Overture Launches Local Match Listings Program

Overture launched a new Local Match program today to allow its advertisers in the United States to more easily target listings toward those with a local interest.

Overture’s local program differs in two key ways from the local advertising program competitor Google launched last October. Local ads at Overture are targeted to geographic terms, rather than searcher location. Local ads also are sold through a separate listing program at Overture, rather than being an alteration to its main paid listings system.

Targeting By Keyword Automatically

With Google’s AdWords regional targeting program, ads can be targeted to appear only in front of those who are searching from a particular location. For example, a dental office in San Francisco might want its ad for the word “dentists” to appear only in front of searchers who live in San Francisco. Google’s program allows this, at least in the many cases when Google can accurately detect a searcher’s location.

In contrast, Overture’s program relies on search terms, rather than searcher location, to do targeting. That dental practice in San Francisco can have its ads show up in response to terms that are geographically related to its physical location, such as “san francisco dentists” or “daly city dentists.”

Targeting ads by using geographic terms like this isn’t new. Both Overture and Google have long allowed it. However, the new Overture program is designed to greatly ease the process. Instead of brainstorming every possible geographic modifier to use, an advertiser at Overture merely need enter their physical location and a geographic radius they wish to cover ranging from 0.5 to 100 miles. Then behind the scenes, Overture will automatically add relevant geographical locations.

For instance, that San Francisco dental practice using Overture’s regular listing program might think to bid on terms such as “san francisco dentists” and “daly city dentists” but overlook other geographically relevant terms like “sunset district dentists” or “brisbane dentists.” The Overture program is meant to solve this. Through it, the practice would bid on the term “dentists,” set a geographic radius, and any relevant geographic terms would be automatically pulled from a mapping database and added to the word dentist to help the ad show up for a wide range of phrases.

Separate Program From Regular Listings

Overture’s regular paid listing program is Precision Match, where advertisers bid against each other for top placement in sponsored results that Overture distributes (see chart) to parent company Yahoo or partners such as MSN.

Local Match operates separately from Precision Match. This means that potentially, some Overture partners may choose to show only local listings. However, those I’ve looked so far appear to be choosing to intermingle local match listings within the regular listings that they carry.

To date, partners taking local ads have been named as Yahoo, Yahoo-owned AltaVista and AllTheWeb, InfoSpace (which operates many popular meta search engines such as Dogpile) and Citysearch. Overture also told me a few other partners such as ESPN.com and 411web are also carrying them now and that MSN is to add them in the coming weeks.

You’ll know an ad is locally targeted after you click on it. Regular Overture ads lead directly to an advertiser’s web site. Overture’s local ads instead lead to an intermediary “locator” page. This page can show a map, business name, physical location, hours of operation and a link to the advertiser’s own web site, if they have one, along with other information. An example of one is below:

The locator pages are designed in part to help small advertisers without web sites take part in Overture’s advertising program. In contrast, its regular listings assume advertisers have their own web sites.

Some advertisers may not want locator pages, of course. Unfortunately, you can’t opt out of having them if you take part in Local Match. Overture said it wanted to provide a uniform experience for those viewing local listings, so all local advertisers must use these.

That argument makes sense for situations where only local ads are being shown in response to search queries. However, most cases right now will have local ads mixed within regular ones. This means there will be no uniform experience. Sometimes people may get a locator page, while in many other cases, they’ll simply go directly to web sites.

Should advertisers object to locator pages, there’s the possibility that Overture might change allow an opt-out over time.

“We’re always listening to our advertisers for their feedback,” said Geoff Stevens, Overture’s general manager of local search. “This is really a first step in how the locator page will be presented.”

Do One Or Both?

As said, local listings and regular listings are sold through two completely different programs, yet both listings may be intermingled within a single result set. Ironically, that means understanding when and where you’ll show up, as well as for how much, has gotten more complicated by a program designed to simplify life for advertisers.

To understand, let’s return to that dental practice based in San Francisco and assume they’re running a regular listing linked to the phrase “san francisco dentist” at $2.00 per click, ranking it position seven. What happens if they also do a local listing? Where will they show up?

It depends. If the local listing is at a price higher than the regular listing, such as $2.50 per click, then the local listing will replace the regular listing in the search results. As to where it will be ranked, its position will be determined just like a regular listing.

What if the local listing is at a lower price, such as $1.50 per click? Then the regular listing at $2.00 per click will continue to show and also be ranked as normal.

In short, you’re not supposed to have both a local and a regular listing ever show at the same time. Instead, only the one you are willing to pay more for will display.

Pricing Complications

Want to be number one? The Local Match program will provide the ability to do auto-bidding with a max bid limit similar to what the regular program provides. Unfortunately, that max bid is calculated by looking at a range of terms, rather than just a specific one, as with the regular program.

