5. Local Pay Per Click on Google and Overture

by Dr. Ralph F. Wilson, E-Commerce Consultant
Web Marketing Today Premium, Issue 86, Winter 2005 Since more people are searching for local businesses and services, PPC ads on Google and Overture that include local place names can new business leads. Google now offers geotargeting for ads based on IP address and place names in the search keywords used. Chapter explains how to approach this and examples of results for various businesses. It also considers Pay Per Call approaches.

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People search for professionals and specialists online, such as dentists, plastic surgeons, attorneys, etc.

One of the most promising forms of advertising for local businesses is to use small Pay Per Click (PPC) text ads from Google AdWords (https://adwords.google.com) or Overture (www.wilsonweb.com/afd/overture.htm), and in some cases, CitySearch (www.wilsonweb.com/afd/citysearch.htm).

PPC ads usually show up to the right side (or above) search results on the major search engines and on some other content-rich sites. When a searcher enters a search keyword, ads programmed to that keyword will show up. The price of an ad depends upon how much you and other bidders for a particular keyword are willing to pay -- from 10˘ a click up to $50 per click or more. Fortunately, you only pay when someone is interested enough to click on your ad, not for the times the ad is visible.

A Different PPC Strategy

A great deal has been written about using PPC text ads for national ad campaigns. The most helpful book I've found on the subject is Andrew Goodman's Google AdWords Handbook: 21 Ways to Maximize Results (2004 Edition) (www.wilsonweb.com/afd/pagezero.htm). Generally, successful companies don't generally purchase PPC ads for the obvious high-traffic and high-priced keywords for their category. Rather they purchase PPC ads for literally hundreds of less-used keyword phrases, each of which brings a tiny amount of traffic at a low cost of little more than 10˘ per click.

However, the way you conduct a local PPC campaign is somewhat different than conducting a national campaign for two reasons:

1. Localized keywords are usually much less expensive. For example on Overture, "Miami life insurance" might be $3.20 to $4.60 for the top positions, while "life insurance" by itself might be $7.61 to $8.09. (However, "Los Angeles plastic surgeon" is more expensive than "plastic surgeon," since this is a kind of service that must be delivered locally.)
2. Less common localized keyword phrases get many fewer clicks, so few, in fact, that Google and Overture may not consider them worthwhile and drop the listing.

Thus the preferred strategy shifts towards fewer keywords rather than many keywords (except, perhaps, when using Google's geotargeting feature). For example, for a plastic surgeon in Los Angeles you might use a basic set of keywords such as:

• plastic surgery
• cosmetic surgery
• liposuction
• breast augmentation
• rhinoplasty
• facelift
• tummy tuck

Then each of these words would be combined with names of communities in the Los Angeles area, especially the more affluent communities, such as:

• Los Angeles
• Westwood
• Studio City
• Newport Beach
• Encino
• Tarzana
• Woodland Hills
• Beverly Hills
• Brentwood
• Malibu

Thus, when someone searches for "Encino tummy tuck," the plastic surgeon's ad will appear.

Variable PPC Prices according to Location

I was interested in seeing what the search market looked like in some western cities. I used two tools:

• Overture Keyword Selector. Shows the number of searches in the past month on Overture's network for a particular keyword. http://inventory.overture.com/d/searchinventory/suggestion/
• Overture Bid Tool. Shows the bid prices for keywords on Overture.
  http://uv.bidtool.overture.com/d/search/tools/bidtool/

The table below shows for "dentist Los Angeles" and other grid points the number of searches in December 2004 on the first line and the maximum bid prices for the first four positions on the second line. Note: Top bidders don't pay their maximum bid but 1˘ above the second place bidder.

keywords	Los Angeles	Sacramento	Denver	Seattle
dentist	12935 $15.72 to $37.18	2755 22˘ to 51˘	2514 42˘ to $1.96	4597 $4.01 to $10.01
cosmetic dentist	1271 $10.85 to $37.03	119 75˘ to $2.54	583 84˘ to $2.95	562 $7.01 to $15.01
dentist implant	291 80˘ to $25	47 5˘ to 14˘	130 15˘ to 21˘	69 5˘ to 11˘
BMW	1764 70˘ to 78˘	404 61˘ to 76˘	294 32˘ to 69˘	1285 11˘ to 39˘
BMW dealer	1936 12˘ to 42˘	170 45˘ to 58˘	314 45˘ to 47˘	408 45˘ to 46˘

You can see that the Los Angeles market is quite competitive for "dentist" and "cosmetic dentist" compared to Denver and Sacramento. Perhaps dentists in Denver and Sacramento just haven't discovered the opportunity.

Yahoo! Local Match

You can purchase PPC ads on Yahoo! making your own keyword and place name combinations. In these cases click-throughs would go to your own website.

However, Yahoo! has another PPC approach they call Local Match (http://www.wilsonweb.com/afd/localmatch.htm) which appears on Yahoo!, Alta Vista, AlltheWeb, InfoSpace, Citysearch, and other popular Web sites. Essentially, you select a geographic area (.05 to 100-mile radius) around your business for which you want your ads to appear. Yahoo matches the area with appropriate place names. When one of those place names is searched along with your keywords, your listing appears. When a customer clicks on it, your Yahoo-hosted "Locator Page" appears showing a locator map plus information you have written to describe your business and website URL. This approach can even work for businesses without a website. Yahoo! Local Match has an online, self-service sign-up for businesses with smaller budgets as well as Fast Track service via a toll-free number which provides expert help and faster approval for those with larger budgets.

