The world of digital marketing is ever-growing and expanding. You can use many services, tools, tactics, and strategies to increase your reach, gain leads, and a solid customer base. One such strategy is a newly introduced auction-based pricing for local service advertisers. On October 8th, Google introduced bidding on local services ads for select companies, with a spokesperson stating, “We believe this model will help bring more customers to this trusted group of advertisers.” The pros at VitalStorm know that service provides like you must have many questions about this new advertising strategy. Below are some important details you should know about this auction-based pricing model!

A Review of Local Service Advertising

Before we get started with the newly introduced bidding on local services, it’s important you know the basics of local service advertising. Local Service Advertising was introduced by Google to allow specifically home service providers like electricians, HVAC technicians, etc. to market their businesses digitally. While many ads are pay-per-click, LSAs are pay-per-lead, meaning you must only pay once your ad gets you a lead. To get started in local service advertising, you must be eligible—LSAs cover specific industries, and you might not be providing services in an industry that LSAs have covered yet. You must also submit documentation that you’re a trustworthy company. You might have to include background checks, insurance certification, and your professional business license number. This will give you your “Google Guaranteed” or “Google Screened” signal.

The Google algorithm plays a specific role in local advertising, and many factors can increase your business’s ranking:

  1. Proximity – When a customer searches something like “Electrician near me,” proximity is key in the results they get. The closer your business is the higher its ranking in potential customer’s search results.
  2. Reviews – We cannot understate how important positive reviews and number of reviews are for your company and its LSA ranking. The algorithm considers how many reviews you have, overall review score and its comparison to your competitors.
  3. Responsiveness – If you have been responsive to customer inquiries and requests on the platform, you will have a higher ranking.

These are some of the most common factors that play a role in your LSA’s ranking. However, with the newly introduced auction-pricing model, your bid will be an important factor in your LSA’s ranking. We will get into the details below.

How Does Bidding on Local Service Ads Work?

Since Google very recently introduced this, we still have limited information about it. However, we know that potential advertisers who use this model will be notified of their eligibility. As mentioned by the Google spokesperson, a certain number of “trusted” advertisers will be eligible. Those who are eligible don’t have to participate, but if they would like to, they will have to be “Google Guaranteed” or “Google Screened.”

Under this new model, Google will ask you how you want to set your bid, which is the amount you would pay the most for a lead. Here, you will get two options: You can either choose to set a maximum bid per lead or allow Google to set your bid. Maximum bid per lead is the maximum price advertisers are willing to pay for a lead. This is not necessarily what you will pay, as the average cost per lead will be determined through the auction pricing format. The second option, which allows Google to set your bid, is also called the “maximizing leads” option—if you choose this, you will set a maximum weekly budget. Google will optimize your bids while maximizing your leads within your budget.

How Can Bidding be Good for Your Local Service Advertising?

Many users use local service advertising, and while it is a great digital marketing strategy, it’s understandable to feel like you’re not in complete control of your advertising tactics. The Google algorithm determines your local service advertising based on many factors, and it takes some time to get it right. This new auction-based pricing model gives advertisers greater control of their digital marketing campaign and allows them to pay more for leads if they would like to. However, keep in mind that while this gives you more control of your advertising strategy, it will also increase competition.

Be Smart About Your LSAs and Bids

If you are interested in trying out this new auction-pricing model, be sure to consult a digital marketing expert before you do so. Make sure you already have a good handle on local service advertising in the first place and understand the many ways you can generate leads for your company. Use analytics tools to track ads, try out several bid types and amounts, and make any changes accordingly. Consider your budget, marketing needs, and demographics and consistently analyze sales data to understand what works best. While you might think it’s a good idea to start bidding immediately, it’s smarter to take a step back and do your research first. Also, don’t forget about other factors that can increase your LSA ranking. Make sure you are accessible to those near you, generate good reviews, and are responsive to your customers online, in-person, and on your phone.

 Contact VitalStorm for More Information!

Curious about how you should be applying Google LSA to your digital marketing strategy? Give us a call for a 15-minute assessment! We imagine you have many questions about this new bidding model—our team of professionals will be more than happy to answer all your questions and assist you. We’ve got you covered from organic to paid search, social media marketing, website design, and even call center coaching. We are passionate about helping our clients grow their business and providing the best digital marketing plans and local search strategies. You can call us at 877-311-5695 or check out our website.