing some of these for my local industry mid-last year, but am excited to try them out! Anyone know if they have a better CTR than normal text ads in Google AdWords?
Curious to see if, moving forward, they'll add a few features to the paid local and then only show two organic.
Looking at what's happened with hotels, restaurants, and other specialized local packs, I think we can definitely expect more experimentation and feature launches. If ad engagement is solid and doesn't hurt other metrics Google cares about, we're going to see more ads.
I think that's right on Peter. I hadn't even thought about how specialized local packs may be affected by features (not even ads), and the local businesses that use them.
Thanks for this case study,
I love those cases studies. It is amazing how much works you put in understanding the SEO and SEM world. It is no surprise that you are the main source of information I refer to when keeping up to date with the SEO world.
As you said, SEO is a challenging world that keeps changing and is getting less and less organic and more and more paid. The "disappearance of the "Website" link in the local pack" is bad news for website traffic, but it is what it is, and we have to keep up!
Thanks Mr. Meyers!
Hi Dr. Pete,
Thanks for the hat-tip. I was curious on how it would appear if a lot of advertisers come into play. Also, it's not following any relevancy on nearness aspect as the advertiser in the screenshot is way far than the next relevant organic local pack result. Not sure if Google really cares for the relevance here. The search landscape is changing drastically. Thoughts??
I agree that these ads seem to be targeting much more broadly, location-wise, then regular pack results. I expect the ads to get more location specific as more people buy in, but there's definitely two separate algorithms going on. The flip side of this is that, if you're trying to target an area you're not that close to, there may be an opportunity here (within reason, of course).
Absolutely Dr. Pete,
Joy Hawkins says your ad can show up in the local pack for cities even if your business is not located in them. In a recent webinar she mentioned that if the searcher was near you but searched for the nearest big city your ad could show up in the local section of search.
Then I found this:
Does it Only Rank in the City the Business is Located in?
Nope! We’ve seen lots of cases where the ads show up in surrounding cities that the business is targeting with keywords. For example, if you are in Minneapolis and you are targeting “home insurance St Paul” you can have your ad show up in the 3-pack in St Paul even though you aren’t located there.
https://www.imprezziomarketing.com/ads-in-the-3-pa...
For the top Local Pack listing to be an ad is obviously a major development, especially in a local-mobile search context.
Thanks Dr. Peter J. Meyers.
Good post Peter, in my case I have to say that the local search is increasing a lot and depending on where you look, one result or another appears. I with my company what I could verify and especially in mobile. And I have never used the word of my city because I am not interested in positioning myself in the city where I am, since it is an online store. Thanks
I love coming to this site every day. Some days I get to learn how what I am doing is right in keeping with good practice, but it is always nice to have new challenges present themselves to keep the job interesting. Thank you for this great article.
The same thing happens to me, I love the day I met the website =)
Dang, 35% is way more than I would have guessed! We have been advising clients that are having trouble ranking in the Map Pack (or perhaps are targeting more than one city with mid-to-high level competition) to test out the Location Extension in AdWords. Hoping to see some solid results from it, but thus far it does give clients peace of mind to see their business at the top of the Maps section.
I'm genuinely confused as to why someone would buy a local pack ad that links to.. their Google listing? Am I missing something here?
Anyways, appreciate the testing that gets done for these Moz posts. Really helpful.
For better or worse, regular/organic pack listings also go to your Google listing, so if you want to compete for position, you'll probably be willing to pay. I think it's mixed with local -- for marketers, it's a huge challenge (we're used to controlling our sites). For local business, though, the Google listing genuinely drives phone calls, foot traffic, etc. It's a consistent format that's easy for search users to parse can be adapted to mobile and voice. The truth is that we're probably going to have to learn to let go of the idea that organic search impressions = traffic, at least for some niches.
Thanks for clearing that up. It's definitely applicable in my case. Google listings DO drive a lot of phone calls, it's true. I just couldn't fathom why on earth Google would sell ads to us... to drive more traffic to Google listings and not our own website entities. It's almost as if Google is a business. Wink, wink.
Yeah, it's crazy how Google makes these subtle changes only to benefit themselves. Marketers should always be aware of Google's new updates and adapt.
Good work Peter, this research is greatly helpful for individuals working on Local SEO and of-course specialized local packs will definitely benefit Local Businesses and help them target broader audience.
It is definitely more advantageous too look into getting local business ad placement in the Map pack. Thank you for the confirmation through this article content Dr. Peter.
Great Research, Peter,
Luckily, I haven't seen any ad in my profession so far, but I keep this article for future reference.
Regards.
How true is this is Europe given the legal case regarding Googles using own products? Do you think that they just use parts of world that allow them to do what they want?
I have a local listing where I live and want to have one in another area but Google is asking me to show links from a government site that has my details on it, any advice? they did say if I has a sign written van i could show a photo but I dont have this because I have have had stuff stolen from my van before
Unfortunately, I have no insight on the European market for local at this point. I'm going to guess it's either much lower prevalence or that the program is US only for now (that's just a guess). I know the local service ads are restricted to US cities right now. The EU regulatory issues definitely have slowed Google down.
