A recent study by BIA/Kelsey, a media research and consulting firm, projects that local search advertising on Google will exceed $19 billion in the United States by the end of 2018. By 2022, local ad spending on Google properties is expected to reach $27 billion.

To put these figures in perspective, local Google AdWords spending exceeds local on-the-air ad spending for the entire US radio industry—all 11,044 commercial stations. Additionally, it rivals the local advertising spending of all 1,282 major television stations in the country.

2018 Local Advertising in Billions Via BIA Advantage 2018

Google currently owns about 40% of all local advertising across digital platforms. When competitors are factored in, digital local ad spending far surpasses that of radio and television.

Another study, conducted by the advertising firm Merkle, explored the use of LIAs—local inventory ads. Local inventory ads display a merchant’s products to nearby shoppers who are using Google search. When shoppers click the ad, they’re directed to the “local storefront”—a Google-hosted page for the merchant’s store. Shoppers can use the local storefront to browse reviews, view in-store inventory, get directions, and more.

Merkle discovered that LIAs produced almost 7% of desktop Google shopping clicks in the first quarter of 2018 (up from 1% the previous year), and they produced 15% of mobile Google Shopping clicks during the same period (up from 14% the previous year).

DialogTech Local Investory Ad Share of Google Shopping Clicks Via Merkles Digital Marketing Report

How Local Ads Drive Purchases

Cleary, local ads are gaining traction in the digital marketing space—this is because they target customers with high “purchasing intent.” Over 18% of local searches on smartphone lead to a purchase in a day, whereas only 7% of non-local smartphone searches drive purchases. Additionally, when shopping for everyday purchases, 93% of customers travel less than 20 minutes. In nearly every industry, customers expect a certain standard of proximity and convenience:

  • 44% of insurance customers expect an agent to be within 5 miles
  • 56% of financial customers expect a location to be within 5 miles
  • 50% of same-day hotel bookings are made within 30 miles of the hotel
  • 53% of automotive customers expect the dealer to be within local driving distance
  • 60% of healthcare patients choose doctors because of convenient location
  • 96% of seniors move to retirement communities in their own states
  • 57% of retail customers expect a location to be within 5 miles

Smartphone users are the ideal target for local ads—they’re three times more likely to make a purchase based on location proximity than tablet users. And, according to Google, mobile users are 57% more likely to visit a store, 40% more likely to call a business, and 51% more likely to make a purchase.

US Local Search Volumes by Device

How to Drive Call Conversions from Local Ads

Marketers are starting to realize that higher mobile ad spending converts directly to more call conversions. In fact, a recent report by BIA/Kelsey projects that there will be a 74% increase in calls to US business from mobile ads from 2016 to 2020.

US Mobile Ad Spend and Call Conversions

Below are some helpful tips to maximize call conversions from your local ads:

  • Write copy that gives users a compelling reason to pick up the phone.
  • Feature your phone number prominently in the ads and on your website.
  • Take a mobile-first approach to your ads.
  • Create location-specific ad content.
  • A/B test different copy and refine your ads accordingly.
  • Schedule ads that drive calls when you have someone available to answer.
  • Personalize the experiences of your callers.
  • Track the calls you receive.
  • Measure the ROI from the calls driven by your local ads.
  • Bid on ad placements according to which deliver the most value to you.
  • Build off of successful campaigns by targeting lookalike audiences.
  • Continue to tweak, test, measure, and adjust your strategy.

Are you looking for more ways to fine-tune your local advertising approach? Whether you’re a beginner or an experienced local advertiser, our on-demand webinar, 10 Local Strategies to Drive More Customers from Adwords and Facebook will help you take your strategy to the next level.