For example, consider the situation with the Sponsored Results area that appears at the top of results when someone does a web search at Yahoo. This area shows the top four matches from Overture, which may now come from either the regular or local paid listing programs.

Through the regular program, to get into the top four for the phrase “san francisco dentists,” you’d currently need to bid between $6.34 to $3.45 per click.

Though the local program, you’d also need to pay between those amounts. However, you’d be paying that money for the word “dentists” linked to a geographical area around San Francisco, not for the specific phrase “san francisco dentists.” You’d still show up for that phrase, but you’d also be showing up for others.

For example, with a 30 mile radius set and a physical location in San Francisco, your ad would also be showing up for “daly city dentists.” That term is far less competitive, with the top bid being only $0.20. Nevertheless, if you’d were bidding something like $3.50 per click to do well for the San Francisco term, you’d also being bidding the same for the Daly City term and any other geographical locations within the radius you set.

Fortunately, Overture’s bid discounter should only charge one cent more than the highest bid on any term. This means that even though you are willing to pay up to $3.50 for the term “daly city dentists,” since the person below you will only pay up to $0.20, you’d only be charged $0.21 per click.

Rise In Bids?

Potentially, the new local program may start driving some of these relatively low-cost local searches upwards in price. As you can imagine, those doing regular listings for something like “daly city dentists” may up their bids, if a flood of new high-priced competition begins to flow in because of the local search program and the automation it provides.

You can see for yourself how the local program may encourage this. With an ad linked to a San Francisco address, for the word dentist and a 30 mile radius, I was told that the max bid to use to get a high ranking would be $3.05. That pretty much correct for the phrase “san francisco dentists,” but as said, it would be overkill for “daly city dentists,” which nevertheless would also be automatically targeted at that amount.

Some advertisers may also be put off on the idea of doing local listings, given that it essentially takes away the ability to control pricing based on specific geographic areas.

One solution might be to consider keeping your local bidding low. That will help ensure you aren’t accidentally driving rates up for some areas where the costs are currently low, while letting you retain control over your regular listings that are aimed at areas of key importance.

It’s also another move toward the idea that search engines want to charge for listings on the price the lead is worth to the advertiser, rather than the price that a particular term is being sold for. My past article, Overture Says Forget CPC, What’s Your ROI?, covers this more. But in short, Overture’s program is essentially asking advertisers to determine how much they think a lead is worth from a particular geographic area.

In our example, this means asking the San Francisco dental practice to bid on how much they’ll pay for someone to come into their office, regardless of how exactly that person found them through a search. Whether the search was for “daly city dentists” or “san francisco dentists,” the Overture system works to assume the lead is worth the same.

Pure Local Match Distribution

As said earlier, eventually some Overture partners may carry pure local listings. A prime candidate might be the Yahoo Yellow Pages area. Do a search there now for san francisco dentists, and you’ll find Overture listings at the bottom of the page, in the Sponsored Results area. These appear to be a blend of regular and local listings. However, pure local listings could come.

Local paid listings from Overture in the area makes even more sense for those who are logged into Yahoo. For example, I have a Yahoo account, where I’ve told Yahoo that I live in San Francisco. So if I search for dentists, and if I’m logged in, Yahoo automatically gives me results that are tailored to San Francisco even though I haven’t used the city name in my query.

These results are topped by a Sponsored Businesses area, itself headed by listings sold through Yahoo’s internal Yellow Pages program. But those that don’t show an address come from Overture, again through a blend of regular and local matches. This is another case where a pure local listings solution might be used. That could be especially helpful given that my known geographic location could be matched to the advertiser’s known geographic location.

This brings up an important point. Unlike with regular listings, it’s not just a “top bid takes all” situation with local listings. When pure local listings are displayed, Overture says these will be ranked in part based on the geographic proximity to the search requests. So if someone searches for “daly city dentists,” those dentists who physically are in Daly City will have an edge over dentists that are in the area, yet located in a neighboring city.

Physical Location Required

Overture says that anyone taking part in the program is supposed to provide a physical location for their ads. This means that many referral companies, such as national listing services, wouldn’t be able to take part unless they provide office locations for all their clients.

“We’ll look at bigger advertisers on a case by case basis. If they represent physical locations, our account management team would upload all the different providers they might represent,” Stephens said.

A search for pasadena dentists on Overture provides an example of this. Currently, 1-800-Dentist is one of the top ranked listings. The listing takes you to a search page where if you enter a street address, US ZIP code, dental need and payment method, you’ll get a list of dentists. Using Overture’s own address (it’s based in Pasadena), I got a list of three dentists.

In local match, 1-800-Dentist would need to create ads for each of these three dentists separately. The effort of doing this for some national referral companies might be too much. On the other hand, the loss of some of these referral companies might make it easier to find local businesses directly.

Want to discuss this article or share experiences and thoughts about the new Overture program? Visit this thread at the Search Engine Watch Forums: Overture Launches Local Ads.