Google confirms ads coming to Local Pack

Written by: Jason Bayless | November 10, 2016
One year after Google began to make tumultuous changes to how it displays search results and how it ranks them for mobile users, the company has revealed another significant change. The recent shift from a seven-pack of local search results to a three-pack significantly reduced the number of businesses that got extra displayed information and who would appear on the front page for mobile users, making those top three spots highly coveted. Now, Google confirms that it will be possible for ads to take those spots, not just organic results. This is a major change because previously local companies would be inclined to invest a significant amount of resources in SEO to make the top spots, but it was still open to all. Adding paid results in the Local Pack turns reaching the pack into an ad-spending arms race and changes the color of local search.
Background
While the goal of SEO is to rank as high as possible on search engine result pages, there is some real estate at the top of SERPs that is worth much more, and that is the Local Pack. The Local Pack is a box that is set apart from the result of the results in a local query. That means a search in which the user has specified the name of a city or a qualifier like “near me.” Local searches induce Google to bring local businesses to the front. The Local Pack is the epitome of this idea.
In the Local Pack, the three businesses that rank the highest for the search terms get extra benefits like additional information being showed to the user such as hours and ratings, their location on a map, buttons to navigate to them via Google Maps, and so on. Being in the Local Pack is a big advantage because the searcher gets to see a lot more about your business, which makes them more likely to visit your site or your physical location. This advantage is much larger when the person searching is using a mobile device. In that case, the small screens mean that the Local Pack is the entire first page of results. There is therefore a strong disincentive to click through to the next page, and the top three businesses who reach the Pack get a higher proportion of clicks than those outside the Pack.
Paid Ads in the Pack
One of the big concepts in local search is the idea that small local businesses can outperform big brands and rank more highly by emphasizing their local ties. Big brands can try to equalize the playing field by localizing their content, but a local brand should have a built-in advantage over a big national one. The introduction of paid ads might be a step away from that. First of all, rather than rewarding an investment in good site design, social media outreach, and other attributes, paid ads reward simply paying. That’s counter to what Google claims they want to achieve with their rankings, which is to direct searchers to the best sites.
Next, paid ads in the Pack means that big brands might be able to outmuscle small, local ones by outspending them on ads for localized content. This would be entirely counterproductive to how local search is meant to work. If big brands are still unable to keep up with small ones even if they pay more, then that just shifts the action to the small brands. These local businesses will find it necessary to outspend each other to put ads in the Pack. This takes resources that they could have spent improving their product and transfers them to Google instead.