Google Places and the readiness of the local advertising market

By September 13, 2010Advertising

This is old news now, but back in April Google announced the launch of Google Places, or more accurately they announced the renaming of ‘Local Business Center’ to ‘Google Places’.

Google Places is a freemium offering.  The free part includes some pretty powerful self serve products for small local businesses:

  • Claim your own Google Places Page which will then show up in queries on Google and Google Maps, including on mobile devices
  • Upload photos of your business
  • Customised QR codes that are scannable from mobiles

The paid part is a $25 per month service which “makes listings stand out on Google.com and Google Maps with Tags”.  (Tags are little yellow markers designed to look like baggage tags which appear next to the red circle markers which denote the location of businesses on Google Maps.  If you haven’t seen one it is because the service is only available in selected US cities.)

A lot of people think Google Places is pretty cool – e.g. the authors of these two blog posts, both written in the last 24 hours.  This review on Techcrunch written back in April is more neutral, although it does bemoan the lack of integration with social media.  Update The absence of a review aggregation service is also a weakness in my view, although I would guess Google will fix that before too long.

I have been thinking a lot about local recently and it seems to me that powerful as these services are they are not what most local businesses need today.  I think Google is significantly ahead of the market here and the requirement is for services that are simpler to use and understand.

Traditionally the local advertising market has been dominated by Yellow Pages style print directories and local businesses have grown up with their very simple proposition – pay once a year, sit back and wait for the phone to ring.  I suspect the leap from there to claim your Google Places page, decide what to write on it and how to use it is too big a jump for most local service providers.

They would rather have their hands held with an intermediate step onto the internet which involves less of a jump into the unknown.  This is the approach Yell and many others are taking with services to help SMEs build websites and drive traffic, call tracking services, and lead gen services.  All of these are, I think, offer better value for money than traditional print media (particularly those which charge on a Cost-Per-Action (CPA) basis) are simpler to get to grips with and offer a greater certainty of outcome than Google Places.

That is my emerging conclusion anyway.  I’m interested to know whether you agree.

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  • Hi Nic,

    I live in Devon and have met dozens of materially successful small business owners/entrepreneurs down here as a result of the school our kids attend. We’re looking at the 35-65 range in the South Hams/English Riviera/Dartmoor area working in varied industries from tourism/leisure to oil. Many have re-located from London, all are savvy. However, few realise that Google makes its money from the little ads at the top and side. I haven’t met one who wants to spend more time in front of a screen marketing their business through tools they don’t understand (mostly a look of horror descends). Most want someone else to do it, but when they do contract someone else to do it, they think they’re being taken for a ride by their SEO/web people.

    There’s a serious disconnect going on and watching the Google Instant presentation the other day one can only assume it’ll get worse. Clearly an opportunity as well for people looking to get into this type of service industry 🙂

  • Thanks James. I agree there is an opportunity for someone to build a trusted service to help local SMEs get the best out of the web. There are still too many cowboys.

  • Nic, I completely agree that the social element is completely missing in Places (curious to see that FB and Google used the same name for different services…) and I’m curious to understand what you have in mind when you say “The absence of a review aggregation service is also a weakness in my view”… I’m asking mostly because lately I’ve been thinking about ways of using the vast amount of reviews available to build something useful and also because there are some reviews aggregated from other sites (eg http://bit.ly/bQEfmv for my fave London restaurant), so I thought you’d like something different / more social?

  • Hi Nic, yes I agree with your view that a CPA approach works well for the end users. The challenge I see is for the directory-type companies that attempt to deliver against this, and how they can forecast their earnings easily. I see the advantage of the traditional ‘pay-for-the-year’ approach is that the money is in the bank from the offset, whereas the CPA approach means a cost to set-up and careful thought as to what the metrics are that you charge for. I see that you need scalability in this area (ie. lots of clients on your books) in order to ensure that you are not impacted by poor performance of one (or several) of them.

    What’s your thoughts?

    Mark.

  • Hi Mark – you make a good point that transitioning to a normal CPA model will hit cash flow and predictability for directories businesses, which might slow them down. That said, at least some of them are trying to sell fixed price packages with a guaranteed performance element which should help them a little (i.e. they take the risk on how much they need to spend on Google to deliver a pre-agreed number of clicks).

    These models are all about large numbers of customers – as much because they each pay only a small amount and you need lots to have an interesting business as anything else.

    Best,
    Nic

  • Hi Fabio – I expected to find review aggregation on Places, but when I looked yesterday there I didn’t see it on the web and couldn’t find any mention of it in the announcements, so I erroneously assumed it wasn’t there.

    Thanks for correcting me.

    I will update the post.

  • We really like this post Nic and agree in many of your points. It touches on our own experiences in launching our flagship local London site http://kingsroad.co.uk which is run using our Media Street web application.

    Local businesses don’t have deep pockets and we’ve had to tweak our business model to offer them a package of online marketing services.

    We also like your point about review aggregation on business pages as this is valued by the visitor / reader. Review sites like Yelp and Qype’s API can offer real value here to the local media owner.

  • Interesting stuff… and the possible need for a ‘half-way’ house for SMEs en route to the Promised Land of Google Places…

    We’ve been doing that for a while now; simple, self-serve advertising that is very much akin to ‘placing a postcard in the window of your local Post Office…’

    For a fiver a week; a tenner a month. Automated via PayPal. Simples…

    So, James, if you’re looking for some simple ad slots across Devon… why not try http://www.peoplesrepublicofsouthdevon.co.uk ?

    Or, indeed, any one of these slots on our Devon network…

    http://www.addiply.com/index.php?option=com_addiply&Itemid=69&r1=1&r2=79

    There are the numbers, the traffic, the price… three clicks later and you’re advertising to a Devon audience… and no ad agency/SEO house to demand a third party cost.

    Simple.

    As hopefully the good folk of Edinburgh will come to appreciate… http://www.guardian.co.uk/edinburgh/

    That would be my fear; that Google’s compexity en route to us all camping at their ‘Places’ may put many off…

    http://rickwaghorn.co.uk/

    best etc

  • V interesting post.

    We’ve been doing simples for a while now… James might be interested in the network we’ve built with Lee out of http://www.peoplesrepublicofsouthdevon.co.uk

    http://www.addiply.com/index.php?option=com_addiply&Itemid=69&r1=1&r2=79

    There’s the traffic, there’s the price and there’s the button to advertise…

    No CPA, no huge complexities.. it’s just a fiver a week, a tenner a month, pennies per click… and it probably doesn’t need either an ad agency or an SEO to intervene… you can place that ad yourself; right in front of that Devon arts community… just as you would place an ad in your local Post Office yourself…

    For me – hopefully – it might offer the kind of simple, ‘halfway house’ approach as local SMEs the world over try to navigate their way online before reaching the ‘Promised Land’ of Google Places.

    Whether the launch of Google Instant merely adds to the minefield is another moot point; it makes everyone’s life more complex… Me? I’ve always been a big fan of simplicity.

    http://rickwaghorn.co.uk/2010/09/12/aspiring-to-be-the-third-half-of-our-brain-suggests-google-have-their-heart-set-on-new-complexities-be-wary-shirky-might-warn/

    best etc

  • Thanks Rick. Addiply looks like an interesting play.

  • Thanks Jonathan. It seems like everyone is in violent agreement. Simple is best.

  • Jack Rutter

    Hi Nick,

    Really liked your post. I’m also working on http://kingsroad.co.uk to prove the case for our Media Street technology platform.

    After several different attempts at engaging local businesses with our products we have found that packaging them together as services charged for on an annual basis works far better than trying to sell each one by one.

  • Thanks Jack

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