Google defines the third local ranking factor as how well known a business is. That is not a search problem, and it changes what advertising can buy you.
Google’s own definition of the third local ranking factor is not a search technique. It is reputation.
“Prominence means how well-known a business is. Prominent places are more likely to show up in search results. This factor’s also based on info like how many websites link to your business and how many reviews you have.”
Read against the usual local search checklist, that sentence reorders everything. Two of the three named factors are largely outside your control on any given day: distance is where the searcher happens to be, and prominence is how well known you already are. The one you can act on directly, relevance, is described as a matter of providing “complete and detailed business info”.
Google also closes the shortcut explicitly: “There’s no way to request or pay for a better local ranking on Google.”
So the question for a storefront is not paid against organic in the abstract. It is which of the two can buy something the other cannot, given that the ranking factor most people are chasing is a description of being known.
What advertising actually bought, in the one experiment that tested it
There is a randomized field experiment on exactly this population, and its results are more useful than any benchmark.
Researchers gave the standard advertising package of a local review platform, free of charge, to 7,209 restaurants randomly selected from 18,294, for three months. Randomization was at restaurant level within subsamples, with a mean treated share of 2.3 percent per postal code so that local markets were not saturated.
The measured effects:
Platform page views: plus 19 percent
Direction requests: plus 14 percent
Telephone calls: plus 7 percent
Clicks through to the restaurant’s own site: plus 7 percent
Customer reviews: plus 5 percent
Three findings alongside the headline matter more for a decision.
Independents gained more than chains. National chains gained less than independent restaurants and local chains with comparable attributes. Advertising informs people who did not already know you, and a chain is already known.
Effects stopped the day the advertising stopped. There was no measured carryover. What you rent, you rent.
And paid views converted worse than organic ones, by 46 percent. The traffic is real and it is of lower quality than the traffic you already had.
The honest limit is the one the authors state themselves. Effects on takeout orders and reservations were not statistically significant, and they say they were underpowered on those outcomes. The return figure that circulates from this study comes from an appendix exercise on pre-experiment tax data matched to 13 percent of the sample, which the authors describe as “a back-of-the-envelope calculation rather than as an accurate or precise estimate of the returns to advertising.”
So: measured effects on attention and intent, no measured effect on revenue, and a clear signal that the gain is largest for whoever is least known.
The reviews route to prominence, and the rules almost everyone breaks
If prominence is partly “how many reviews you have”, the obvious move is to ask for more. Google’s published policy is considerably stricter than most storefronts realize, and three ordinary practices are named as violations.
The relevant section is on rating manipulation:
“We do not allow merchants to: Offer incentives, such as payment, discounts, free goods and/or services, in exchange for posting any review or revision or removal of a negative review. Discourage or prohibit negative reviews, or selectively solicit positive reviews from customers. When soliciting reviews, merchants should not require or pressure users to leave ratings or write reviews while on the premises, nor should they request that specific content be included. This includes: Merchants requesting that staff solicit a certain number of reviews. Merchants requesting that staff solicit reviews that include specific content, including content that identifies a staff member.”
So the tablet on the counter is out. Review targets for staff are out. And asking a customer to mention the technician by name is out.
The single permitted line is narrow: “We do allow merchants to: Solicit or encourage the posting of content that does represent a genuine experience, without offering incentives to do so or attempting to influence the rating or the contents of the review.”
Employee and family reviews are handled under conflicts of interest, and the wording is broader than people assume: a conflict “may include current or former employment, a contractual or consultory relationship, or other professional or personal affiliations”, with no time limit stated on the word former.
Two corrections to what circulates, both from primary text.
The federal review rule does not cover gating. In its own statement of basis and purpose, the Federal Trade Commission writes that “although Sec. 465.4 does not cover ‘review gating,’ review gating can nonetheless violate section 5 of the FTC Act.” Gating is handled in the Endorsement Guides instead.
And there the test is the effect, not the intention. The Guides’ worked example describes gating precisely, then says it “may be an unfair or deceptive practice if it results in the posted reviews being substantially more positive than if the marketer had not engaged in the practice.” And the safe alternative is stated in the same paragraph: “If, in the alternative, the marketer had simply invited all recent purchasers to provide feedback on third-party websites, the solicitation would not have been unfair or deceptive, even if it had expressed its hope for positive reviews.”
