Although it looks innocent at first, is this shill bidding? Google's Adwords is an auction, and they are competiting in this auction. Clearly they have other places to put these links, and can simply put them above the sponsored links for free. Instead, they have chosen to compete directly with Adwords advertisers with the result of driving up the adwords auction ppc prices. If the Google bid wins (the user clicks on them), google just resells the inventory again in another auction on local.google.com. You will often see the same advertisers, of course, from the previous page who's prices are being driven up, sans the google local ad.
What are your opinions?
the difference here, of course, is the relevancy and CTR equation. when ABC shows a promo for "desperate housewives" it doesn't bump a coke or pepsi ad... in fact the self promotion is almost always in unsold inventory or in times alloted specifically for promos. and their self promotion usually doesn't make the other ads less effective.
same thing for newspapers and other ad vehicles.
but - just a guess here - i'd say that while google is placing its ad prominently on top of all others in the right hand column, i doubt seriously they have a monetary "bid" in place, even an internal bogus "monopoly money" bid... and - again, i'm guessing here - their placement on top only moves everybody else down one, but does not affect the "true" CTR for real advertisers.
my guess is that you could not "outbid" the google ad even if you tried, as it's probably set to show in that position no matter what (so much for relevancy!)
so i don't think it will affect the price you pay, but it may impede the effectiveness of your ads, particularly if you normally occupy that top right spot.
whether or not they've put a disqualifier in the algorithm so those who don't get clicked on don't get penalized (lower CTR) when only a local google ad *is* clicked on, well, that's anybody's guess.
This is just smart use of G's own marketing options for their products. If they wanted to drive up bidding they could do so much more effectively and subtly...say broad match for example.
Clearly they have other places to put these links, and can simply put them above the sponsored links for free.
I don't think it’s as simple as one might think to just "place a link" outside the fold of sorts when you are talking about something as complex as the G page and integration of ad placement for search terms. Having battled many mammoth apps in my day (oh the days), the path of least resistance often wins. They have a really good system with Adwords for the placement of marketing ads to offset where a page does not get organic rank, so it makes sense to use it like the rest of the world. It's not driving up bid pressure if you can't get above them. (Note: I'm assuming you can't. I've never tried, but it seems to me that is what they would do). If anything they are cannibalizing revenue - it's justified in their eyes (and mine if they or anyone else cares) to push their product and therefore worth the opportunity cost of someone else having the spot.
One more consideration, if you do a search for "local advertising", which is not a trademarked term, you'll see adwords.google.com on top. Same principle here.
Oh but the conspiracy is still more fun...
There are other times that their ad moves from the top results to the side with a slight variation of search query, even if they're the only advertise. This would seem to follow that their ad placement is following the premium position rules.
I've had to compete against them before for ad space, and sometimes they seem to enter a legitimate bid, and I've had ads top theirs. There are other times, when I think they just enter the max bid, and there is no way to ever get an ad above theirs and maintain a reasonable ROI.
There are several searches where one can see what Google is trying to push. Google Search for Online Advertising [google.com]. What's odd about this is it's an ad for AdSense and not AdWords. Even a search for AdWords [google.com] brings up an ad for AdSense from G. These are definitely not the most relevant landing pages that G has for these searches.
There are other times, they seem to be manipulating the results, as they aren't a Content Management System [google.com], although it could be that they just entered a very high bid for this keyword.
