Google cuts off the displayed description tag at about 154 characters, but may index up to 185 characters. Other engines may index up to 250 characters, but will still only display about 150.
Therefore, try to say what you've got to say in 150 characters or less, but feel free to use up to 180, and even up to 250 if you're not concerned with the entire thing getting indexed by all the search engines.
Your description tag is not only sales copy for people to read, but it's also food for the hungry search engine spiders. There's probably no more important ranking factor than a good description tag, assuming a site is structurally sound.
However, one mistake I see frequently, is people trying to stuff too much information into their meta description tag, then reusing that meta description in multiple places on their website. Don't describe your whole business, just describe the page in question.
For example, let's say you're a contractor who provides plumbing, remodeling, and electrical work. You would want to have a completely different description tag on each of your service pages. Don't make the mistake of using one description for all your pages.
Use your primary keyphrase in the beginning of your description tag too. This gives a higher keyword prominence percentage to the search engines and your site will rank higher in some engines.
Don't overuse your keyphrase though, or it can be considered "webspam". Higher than zero keyword prominence is good, but higher still is not always better.
Remember, the primary reason for a good description tag is not so you can to rank higher. Google for example, is currently not using the description tag in their algorithm. The primary reason for a good description is to compel the reader of your SERP listing to click on you instead of the competition.
Use natural sounding language, proper grammar, and try to peak interest in the subject.
Consider making an actual offer in your description tag. Remember, you want the reader to click your ad, not just to find your URL. How many times have you skipped over a search result because the two lines of text you see (the description tag) in the SERPS were just gibberish?
Finally, if you're a local business, I would encourage you to put your address, including your zip code in your description meta tag. I usually put it after the 150th character, but complete it before the 180th.
The reason for this is that there is strong evidence to suggest that this will help your local search results. You may read differently elsewhere, perhaps when the description tag is not factored in ranking, but I'll stand by my statement. As more and more search engines are trying to determine what their visitors want, local searches matters now more than ever.
To learn more about this author, visit Scott Hendison's Website.
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