You are allowed to hope. You are not allowed to filter.
Two further points worth having. On incentives, Google is stricter than federal law: the federal rule bans an incentive only where it is conditioned on a particular sentiment, while Google’s policy bans incentives outright. And on suppression, the federal provision at section 465.7 reaches “anyone” who uses “an unfounded or groundless legal threat” or “a public false accusation” to get a review removed, which covers flagging honest reviews as fake without a reasonable basis.
One number reframes the competitive question, and it is free and official.
In reference year 2023, the United States had 8,361,342 establishments with employees and 30,427,808 businesses with none. That is 78.4 percent of all businesses operating without a single employee.
By sector it goes further. Among specialty trade contractors, 1,928,748 nonemployer businesses against 521,315 employer establishments, or 78.7 percent. In personal and laundry services, 2,422,475 against 272,787, or 89.9 percent. Among barber shops specifically, 94.8 percent.
Two consequences for a storefront deciding where to spend.
The directory you are benchmarking against is a fraction of the field. Most of your competition does not appear in employer statistics, does not run advertising, and competes on proximity and word of mouth. Outspending the six businesses you can see does not address the several dozen you cannot.
And most of that field is small enough to be inconsistent. Average receipts for a nonemployer business in personal services were about 34,000 dollars in 2023, which indicates a large share of part-time activity. That is where a professionally run storefront actually wins, and it is not won on a search results page.
One methodological caution if you use these figures: the employer file uses one industry classification vintage and the nonemployer file another, which is negligible at the broad sector level and not at the detailed one.
Treat paid as rent and prominence as ownership. The experiment is unambiguous that advertising effects stop when the spending stops, and Google’s own definition puts prominence on links and reviews accumulated over time. One is a lease, the other is an asset. Both are legitimate, and they are not substitutes.
Buy advertising when you are the unknown one. Independents gained more than chains in the experiment, and the mechanism is informational. If a customer already knows you exist, an advertisement mostly changes which line they click. That is the situation where a buy earns its budget, and our page on B2B paid acquisition sets out how a modest one is pointed at people who do not yet know the business exists.
Fix the listing before buying traffic. The one controlled study on completeness found the share judging a business reputable rose from 36 percent to 69 percent between a minimal and a complete listing. It is a perception measure in a laboratory, and it is free to act on.
Ask everyone, filter nobody. Both Google’s policy and the federal guidance converge on the same rule from different directions. Ask every customer, offer nothing, do not script the content, and do not ask on the premises.
And measure the thing you can measure. No public institution publishes a cost per click or a cost per acquisition, and neither platform publishes sector benchmarks. What you can measure is your own: calls and direction requests per week, before and after, with the advertising switched off for a fortnight. That comparison is small, crude, and more honest than any industry average, because every industry average you have seen came from an agency describing the accounts it happens to manage.
Frequently asked questions
What does Google mean by local prominence?
It defines it as how well-known a business is, adding that the factor is based partly on how many websites link to the business and how many reviews it has. That is a description of reputation, not of a technique, and Google states there is no way to request or pay for a better local ranking.
Does local advertising work for a small storefront?
A randomized experiment on 18,294 restaurants, with 7,209 given free advertising for three months, found 19 percent more page views, 14 percent more direction requests and 7 percent more calls. Effects stopped immediately when the advertising stopped, and independents gained more than national chains.
Can I ask customers for a review in the shop?
Google's policy says no: merchants should not require or pressure users to leave ratings or write reviews while on the premises. It also prohibits asking staff to solicit a set number of reviews, and asking customers to name a staff member in the review.
Is it legal to ask only my happy customers for reviews?
The FTC states that its consumer review rule does not cover review gating, but that gating can still violate section 5 of the FTC Act. Its Endorsement Guides make the test the effect on the distribution of reviews, and say that inviting all recent purchasers would not be deceptive even if you expressed a hope for positive ones.
How many competitors do I really have?
More than the employer counts suggest. In 2023, 78.4 percent of United States businesses had no employees at all, rising to 78.7 percent among specialty trade contractors and 89.9 percent in personal services. The employer directory is a fraction of the field.