So what’s the big deal? Well depending on your angle, there are different ways of looking at this:

If you’re into SEO you will probably not be welcoming this change since it will become even harder to be seen by potential customers, no matter how high you rank. The opportunity to rank in the local listings is limited and I doubt users will browse local listings as extensively as they do traditional search results (which isn’t a lot in any case)

As a local business owner you should get your business on the map ASAP, literally. Google is placing a lot of effort into local search and with Marissa Mayer at the helm we are bound to see many more changes. The prominence of these local results will wake many small businesses from their slumber and encourage them to create a listing in Google Places, vastly improving the information Google has on them.

But what’s the effect on search advertisers? Firstly I’m surprised Google is displaying a map above the sponsored links in the right column. The immediate effect is that ads in that position become a lot less prominent which will surely affect click-through rates. So I expect click volumes to drop quite a bit for those ads. I’m not too concerned about the impact on Quality Score (QS) as I’m sure Google will adjust for that when assessing ad performance. But I am slightly surprised that when you scroll down the page, the ads disappear underneath the map, making ads invisible (unclickable) to users (Screenshot 3). Since this does seems to reduce the opportunity for Google to monetize search ads, I wonder if it is an oversight or an intentional feature. Then again, 3 days ago Google announced Boost (Beta) which basically enables advertiser to have paid ads on Google maps (and local results I imagine) (read more about Google Boost here: )
Until now, business listing have always been free but it seems those days will end very shortly. The big difference with Adwords is that with boost, Google will determine which search queries are relevant to your business. i.e. it’s keywordless advertising. From the Boost announcement:

“our system automatically sets up your ad campaign – figuring out the relevant keywords that will trigger your ad to appear on Google and Google Maps, and how to get the most out of the budget you allotted”

It’s a clever way to get many more advertisers on board without troubling them with the complexity of PPC campaigns. But it does beg the question of control over one’s advertising budget.

Finally, as a Google user, I’m not sure if I really needed the additional focus on local results. Local results have been appearing as part of the universal search for years, and they’ve always been more than sufficient for me. My main comment for now is that these local result aren’t necessarily that relevant. In the first screenshot my search query ‘car hire cape town’ mainly showed small local car rental companies that I don’t know neither necessarily trust. I do trust the big brands who have a global presence but they don’t appear in the local results. The same is true for my other query ‘flights sao paulo’: it returns a map and addresses of some airline related businesses but what I’m actually looking for is a website where I can book a flight. To be fair on Google, the local results did not appear when I modified my query slightly to say ‘flights to sao paulo’ but I guess the lesson here is that just because I enter a location, I don’t necessarily want a local result.

As per usual, we’ll measure the quantitative impact of these changes over the coming weeks and report on the effects on paid search campaigns once we have more data.

Fig. 1: Site links on organic results

So at first sight, it seems like a good idea for Google to implement the same feature on Sponsored Links because it adds value and relevance to the user. But could there be other motives behind Google’s action?

The first thing to point out is that in reality, Google (currently) only seems to display site links on ads with a very high Adrank, which basically means ads linked to brand (or trademark) keywords. Now there has been a lively debate in the search marketing world over whether or not one should bid on one’s own trademark. After all, why would you spend money on clicks that would find you in the (free) organic results anyway? That is a valid argument but unfortunately it is also a bit naïve. As Fig. 2 shows, if you don’t bid on your brand, someone else eventually will and no matter how good your organic rankings, you will lose clients to your competitors. Cause the truth is, Google does not make any money from organic results and if possible they will try to put a sponsored link above the organic results. Your competitor doesn’t even have to bid on your brand, Adwords’ Expanded Broad Matching might automatically match your competitor’s brand to yours. (Example: Google will match the keyword ‘Avis’ ,broad, to a user searching for ‘Hertz’ – i.e. without Avis actively bidding on the Hertz keyword). Have a proper look at your search query reports and you would be surprised at how frequently this occurs.

Fig. 2: Competitors reducing the effect of organic site links

With the site links feature, Google provides a trademark owner the ability to appear more prominently on the SERPs but only if they choose to bid on their trademarked keywords. If we look at fig. 3 it is obvious that site links make a sponsored link appear more prominent for a trademark owner, even as the organic results are being pushed lower down the page.

Fig. 3

This post is based on qualitative observations on popular brand that does not belong (or is related) to our client portfolio but we have quantitative data to back up our theories (more on that in a next post). Unlike in the organic results, site links are not only intended to increase user relevance, but also to increase Google’s revenue by making the competition for prime SERPs advertising space more fierce. Organic (free) listings are being pushed lower down the page, forcing lower ranking websites to start paying for more prominent sponsored listings. For trademark owners site links provide a competitive advantage but at the bottom of the ladder we suspect that competition and click prices will increase.

In a next post, we’ll take a more detailed look at the impact of site links on a campaign’s performance based upon our experience of the last few months.