Thank you for insights, i can show this to my BU team, i was keep telling them that we are lacking this amazing feature since we have physical shops in our neighbourhood.
But the problem is since online shopping industry growing very rapidly people avoiding to go to stores their own and prefer online purchase, that's why most of grocery stores also providing grocery on door steps included fresh vegetables which was the only reason i prefer to go store my own. This is the reason marketing strategist don't spending money on it and prefer amazon and other Adwords feature. even if i share my own stats our online shopping results clearly make difference rather than physical shops but yes it's not mean it's not effective. it helps us to build customer trust.
if we talk about rest of things..as i am very active google local guide user and do reviews and QA very frequently i want to highlight biggest problem of small business owners, they don't know the value of this feature and i assume it's very hard to convince them to use this feature because this is costing same standard cost-per-click (CPC) for location details and other related features so he is not considering Adwords how he will go for this. for example if i am a restaurant owner and busy in making foods and giving my time to restaurant i probably not reading this article and trying some other stuff to encourage people to come my restaurant...it's not about to take your head out from sand...it's about to tell them that you are not even in the game.
PS: This is my point of view and everyone has right to disagree :-)
I certainly agree that that's a big challenge for many retailers -- Amazon's dominance just keeps growing. From an SEO standpoint, though, it does seem like Google is localizing more searches and is trying to sort out intent more. So, some queries naturally lead to online retailers and some seem to lead to local retailers, depending on how Google interprets intent. If I were a local retailer, I would re-focus my efforts on those queries with clear local intent and not waste time/money competing on the queries that folks like Amazon dominate.
I think our keyword research is often based on vanity, in a sense -- *I* want to rank on these terms because they're high volume and I think they'll drive traffic. However, we don't stop to look at intent or how Google interprets those queries. We need to be more selective.
Nice findings, Peter. I am surprised that 35% of SERPs with local packs had ads – I thought it would be much less. For sure they should be taken seriously!
I'm very surprised too. I'm reading this article by recommendation of another Moz article and did not expect this relevance.
I also wasn't aware of how big its impact really was. I thought it was built into its searching ability. Tihs function of google becmoes more then just advertising, its more of a everyday search.
Gran publicación en paquetes locales.
Nunca los he usado, pero es muy interesante ver los resultados después de una investigación. No pensé que era un porcentaje tan grande como 35%
I have some questions about this. We do well in our local pack rankings and for our main keywords we seem to show up in that set of 3 every single time. We're the only ones with Google reviews and it seems that we're the only ones that are focusing on local citations and a deeper local SEO campaign and I know we do well converting via local pack.
None of our local competitors employ Google AdWords therefore there aren't any ads in the local pack listings nor any ad competition.
Would it still be something that we should shoot for? From all of my research we're showing up every single time anyways and we're getting good conversions either via website click or a phone call.
Our niche has a higher CPC bid too - but for the local aspect we seemingly have no competitors using AdWords. Are we still going to have to pay the high CPC amount even though there is seemingly no local competition? Can I put in a stupidly low bid and still show up in that local pack with an ad since no one in the area is using AdWords?
I'm not up on all of the details of how the bidding works, but my sense is that the CPC is tied to the broader keyword, so you if you're paying high amounts normally, you'd still be paying high amounts. The actual charges only come with an engagement (you don't pay for a click to the Google Maps listing).
It's tricky -- if you were to jump in now, you'd have a first-mover advantage, but you've got two things to watch for:
(1) If you already do well in the local pack, you may be paying for no reason or cannibalizing that listing.
(2) If your competitors get wind of it, they're going to start competing with you and drive up prices.
So, do you take the short-term advantage and hope competitors don't notice or wait it out? I'm afraid that's much more a business decision than a technical SEO one.
Wasn't really expecting a reply so late after the post was published and I thank you heavily for responding. Thanks for the insight. It will be something we'll keep an eye on with our competitors and we'll mull it over.
Thanks again.
I've been testing and questioning this. We've run adwords for a very long time, had connected our gmb info to adwords so that ads were showing in 3 pacs and maps listings. We've been running them for over a year. At first I watched it closely. The actual Click through on ads seemed to be minimal. I THINK a year ago they were delivering to the website...but for the life of me I don't recall. Total clicks were quite minimal.
Been cleaning adwords accounts and checking everything. I was caught off guard by the fact that clicking on the ad in the 3 pac drove the click to a KP for the business NOT a landing page. Asked questions about this. Called into adwords on this and get a specialist who confirmed that and that we pay. But honestly the specialists don't know every detail.
So the issue is WHAT DO YOU DO??? Will the ads sitting above a #1 in the 3pac canabalize from clicks to your listing at FIRST in the 3 pac?? ABSOLUTELY. How much?? Who knows???
