Author | Chatmeter TeamDate Posted | February 2, 2023

Local SEO vs. SEM: what drives more revenue for location-based brands?

Local SEO vs. SEM: what drives more revenue for location-based brands?

Where is your traffic generated?

When did you last click on a paid Google, or pay-per-click (PPC), advertisement? You know, those listings pushed to the top of the search engine results page (SERP) with a tag signifying it’s an ad?

For a handful of consumers, especially those looking to find something fast, it’s daily. For others who prefer a more organic journey, it’s never. For many, it’s somewhere in between, depending on the product or service they’re searching for.

So, when top prospective customers aren’t lured in by PPC ads, where does that traffic come from instead?

Today, 42% of click-through traffic on a Google search is via the top 3 listings on the SERP. This does not include paid ads. These three key positions are also called the local three-pack. Flooded with traffic from local searches, ads capture a much smaller percentage of overall clicks, which we’ll explore further in the article.

Google handles over 8.5 billion searches daily, accounting for around 92% of all user searches worldwide! For businesses, this means the best way to drive more traffic into your stores and convert more customers is to land your business listings right where customers are looking — on page one of the local search results!

If you have the resources to invest in a large and robust search strategy that covers PCC ads and local SEO, do it! But if your resources are limited, it can be challenging to decide where to best allocate your time and team members.

Should you choose easy-to-measure clicks from a PPC ad campaign, a sustainable and effective local SEO strategy, or both? Here are a few key questions to consider when rolling out or updating your multi-location brand’s search strategy.

Do your customers click on Google paid ads?

Don’t make assumptions. Instead, ensure your team routinely checks your search engine metrics via Google Analytics, Google Ads Manager, Hubspot, Semrush, or your other preferred web analytics platform. Here, you can get all the data-backed answers you need to see what’s working and what’s not with your local listing strategy.

While the statistic varies for brands by industry, the average conversion rate for Google Ads was 7.26% in 2022. It’s also a number drastically decreasing yearly, with the average dip at 14% per year. This is likely due to more people recognizing these listings as paid ads. They’ve decided to take that extra millisecond, scroll past paid ads, and choose an organic option rather than one weighted to land atop the search page.

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Most of today’s consumers have trained their brains, mostly subconsciously, to bypass search ads and scroll directly to the organic search results. In addition, people are less likely to trust ads and content from businesses, so they skip over them.

Still, if implemented correctly, PPC ads can be very effective. Many businesses turn to PPC ads as a strategy for generating more traffic because it’s fast and easy to implement with minimal training or tools necessary for success. There are also great tracking tools and reporting methods that are more straightforward to interpret and understand than local SEO efforts.

Additionally, pay-per-click online ads can create visibility, generate revenue, and deliver a positive ROI. That said, it’s far from guaranteed. If not well-executed, they quickly become expensive and unsustainable solutions for generating high-quality leads. They may also hurt your brand as an authoritative online presence that shoppers trust.

Local SEO works for generating more revenue

Think With Google reports that four out of five people use search engines for local searches. Additionally, 93% of all consumers report using online search to find a local business, and 50% of those who perform a local search visit a nearby store within one day!

Local search matters to your location-based brand. That’s why it is important to take a look at the behavior of your key consumers who are interacting with those search results.

When people quickly scroll past paid ads, they look for organic results that are objectively ranked by search engines. The number of ranking factors that influence the organic search results creates a sense of trust and credibility among organic results.

Businesses that can reach the top of organic local search results will enjoy greater visibility and higher click-through rates, which leads to increased revenue. Across 10 different industry verticals, we calculated that with an average 4% increase in page 1 visibility, businesses could increase their revenue by an average of 6.5% per store, per month!

That means a small investment in local SEO can equal a relatively huge increase in monthly revenue. Search engines also make it easy for users to compare listings and search results directly with competitors. From online ratings and reviews to photos and videos to online customer interactions to meta descriptions, all compete directly with other top results.

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Ultimately, businesses with the best reviews, informative content, engaging media, and high review response rates generate greater in-store traffic and increase revenue. Listings at the top of the organic local search results convey authority and trustworthiness while allowing your brand to outshine competitors and increase engagement with the most qualified customers.

Getting to the top of the local search results is a no-brainer. That said, actually reaching those top levels isn’t easy, and competition for those top local organic positions is intense. But with the right listing management platform and a great local SEO strategy, your business can rightfully earn and retain that top spot.

PPC advertising works but can’t do it all for your brand

Unless you’re one of the world’s top enterprise brands, your listings likely aren’t at the top of the SERPs, or even in the 3-pack, for all your favorite keywords. It simply comes down to competition, strategy, and resources. That’s why PPC can help your brand get visibility where and when it needs it most.

We suggest that brands run PPC ads to increase visibility for your brand’s lowest-ranking, difficult, or important keywords. However, once you see improvements in visibility and local search rankings, ramp up your investment in organic local search ranking strategy rather than PPC ads.

Countless top-secret factors contribute to how a search engine algorithm pushes out local search rankings and business listings on Google. And with so much already on everyone’s plate, most teams don’t have time to keep track of the constantly changing algorithms.

Luckily, Chatmeter is an expert at local search and designed some of the smartest, most user-friendly tools any business can use to improve its local search rankings.

Schedule a FREE demo today and learn how Chatmeter can help you reach the top of the local search rankings without paying for PPC.

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