- Google to set Auction-based pricing instead of fixed pricing for LSAs
- The final decision will depend on Beta testing results
- Importance of Local Service Ads for Advertisers
- Impact of the auction-based pricing for LSAs
Google is planning to set auction-based pricing for Local Services Ads (LSA). This will be officially decided and declared after conducting a set of tests.
Beta Testing to Decide Pricing Options:
Previously when Google launched the Local Service Ads in 2015, there was a fixed cost per lead pricing options. However, the new beta testing will have advertisers who will bid for the ad-auction. After bidding, Google will notify the advertisers if they are eligible for placing the ad. If this beta testing goes successful both for the advertisers and Google, there is a fair chance that the bidding will officially become available in the next year.
However, the advertisers selected for the beta testing do not have to participate essentially; instead, they can use the old method of fixed pricing if they want.
The spokesperson for Google states, “After seeing success with auction-based pricing within our professional services vertical for Local Services Ads, we are excited to bring auction-based pricing as a beta to select markets for local services advertisers. We believe this model will help bring more customers to this trusted group of advertisers.”
In order to participate in this beta testing program, the advertiser must be a “Google Guaranteed” or “Google Screened” certified. These programs involve licensing, insurance and background checks.
Why LSA instead of Traditional Ads?
The LSAs have an advantage over the other ads, as they appear at the top of the search results and other traditional ads. They manifest the reviews, and Google Guaranteed and Google Screened license conspicuously. Although Google has not released any statistical data, the assumptions clearly indicate that LSAs are a great success.
The new auction-based pricing limits the advertisers to bid only once. However, if they deal in different verticles – they can bid separately.
According to Google, bidding offers advertisers more control. But the strategy behind these steps that Google is taking is very clear. As more advertisers will increase, the competition will escalate, and Google will be able to generate more revenue. Moreover, Google has started giving the Guaranteed badge to non-advertisers as well as part of an upgraded profile.