If none of your competitors are using adwords the bid costs shouldn't be high on some tight accounts with tight connection to your site's content. You can also adjust a mobile version bid down by opting on a pct discount on the bid.
My gut is that running the ads in the 3 pac will canabalize the #1 ranking...will cost something...and frankly it wll get your competitors to see it and also bid.
The only one who wins on this stuff is google. At least that is my humble opinion.
Today I realized that while we're already always in the local pack for the main city where we are located, we do service about a 40 mile radius surrounding said city and we fall out of the local pack when those cities are used as the search term.
So I think we will be getting on the local pack ads, not for the city we're actually located in, but for the cities around us that we service but don't have a physical presence in. I can see this being a big boost as otherwise we wouldn't have any chance of showing up.
Thanks again for the thoughts and response. Without that I might not have realized this simple answer to the situation we're in.
@Travis Milne. I wanted to update my comments on this. I did a little research on our own ad campaigns including the ads running in the 3 pac and other maps products. What threw me was that the ads deliver to the local KP. They don't deliver to your website or a specific landing page focused on conversions. Its the KP.
The 2nd thing that grabbed me is that if you click on the ad and go to the KP...that is all google needs to charge you. I tested it and tested it against very long tail rare phrases.
There are some who are claiming or reminding us that you can track this. You can. You can use a special google tracking # on phone calls. Great. Here is our issue with that. Overall on clicks our TOTAL phone calls are significantly less than 10% of all clicks on all campaigns. By FAR the largest % of clicks come from folks who search on a phrase with a Name or Branding Element. In our cases MOST of those calls ARE NOT sales or leads oriented.
Having said that the tracking capability on location oriented clicks is MINIMAL. Its only the calls, and in our case the percentage of calls is MINIMAL.
But what that leads to me to believe is that this is a campaign with a "license to STEAL". (Before writing that I checked on the parameters for TAGFEE comments. It seems to fit within those parameters)
Here is the issue. Its impossible to monitor clicks to the local KP. Its exclusively Google's property. Nobody has access to it. There is no way to verify it. If Google decided to add 30 ad clicks to the every KP "ad" every month showing on UNKNOWN, but enormous numbers of clicks---Nobody would know or be able to verify it. In fact access to this data is so remote and buried under so many other elements of google data that nobody has access to it is difficult for me to imagine there will be an upcry on this item.
As to calls. I looked at our call/click data over a very long period. We see about 5% of all adwords clicks as calls. Of that percentage a significant higher percentage relates to certain campaign(s) that are brand/name oriented. We monitor all calls. Of the highest percentage of calls THEY ARE NOT SALES or leads oriented. They relate to people dealing with our services on a current basis and call with questions or updates.
So my attitude is that this campaign opens the door for Google to generate ad "clicks' that AREN'T. There is no way to verify what they are doing.
Color me skeptical.
Of course as Dr. Pete said above its a BUSINESS DECISION--not and SEO decision.
Anyway that is my $0.02. :D
I honestly can't say whether people are being charged for clicks to the KP (beyond Google's statements), and I totally agree that, the way it's set up now, there's really no transparency at all and no way to verify this. Standard AdWords, love it or hate it, feels a lot more transparent than this, and Google needs to sort that out ASAP.
Hi, would you know if Google provides you data regarding your area and the searches?
excellent dr. Peter !!! great study in which I have learned many things that I will surely put into practice.
Great research & study. I've got to be honest, I was thinking much the same as you were originally - 5-10% max, but 35% is really interesting.
Do you have any data about the number of these vs the local pack getting reduced to just 2 organic listings?
Keep up the good work.
The cases with two organic listings seemed to be normal and not reduced by the ad placement. Right now, it looks like the ad is in addition to the regular/organic pack listings.
Nice post Dr. Peter! I´ve never used the local pack adds before, but as you say, maybe is time to start using it if we want to keep good traffic for our local business ;-)
Thanks so much for the info!
Great research, I had no idea local pack ads were so prevalent.
I'd be very interested to know about local pack organic v.s. ads CTR's, and whether or not the numbers line up with organic v.s. PPC CTR's we've seen in the past.
Thanks!
hello J.Meyers
How did you find about this 35% of SERP that means they are the ads. not believable !!! Are you sure about it? If you are right then it is good research for a user to understand the Google ads.
This 30%+ shift was first reported in December but it only affected several industries. It looks like it's being rolled out across all industries now. Great post Peter!
Theres really not alot of companys that dont come up in pack ads nowadays. Its become a big part of searching for local businesses.
Correction, 35%
Я согласен с автором статьи
В локальном поиске запросы в хорошей выдаче.
Например "пульты для ворот" на моем компьютере в Омске.
Хороший подарок от Google.
Google translator is terrible on this site ;)
Good coment
Please never leave the comment "Good coment".... it's not even in a reply to anybody. Also that's what the "thumbs up" is for! Thanks pal :)
Quit trying to get Moz links! We see you!!