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Google Expanding ‘Local Services’ Lead-Gen Ads to 30 Cities

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Google has renamed its “Home Services” ad program “Local Services.” Launched originally in 2015, it’s rolling out to 17 cities in the US. And by the end of the year it will be in 30 cities.

The program covers a range of categories, including housecleaning, painting, electricians, garage door services, HVAC repair, locksmiths and others. I suspect its scope will be expanded to more categories over time, hence the rebranding.

Local Services ads are not part of Google AdWords. This is a separate program: lead-generation at fixed pricing, which is set by Google on a geographic and category basis (housecleaning in Seattle). Google wouldn’t specifically discuss how it determines prices. But there’s no auction (at least for now).

Accordingly, there’s no bidding and no unpredictability for the business owner. They determine how many leads they want per week and set a weekly budget, which can be adjusted. Everything can be managed from a smartphone app.

Business owners only pay for calls or “online requests.” In some categories messaging is available but most leads come over the phone. Ads appear both on the PC and mobile. There’s a profile page with additional information if the consumer clicks-through.

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Reviews come from Google My Business and directly through the program. Increasingly Google will mark reviews as “verified” if it knows they came through Local Services. Reviews are an important factor in rankings but Google would also not discuss that element of the program, as one might expect. Response times might also factor into rankings/visibility (my speculation).

The “Google guaranteed” badge comes through a verification process that involves employee background checks, as well as insurance and licensing checks. The badge is intended to inspire consumer trust. Certification can take up to two weeks. The badge also means that Google will cover claims by customers if that person is “dissatisfied with work quality” (there’s a lifetime cap of $2,000).

Here’s why the program rebranding and expansion are significant:

  • Google has figured out the formula for success
  • The rebranding as “Local Services” likely means that a broader array of categories will be included over time
  • The program delivers phone phone leads, which are preferred by most businesses owners
  • Pricing is simple and predictable — “how many leads to I need/want this week?”
  • It’s simpler and more effective (today) than AdWords Express, nearly “set it and forget it.”
  • There’s no copy or headline writing or keyword bidding/management to master
  • It can all be managed from a smartphone app

This is most dangerous for companies such as Thumbtack and HomeAdvisor, which will have to push further into back office management and other services to compete. Amazon Home Services is a program that seems to be idling right now.

In terms of the larger picture, Google is seeking to dramatically simplify marketing for SMBs. It’s also moving to more “concrete,” outcome based models (like Facebook). For enterprises and retailers, Google is measuring offline store visits and I suspect that will ultimately come to SMBs.

There are third parties now promoting cost-per-visit models and I wouldn’t be surprised if Google eventually did that for some categories of SMB retailers. On the services side, where storefronts and visits are less important or not important, the company is doing things like this — dramatic simplification that focuses on customers and outcomes rather than clicks.

For those competing with Google (and Facebook), it will soon no longer be sufficient to sell “clicks” or “views” or “impressions” to SMBs, you’ll need to be able to sell and measure outcomes. Alternatively you’ll need to establish deeper relationships with customers or manage marketing across platforms to compete.

The SMB market is evolving quickly. You’ll hear more about that in depth at LSA’s Cloud Adoption Summit in San Francisco on December 7. If you miss it you make yourself more vulnerable to “disruption.” 

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