Google Says Local Now Accounts for 40 Percent of Mobile Searches, “Distance” Now an AdWords Ranking Variable

Google today announced new mobile ad-units along with some interesting new stats in regards to mobile search.

According to the company, 40% of all mobile searches coming to Google are local in nature at this point, which continues to trend upward.  As such, the search giant also announced that “physical location,” or the proximity of a local business to a user’s location will become a targeting variable when serving ads to mobile users.

We reported yesterday that Google is now on track to bank over $2.5B in mobile ad sales this year, and it looks like the company’s “Click-to-Call” ads are driving a large portion of this total.  Google’s Surojit Chatterjee said that Click-to-Call is now driving “millions of calls per week” globally for the company.

The new AdWords ranking variable that takes into account a user’s location is good news for local businesses and retailers as it aims to drive more relevant foot traffic at lower costs.  Local businesses will need to use Location Extensions to take advantage of the new location targeting, and the smartphone user will need to be opted-in to share their location for location proximity to kick in.  In addition, here’s a quick rundown of the new ad-units Google introduced today . . .

Custom Search Ads for apps: will appear when users search within apps for content. Search ads now can be integrated into apps, which wasn’t available previously

Click to Download ads: will direct users to download areas in Android Market or iTunes app store.

Mobile App Extensions: these ads can direct people to specific apps or pages within apps already on their phones. Here’s Google’s example: “If someone searches for sneakers on a mobile device, they might see an ad that takes them directly into a cool shopping app they’ve installed on their phone.” It’s not clear what happens if the app isn’t on the user’s phone already.

Circulars (not limited to mobile): these are more graphically rich ads that contain product images, pricing and deals/offers. Google says, “When someone clicks on a search or display ad (on desktop, mobile or tablet devices), they may see these engaging ads which contain photos of relevant products and special offers.”