• by Matt Naeger , November 9, 2004

Lately, I've received some e-mails expressing confusion about local ad placement programs and how they might be used within search marketing campaigns. Below, I have detailed the difference between Google and Overture's program offerings explaining the main components of both and providing examples of where and when to use them.

Google's program is more useful for search engine marketing professionals. The parameters of the program are simple. Google will place an ad for your site within the AdWords paid listings based upon two location specific criteria: the physical location of the searcher and/or a named location within the query.

Google identifies user location for the program based on the Internet protocol (IP) address of the computer that is performing the search. The named location within the query is determined by the terms used within the search (either a ZIP code or name). A company has the ability within the program to place ads within a state, city/metropolitan area, radius from a given point, or within an area that you define through the use of latitude and longitude points.

Although this program allows for a lot of flexibility as to how you define the area where your ads will be published, it also has some flaws that you should be aware of. The largest concern is with IP-based targeting. IP targeting has been criticized because an IP address can designate the city where an Internet Service Provider (ISP) is located rather than where the searcher lives. In fact, a user may actually live miles away from their ISP's location.

This isn't a problem if you are targeting the region as a whole, but may prevent you from targeting your program as granularly as you would like where there are various parts of the region that may or may not fit your ideal customer profile. In addition, many users do not show an identifiable IP address that can be tracked to a location. For instance, a searcher that utilizes AOL as their ISP currently cannot be tracked to his or her search location.

Google's program does allow both regional and national advertisers to compete for the same customers in limited market areas. While the quantity of people that can be identified and targeted locally is small now, these numbers will continue to grow, allowing companies to place search ads the same way that ad agencies make local cable buys.

Another benefit of the program is that it gives companies that cannot compete for high-cost terms the ability to limit spending to an identified target customer. This also enables them to purchase more valuable terms at a lower total cost.

Overture's program is designed to be most useful for small- and medium-sized enterprises (SME's). It is significantly different from Google's in that the local targeting is based solely on the terms within the search. Overture states that over 35 percent of all searches on its network contain a location specific term. Unlike IP targeting, this method provides a more consistent view into the searcher's intent. This allows for SME's to target only a specific region of the country.

Depending on your position as an advertiser, the parameters of this program will be more or less beneficial. For SME's, this program allows for companies to direct traffic to a brick-and-mortar store locations. In addition, Overture provides a page for each listing with information pertinent to the store such as hours, contact information, store description, etc. allowing for businesses without Web sites to still advertise on the Web.

Both of these points suggest that the program was designed specifically to get small businesses on the Web and advertising with Overture. This program is not optimal for companies that would prefer their ads to drive traffic directly to their site. However, it does make it possible for large national retailers with many locations to advertise each location separately.