Note: For a limited time Yahoo! Local Match is offering a $20 sign-up bonus for local businesses. (http://www.wilsonweb.com/afd/localmatch.htm). This is a special offer in conjunction with Overture to benefit my readers and is not available on Yahoo's site unless you go through the link given here.

Google AdWords Geotargeting

But there's another way you can take advantage of PPC ads using IP address geotargeting. Google offers geotargeting at present, but it is expected soon for Overture.

Google is able to detect the location of the person using a search engine. Every computer connected to the Internet has a different IP (Internet Protocol) address (such as 123.123.123.123). This IP address is usually assigned to your Internet Service Provider (ISP) according to your local area. Armed with a list of IP address blocks and their localities, Google can usually determine the locality of the search -- and show a dentist shopper ads that are specific to her locality.

There are some exceptions to this, of course. The IP blocks assigned to America Online tend to show the locality as Vienna, Virginia, though hopefully this will be corrected.

With geotargeting by IP address, you can opt to show your ads to only people in your own community. This way all people who click on your ad will be qualified by proximity to your business. Perhaps you sell "life insurance" to people in the Sacramento area. You'll pay a fairly high price for the keyphrase "life insurance," but you can configure your ad to be shown only to people within a certain locality, thus keeping your customer acquisition cost within your budget.

For example, you could select:

• All the searchers in California
• All the searchers in the Sacramento - Stockton - Modesto area
• All the searchers in specific cities -- you can list all the cities in your local area, country, etc.
• Custom targeting, defining a circle of 20 miles (more or less) using either your address or latitude and longitude coordinates for the center of the circle.

The first step in using Google's geotargeting feature is to select a language and then (1) global or nationwide, (2) regions and cities, or (3) customized, that is within a specific geographic area.

If you select Regions and Cities you will be shown a screen to select your country and metropolitan area. Alternatively, you can type in a series of city-state combinations to define your ad coverage.

If you select Customized targeting, you can define a radius around your location, or define a non-circular area by means of entering a series of coordinates.

The smaller the area you define, the fewer leads your ad will generate, so you may want to experiment with how large an area to target.

Some banner ad networks, such as Advertising.com, also offer geotargeting by IP address. An ad agency should be able to locate other networks for you, though banner ads aren't usually as effective for direct response advertising as text ads in search engines.

PPC Campaign Examples

Recently, I asked ReachLocal (www.wilsonweb.com/afd/reachlocal.htm), a firm specializing in helping local businesses advertise on the Internet, to give me an idea of the effectiveness of a local advertising campaign. Here are some of their results.

A plastic surgeon in a mid-size city in North Louisiana was very skeptical of online marketing and doubted that it would really benefit his local practice. However, after the first 30 days of his online campaign, he had received over 196 visits to his website and 19 calls to his practice for questions or consultations. He booked four procedures from his campaigns which paid for the advertising many times over. The doctor’s cost per lead was $2.79. He says, "In the first two months, I have seen my Internet traffic increase by 100% and I have attracted several new referrals. Your program has surpassed any online marketing solution I have used in the last few years, and -- outside of word-of mouth -- online marketing is now the most important form of advertising in my field."

Here are some other examples.

Carpet Cleaning Company, Atlanta Georgia. They began with an initial budget of $250 for 20 days. From that they recorded 143 website visits, received 28 phone calls, and sold 13 jobs at average of $273 per job. New sales revenue for the 20 days was $3,549.

Heating and Air Conditioning Company, Los Angeles CA. For an initial budget of $1,000 for 60 days, they received 112 phone calls and logged 34 coupon redemptions, resulting in $24,000 of business from this new customer base. Subsequently they increased their monthly budget to $2,250 per month.

BMW Dealership, Los Angeles CA. An initial campaign of $1,000 for 43 days resulted in 224 phone calls, 34 requests for test drives, and generated $15,000 in net profit for dealership. They subsequently increased the monthly budget to $2,000 per month.

Dentist, Atlanta, Georgia. He began with a $500 per month campaign, which resulted in 215 site visits and 34 phone calls. He increased his budget to $600 per month.

Of course, not all businesses will get results as good as these. But since people are now searching for businesses and services via the Internet, the promise of new business at reasonable prices via the Internet is growing. Incidentally, if you're looking for an organization that will do the local PPC ad placements for you and manage the campaign, whether you're an advertiser or an agency, consider ReachLocal.

Pay Per Call Lead Generation

One approach that may suit some kinds of businesses is a Pay Per Call approach to lead generation pioneered by Ingenio.com.

Pay Per Call works similarly to click-based advertising, except that it drives phone leads to advertisers, rather than clicks to advertiser websites. Like click-based advertising, Ingenio Pay Per Call enables merchants to (1) easily sign up as advertisers and create online ads, (2) bid by category to get prominence in search results, and (3) manage budgets and accounts using a secure account manager.

On a more practical level, Pay Per Call works like this: An online consumer searches for a merchant or service provider in a designated area, and relevant Pay Per Call ads appear in search results. The consumer then calls an advertiser's business using the phone number in the ad provided by Ingenio. This number connects the consumer directly with the advertiser, while Ingenio tracks the call for billing and reporting purposes. For each call that comes to an advertiser this way, the advertiser pays an amount they bid in advance.

We're just seeing pay for performance approaches come to into their own in local Internet advertising. The results could be dramatic for your business.

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Other articles from Web Marketing Today Premium, Issue 86, Winter 2005