The Evolution of Pay for Placement

As factors such as reviews become increasingly important in the filtering and ranking of local information, the way local advertising is presented changes.  Traditional pay for placement schemes are replaced by relevant sponsorship.

Pay for placement finds its origins in the Yellow Page book where advertisers pay to be more visible by purchasing larger ads and colour.  This works well in a printed book because the normal mode of usage is to flip through several pages in a category of interest.  Larger ads tend to catch one’s attention and allow the advertiser to communicate more information to a potential buyer.

Ads for Movers in the Yellow Page Book

Ads for Movers in the Yellow Page Book

As yellow page publishers moved online, they replicated this pay for placement approach but replaced the idea of a larger advertisement with being placed higher in the list.  In a pure pay for placement scheme the results are primarily ranked on the basis of payment by advertisers.

Search results for movers from Yellowpages.ca

Search results for movers from Yellowpages.ca

When reviews are added to the equation, a purely commercial ranking of results becomes problematic since the user is expecting results that are ranked on the basis of the reviews and any suggestion of commercial interference in these rankings undermines the credibility of the site.  Yelp, a site focused on community generated reviews for local products and services, adopts the elegant approach of allowing sponsored listings at the top of the search results.  This sponsored result is still relevant to the user’s inquiry and also has it’s own reviews.  The sponsor get’s to choose a review to highlight in their listing.

Search results for movers in San Francisco on Yelp

Search results for movers in San Francisco on Yelp

Of course, Google has always enforced a clear separation between what they call ‘organic’ search results and sponsored search results.  This is the very basis of AdWords.  And in practice, the net effect of the Google approach looks very similar to the Yelp appoach.  The difference is that in the Google approach the sponsored advertising could potentially be anything whereas in the Yelp approach the sponsored result is one selected from the ‘organic’ results and elevated to the top of the list.

Google results for a search for movers in Edmonton.

Google results for a search for movers in Edmonton.

As users expect searches for local products and services to be ranked on the basis of reviews or other factors that are personally or contextually relevant to them we are likely to see approaches such as Yelp’s becoming the ‘norm’ for local advertising.

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