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Eric offers a few good tips on recovering from Pigeon, but when all is said and done, Google is still in flux with this update.
Why Did My Local Rankings Drop After Google Pigeon?
The goals of the Pigeon update are fairly simple; make local search results for businesses or services clearer and more accurate. To do this, Google is returning to more traditional ranking indicators and away from more local-specific indicators. If this seems like a backward move, perhaps it is; it remains to be seen how permanent these changes are. It’s possible Google is testing different scenarios and the current plan is different from what will eventually be finalized.