June 13, 2006
Case Study

Running Ads in Google Local vs Main Google Search -- Disappointing Results (So Far)

SUMMARY: Last year local search ads were hype-du-jour in the online marketing world. For example, research firm Borrell Associates predicted local search ads would explode from $330 million in 2005 to $3.9 billion in 2010.

We wondered about the practical reality behind this hype. Does buying local search ads work right now? Here's a Case Study of a real-life campaign conducted by a retail chain over the past few weeks:


"About 600 manufacturers have popped up in the last few years. Before there were probably only three to four," says Ken Krutick, VP Marketing for Dormia Inc., makers of high-end mattresses.

Most of these companies target the same end consumer: aging boomers with expendable income. This demographic is educated and used to controlling their destiny and personal choices. They're perfect to target with search engine marketing -- except for the insane competition that is.

Krutick's Web team spent this last winter revamping the company's Web site to create a clear conversion path from visitor to local store foot traffic. "We have 25 company-owned and operated stores, plus a network of 650 dealers across the country we're trying to drive traffic to."

The site was also re-optimized for organic (free) search engine traffic, but Krutick needed a more aggressive approach than SEO-alone. Why not, he wondered, test ads on Google Local?

After all, consumers surfing relevant Google Local listings must be incredibly good prospects for local store foot-traffic…


Krutick discovered that unlike regular Google advertising, Google Local requires that your URL be listed in the organic rankings for that search term before they'll take an ad from you. Why? Because the local search includes a map and driving directions for every listing, and unless you're in the local listings already, Google Local hasn't mapped your location.

-> Step #1. Get organic listings in Google Local

"You cannot get a paid listing for a local location until they map you to make sure you're legit." As of this writing, local merchants can apply to be listed in either of two ways:

A. Request Google send a postal mail letter to each of your locations, which then the store manager could sign and return.

B. Upload an excel spreadsheet with all your locations along with the items you sell into Google Base. Google then sends an email to the person who uploaded the spreadsheet which you need to return.

Either way, getting listed would take roughly eight weeks. Krutick chose the latter method because it gave him more control -- who knows when a busy store manager at any one location will be able to reply to paperwork from a search engine?

-> Step #2. Invent a conversion measurement device

The problem with running online ads to drive foot traffic is it's hard to measure properly. You know how many clicks you got, and what those clicks did on your site, but you don't know if they actually went to a store and purchased.

Krutick's team created a 10% off discount coupon that would appear on the landing page (see link below for sample coupons.) The coupon, which echoed the brand's colors, featured the local store's name and location. If there were two stores in a local area, the coupon listed both.

Plus, every coupon featured a deadline, "We try to have a sense of urgency that's immediate. The coupon reads 'Now through Sunday' even if we have a two or three-week window. Otherwise they put the coupon away and don't come in the store."

Dormia's stores and dealer network used a POS system that counted the coupons redeemed by campaign - Google local vs main Google.

-> Step #3. Run ads on both Google and Google Local

The search marketing team decided on an initial test run of two weeks, which allowed for enough responses to come in (based on past search marketing results) for a fairly reliable result.

In order to compare apples-to-apples, the team tried to make both campaigns identical:

- Same coupon on landing page (except for tracking code)

- Same search terms advertised under

- Same geo-targeted areas advertised for

- Same copy on ad except the headline (Google Local restricts headline copy to only the name of the store itself.)

The initial test ran in late May 2006.


Krutick is extremely glad he measured results based on coupon redemptions rather than relying on clickthrough rates. Turns out Google Local ads had a higher clickthrough rate than regular Google ads (even when geo-targeted by visitor).

However, out of the piles of redeemed coupons, not a single coupon came from the Google Local ads. "100% of total conversions were from Google.com, not Local."

Partly this was due to the fact that although Google Local ads may get high clicks, there just isn't much traffic there to begin with. According to Hitwise data (see link to chart below), less than 1% of total Google traffic goes to Local. However, Krutick assured MarketingSherpa that his Local ads got more than enough clicks to the coupon page that there should have been redemptions if the conversion pattern even remotely matched the main Google.com lead redemption.

So why didn't Local clicks convert? No one knows for sure as no survey was conducted. But, the head of Krutick's search team did share this speculation, "Marketers are thinking Google Local is going to be used like the yellow pages. You know, you look there when you're ready to buy something and you want to know about local merchants.

"In reality it didn't turn out that way for us. Our theory is at Google.com, people are buyers and they are looking for a local store that sells mattresses. However at Google Local, the most searched for term tends to be store name, not category. It's possible people are only going to Local if they are actually searching for the store itself."

No matter why the test failed, Krutick is pleased by one part of the outcome: turns out Google Local feeds the top organic search results on the main Google.com site for particular terms. So by uploading all Dormia's locations to Local, Krutick's now getting better-than-ever organic clicks from main Google.

And, in such a competitive field, that's worth a lot.

Useful links related to this article:

Creative samples - coupons used to track search campaigns


Google Base


Google Local


Hitwise data on Google properties traffic


Borrell Associates' past report on local search spending


Search Mojo Inc. -- the search marketing firm Dormia used to run this test as well as its site optimization efforts:


Dormia Inc.


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