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Google Further Monetizes Places by Charging for Directions

Thursday, June 02, 2011

With the announcement that they will now charge advertisers when searchers click for directions from a local ad extension, Google has taken yet another step in its march toward the monetization of the Google Places channel. Since launching location extensions integrated with a Google Places account, Google has been pushing the product hard with local advertisers. I’ve heard many Google account managers promising increased clickthrough rates with local ad extensions (of course, higher clickthrough rates actually benefit Google more than the advertiser).

Clicks on the little link for directions on a location extension-enabled ad used to be on the house. No more. Now advertisers will pay for those clicks just as they would pay when someone clicks through to their site from the headline of an Adwords ad. So, what’s the big deal? On its face, it only seems right that advertisers would pay for these clicks. They’re getting prominent positioning in the Places channel by bidding on keywords and enabling location extensions. They already pay for clicks on their ad headline (and clicks on the phone number in Google’s mobile network). While it may be subtle, this move is a significant shift.

Advertisers will now be paying for a click that keeps the user within the Google Maps channel. Although there is new reporting in Adwords to show activity from these clicks, they’re now essentially paying for something that does not result in a visit to their site, and therefore loses all of the tracking that goes with it (coupon conversions, engagement metrics, trackable phone numbers, etc). Advertisers and agencies who report on things like cost per visit and cost per on-site conversion will have to watch this closely and adjust their metrics accordingly.

The bad news is that the only way to opt out is to disable location extensions. If you have them enabled, that little blue link for directions will appear, and you will pay for those clicks. The meta-message here is that the Adwords and Google Places channels are continuing to converge. This makes the proper management of the Google Places channel that much more critical, and since the other search engines and local search properties usually follow Google’s lead, a comprehensive strategy around online business listings is a must.

The process for getting your listings right hasn’t changed; it’s still an undertaking that requires a lot of detail and heavy lifting. It’s just getting that much more important. Going forward, a best-practice local search campaign will want to include a robust local SEM strategy and a strong local listings management offering, and integrate the two channels synergistically. Agencies who don’t have strong backgrounds and competencies in both areas will struggle as the lines between these channels continue to blur. Whether it makes business sense to continue to tie them together with location extensions under the new guidelines will just be one more thing to keep an eye on.

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