When it comes to generating local leads, Google search engines can be a company’s best friend or worst enemy. 4 in 5 consumers use search engines to find local information. That must mean if you invest in online advertisements, it can automatically convert more local users into customers, right? Wrong.
Most users performing high-intent searches on Google have probably already made up their minds about two things–they are interested in a product or service your business offers and they are exclusively interested in finding it in your service area. Still, there’s no guarantee they will choose your business in a sea of other competing advertisements that may be stealing the spotlight.
Learn more about the differences between Local Services Ads, that use the pay-per-lead model, and pay-per-click. Once you’ve gained a better understanding on how each one works, you can master the art of increasing your company’s online visibility locally and nationally.
What are Local Services Ads?
Google Local Services Ads are digital advertisements that appear in search results when a potential customer in your area conducts a keyword search for relevant products or services. Advertisements will appear for local services and are typically the first ads a user comes in contact with. They can be displayed in several places such as at the top of search results, above organic results, and even above pay-per-click Google Ads.
Types of Local Services Ads
Google Screened Ads – These are local pay-per-lead advertisements that come from a business that has successfully passed a Google screening.
Google Guaranteed Ads – These are pay-per-lead advertisements that come from a business that has successfully passed a Google Guarantee screening from a Google background check partner. Google Guaranteed Ads are the only LSAs that are backed by Google.
What are Pay-Per-Click Ads?
Pay-per-click ads are displayed when a user performs a keyword search that is relevant to your product or service. Advertisers must pay a publisher each time one of your ads are clicked – regardless if they convert or not. Unlike pay-per-lead ads that are powered by proximity, PPC ads leverage keywords to determine what type of ad will be served during a user’s search.
Types of PPC Ads
Google Ads is one of the most popular types of pay-per-click advertisements used by marketers and advertisers today. This could possibly be due to the variety of PPC ads to choose from.
Below are several types of PPC ad types available and how they work:
Social Ads – This is the most common type of PPC ad. Social ads employ an auction system to determine where each ad will rank in the results section. They are located above and below the organic search results in Google.
Display Ads – This form of pay-per-click advertisement is powered by user interest. Based on information generated from previous searches, advertisements are served to them as they browse the web. Display ads typically have a lower click price than search ads.
Shopping Ads – These ads appear in search engines and contain a title, description, price and an image of the products offered by your business. Given shopping ads are product-driven and not service-based, they are typically preferred by ecommerce businesses.
Instream Ads – These ads can appear before, during, and after a video that is being played. Instream ads can be found in videos on platforms like YouTube, or Facebook.
Gmail Sponsored Ads – These ads are displayed in your Gmail inbox and resemble regular emails. They can be created using Google Ads.
Remarketing Ads – These ads use third-party cookies to serve ads to users who have visited a website prior. Given these are individuals who have already expressed interest in your products or services, remarketing ads help your business remain top-of-mind until these users are ready to convert.
Quality of Leads
Pay-per-click and pay-per-lead are similar in many ways. For starters, both generally have decent lead quality. However, only one of these methods has a system in place that caters to assuring that leads received are relevant to your business, so it won’t impact your bottom line.
Local Services Ads only charge a business for valid leads, or leads that meet the criteria necessary to be considered potential customers. Unlike PPC ads that consider any user that clicks your ad to be a lead, LSAs enable your business to determine what a quality lead is and what it isn’t.
In the case of LSAs, leads that are not in search of local services or that do not live locally will not be considered qualified leads. Once a business reviews its leads and discovers that one or more do not meet the requirements of a valid lead, it can dispute these and possibly receive a credit to its account.
This process changes the game for local businesses everywhere. Not only can you target the right customers at the right place and time, but you also have the freedom to identify which leads are actually worth paying for.
In order to properly calculate your return on investment (ROI), the expenses your business originally allocated must be considered to determine if your efforts were cost-effective.
The average cost of PPC is between $9,000-$10,000 per month. There are several fees that are included in this amount such as a management fee (if you hired a PPC agency to handle it for you) and the cost-per-click (CPC).
To get the most out of Local Services Ads, it is recommended to join the Google Guarantee program and once admitted, this will cost you $50 a month or $600 annually. In addition, LSAs require businesses to pay per valid lead received, which can range anywhere from $6 – $30 per lead.
Pay-Per-Lead vs. Pay-Per-Click
We’ve discussed both, pay-per-lead and pay-per-click, but now it’s time to see how the two models compare to one another. Get a good look at our comparison chart below and see for yourself.
Lead verification system
Overall, LSAs are easier to manage than PPC ads. If you are familiar with the world of PPC, it can take a few days or even weeks to set up. However, if you lack experience with PPC campaigns, setting it up can be a major learning curve.
Unlike PPC, the Local Services Ads requires less experience and due to its small but mighty options, it can be rather intuitive.
One of the biggest differences between the two is the use of keywords. While Local Services Ads generates the keywords for your advertisement, PPC ads allow the user to add in their own desired keywords. This is especially helpful for businesses looking to target long-tail keywords, which generally make up a majority of a company’s keyword searches.
Both models have their own unique analytics that a user can review to determine the success of their advertisements. However, when it comes to analytics, PPC offers a wide range of metrics that LSAs do not.
The ability to have greater control over your advertisements also provides an opportunity to optimize your campaigns with the data received and improve results. If this is a must-have for your business, PPC ads would be your best choice.
When to Use One Over The Other
Which would you say is the most important to your business – a click or a lead? It sounds like an easy answer, but the decision isn’t as simple as it seems. The beauty of running PPC ads using something like Google Ads is that it can drive users to a destination to measure their interest and gain valuable information from this interaction that can be used to improve conversions.
However, Local Services Ads can increase exposure by targeting local users and following them throughout their journey to becoming leads.
In other words, these two models can have immense benefits when used together and should not be seen as interchangeable, but instead, perceived as two powerful tools that should be included in your marketing arsenal, and used on a situational basis.
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