How to place effective local business ads

by on November 4, 2012

Local business ads managed by Yellow Pages apparently offer a lower cost-per-call than Google AdWords campaigns, based on a recent report. However, do not close your Google advertising account yet. Let’s look further, and dip into the details.

Meeting Local Businesses Goals
There are multiple ways to generate online leads, including placing ads in search results, and on directory or local or theme websites. The dilemma for most business owners is deciding which types of online advertising deliver leads that are effective and in sufficient volume.

Yellow Pages ads for local businesses

YP: Ads appear at top of the page (in blue)

Besides local business owners wanting to control spending on advertising, a common goal is also generating more leads via phone calls because serious prospects tend to call for information and quotes before making purchases. It is this angle that the study evaluated in January, 2012.

Two big players were involved: an online telephone directory, Yellow Pages using its Platinum Listings program, and the search engine company, Google using AdWords campaigns. Fifty-six local businesses were allotted a fixed advertising allowance of $1,000 to cover subscriptions to both services and were followed for one month by Altman Vilandrie & Company (funded by AT&T Ad Solutions, now Yellow Pages).


Google: Ads appear at top (cream) and in the right column

Lower Cost by Almost Half
Results show that 77% of the time Yellow Pages yielded a better value, since its cost-per-call was almost half that of Google ads. Additionally, they found that the advertising costs of Yellow Pages were more predictable, meaning its ads had narrower price variances than Google ads.

For businesses who paid more per call with Yellow Pages, the costs between its ads still varied less than Google ads (meaning, closer to break-even), than those who paid more for Google’s ads.

Finally, seventeen of the twenty business categories (dentist, electricians, florists, etc.) reported a better value using Yellow Pages. However, these results were not statistically significant because some of the categories included only two local businesses.

Two Important Caveats
While the report put a spotlight on the effectiveness of ad services using a cost-per-call metric, it also hinted at differences in their abilities to generate call volumes for their advertisers.

First, this study did not determine what ROI a local business might expect. It did not even attempt to measure an ROI – which requires tracking phone calls by prospect and tallying their subsequent purchases with each advertiser.

Second, running a Yellow Pages campaign will not likely generate sufficient call volume for a business to meet its revenue goals.

After reviewing some Yellow Page ad accounts, I found similar evidence, since many of its targeted keywords have low volumes, hence, use less expensive keywords. For example, ‘dentist (my town)’ has a higher search volume and is known to signal more buying intent, as compared to ‘dental implants in (my town, state)’. The first is of higher quality and volume which attracts more competition, so ads using it naturally cost more.

A Strategy to Consider
Some local businesses can benefit by using Google ads for generating higher call volumes, although more expensive, and then supplementing them with Yellow Pages ads that deliver lower cost calls. This strategy balances greater exposure with others at lower cost, hopefully bringing more interested prospects overall.

What experiences has your business experienced using any type of online local business ads? (Type your response in the comment box below.)

Related post: Online directories combine to survive

Leave a Comment

Previous post:

Next post: