We recently conducted a case study to figure out Google’s local seo algorithm. The outcome of the study was very clear to understand. It was clearly possible that small local business could get themselves listed in the local pack and literally outrank large scale corporations!
By using really easy and smart techniques, such as inserting your location name in the website URL and building citations, a local business can have the power to literally dominate the local SEO.
But, what about paid search? How can a small scale local business compete with large business for AdWords?
This led to our next study – on what ground can a local business compete against large corporates when it comes to paid ads?
Now our goal was to find out how can a local business compete with wealthy national chains and corporate, when it comes to paid and local search.
Large national companies might be leading and dominating AdWords, which might make it almost impossible for small companies to place bids against them. But, it actually might not matter at all, because smaller companies can rank in the local search, which could give small companies a competitive advantage over wealthy and companies.
After pulling over 30,000 phrase matching queries, many phrases included “near me”, to obtain local results. Later we analyzed the results. And that included AdWords on each SERP. In addition, we dug even deeper and selected verticals which we knew contained both local and national competitors, in regards to analyzing an actual industry example.
The ultimate challenge about the AdWords and local results is the way SERP varies widely, based on your location, query and what exactly are you searching for.
For example, a simple search for “winter coat near me” revealed an ad carousel, even if we were looking for a store located locally that sells winter coats. Only one of five results have a local indicator.
When searched for “raman restaurant” pulls a local pack.
But, when searched for “ramen restaurant near me” pulled only one pack.
Notice none of the SERPs pictured above have any ads. Things get complex, when you began searching for keywords having AdWords biddings.
Do searchers more likely to click on paid ads or on local results?
Casey Meraz conducted a heatmap analysis, published by Moz, to understand and analyze where do users most likely click, based on the SERP layout when presented with ads and a local pack. We found that his findings are worth mentioning here.
With paid ads on the top and followed by local pack beneath, most of the users clicked on the first local result.
With SERP ads on the top, and with only a single local result underneath and then the local, most searchers clicked on the first organic result.
Even if there is a wide variation between local SERPs, pack placement, as placement and even whether ads appear, the user trend is consistent. When compared with ads vs organic results, majority of the people preferred clicking on organic results.
Casey’s data from the Moz couldn’t make it any clearer than this:
When it comes to paid clicks its only 15%!
This guide was the understanding of our analysis. As we went deeper into the study, from a statistical stand point, we knew that local organic results were likely to receive more clicks that AdWords.
What We Found
One of our drill-down verticals was a geo-specific query for law firms, from a New York City area IP — “lawyers NYC.”
We compared two different levels of search results, AdWords vs Local Pack. We were curious to find out what was really different between the two and there advantages and disadvantages of spending money on Local SEO and AdWords.
Local Pack Results
In total, we analyzed 21 organic results,
1. Out of which 19 were law firms
2. Out of 19, 16 where local firms,
3. Out of total 3 had national presence.
The data analyzed was somewhat different. In total, we analyzed 26 results,
1. Out of 26, 11 were local law firms
2. Out of rest 15, 11 were informational sites and directories.
3. We found 2 law firms with national presence.
4. And last 2 were law firms form different parts of the country and were not relevant to local market.
Summary of our findings:
Most interesting part was the way the two lists overlapped.
1. Out of all the local pack results, only one result was listing in AdWords as well.
2. Only one out of the AdWords Result was also present in the local pack. But this result differs from the above.
Based on the data we gathered, there is a very little overlap between the two.
If your ultimate goal is to gain local traffic to serve local area then, we would suggest you focus on local SEO results and not going with biddings and AdWords.
For most of the digital agencies and business, throwing money on AdWords seems logical for gaining fast and easy traffic.
Valuable Finding: Don’t waste money by bidding on AdWords, if you are a local business competing against wealthy corporates.
If you are a small business trying to compete with a large corporate, investing in local SEO instead of AdWords.
You ask why? The reason behind this is, if you are a local business, you have all the possibility of getting a spot in the local search results. Your local marketing searching for local stores are more likely to click on your local posting than paid results. That means in terms of clicks you win the battle my friend. This is also proves that you’ll be wasting money on paid search placements.
In order to compete with large organizations locally , always keep these key points in mind:
1. Google’s local algorithm always ranks local businesses in the local pack , not national corporations.
2. Most local users, prefer clicking on local and organic results rather than paid ads.
3. Competition in AdWords can be pretty expensive, it eventually means throwing money away. You probably won’t have the big budget that like the big players.
4. Mistakes in AdWords can be easily made.
So here is what you should do, instead of spending on AdWords. Follow these simple instructions:
1. If you don’t have a Google My Business page set up. Set it right here.
2. If you have a website, do not forget to mention your name, address, phone number in the header or footer and on specific pages for example, “About us” page or “Location” page.
3. Use Schema.org data markup on the NAP in the website, like this (insert your own information for the all caps placeholders):
ADDRESS LINE 1
4. Create social media pages. Add your business to industry specific sites.
5. Provide your best services and always work hard on building positive reviews. Because business with high reviews may rank higher in local packs.