• by Craig Greenfield , January 21, 2009

If an award were presented for the most significant event of 2008 in local search, Google's AdWords ban of vanity URLs would win hands down. The policy change took effect April 1 and specifies that any URL used in a paid search ad on Google must match the domain of the destination URL.

The change eliminates the use of vanity URLs to redirect ads and poses major challenges to dealerships, coffee shops or other retail outlets that are located near each other geographically and share the same root URL, www.example.com/mainstreet and www.example.com/secondstreet for example. In light of the recent policy change, Google will only serve one ad per root URL in each of its geographic areas.

Previously, vanity URLs provided an effective workaround to this problem, allowing advertisers to funnel more traffic to a single site or to multiple sub-pages of a specific site and helping local businesses ensure their ad would serve even if another area business shared the same root URL. Google's impedance for the change was to improve user experience and deliver more relevant traffic to paid search advertisers.

Viewed more as an evolution than a revolution, the change does have profound cost and performance implications for national advertisers that share a root URL with local retail outlets and multiple retail outlets in the same area that leverage the same root URL. This affects chain coffee shops, franchise businesses, and dealerships and other establishments that use lead aggregators.

Paid Search

Google's requirement that display and destination URLs match means that an advertiser can no longer use a vanity URL as a workaround to the root URL limitation. To ensure the highest chance that ads will serve on Google AdWords, local businesses that share their root URL with other local businesses will need to create separate Web pages, incurring additional behind the scenes costs to clean up now useless vanity URLs.

Local Business Listings

This change also affects local business listings. Businesses with more than one location within a concentrated area will find creating Local Business Ads in Google a challenge. Many of these businesses may only have one Web site or domain for all of their locations. In these cases, Google would only associate one location for the root domain.

This makes Local Business Ads difficult to create for the locations that are not registered. When created, the address will sometimes automatically change to the only address that is registered, or even a completely different business listing in general.

Options for National-Local Advertisers

Does Google's policy change automatically mean national-local advertisers need a different domain for each operating unit? The answer depends on factors including vertical, product and service category, number of locations, geography, retail strategy, brand development index, category development index and competitive forces.

Best practices for local retailers to consider:

• Make sure the business' address appears in plain HTML text on your front page.

• Proactively manage local business ads and directory listings on a systematic and ongoing basis.

• Align national-local advertising strategies with an auction media buying partner that can produce better ads for less while meeting the individual needs of all stakeholders in the organization.