Is Place Search Costing Google Revenue?

Author: Mike Hagley

Over the past week if you’ve carried out a search for a local business or service you may have noticed some changes.  It’s called Place Search, and it’s an interesting move by Google – interesting for a number of reasons.

Place Search example: new map preview location

The map preview uses advertising space

Previously, Google would show ‘Local business results’ (and map) within the organic search results.  Now, with Place Search, Google has moved the map preview to the right hand side of the page, chewing up a massive piece of advertising real estate.  The map even follows you as you scroll down the page, covering the ads, showing AdWords advertisers even less respect:

Google Place Search example: scrolling map feature

Place page results combined with organic results

As well as a new location for the map preview, Google has added a number of new formats for serving Places listings.  One particular design combines a business’ Place page result with its organic result (along with an image) almost doubling the size of a regular organic result.

Why implement Place Search if it could lead to a reduction in AdWords revenue?

Possibly the answer lies in the rise in the usage of mobile devices for both web searching and social networking applications like Gowalla, Foursquare and Facebook’s newest add-on, Places.  Earlier this year, Google reported a 500% increase in mobile search from 2008 until EOY 2009, and an alarming 50M Google Maps for Mobile users.

If we look at a mobile search result, the first two listings are advertising, followed immediately by the Place page results (image 1 below).  Notice that the Place page results are positioned above the organic results.  Conducting this same search on a PC has different results, and it seems that Google are giving a higher weighting to Place results on mobiles than on PC based queries.

Mobile Place Search example

OK, but how will Google make up for the lost AdWords revenue you ask?  The next innovation in Google advertising…

Boost Ads

Searchengineland explains Google Boost Ads as ‘automated AdWords for small business’.  Boost Ads are a paid search ad for your Place Page, and it’s currently being testing in a select few cities in the USA.  Businesses will be able to set a monthly budget and Google will automatically select which keywords for which your ad is shown.  Boost Ads will be shown alongside AdWords ads, and are clearly targeted to the small business that isn’t currently advertising on Google.

Example of a Boost Ad

So while Google may be losing advertising revenue with Place Search in the interim, I believe it’s a smart move to promote Google Places to small businesses, making it very easy for them to sign up for Boost Ads once available in all locations.