What?
Search industry media has reported a significant change in the search engine results page (SERP) on Google.com, eliminating paid ads on the right hand rail. Going forward Google will only show ads at the top and bottom of the SERP. In most cases, this will mean a total of three ads at the top and three ads at the bottom. But in some high volume commercial cases, Google will display up to four ads at the top.
ecommerce example, PLAs still display on right rail
Shows new ad display, 4 ads above the organic results
Why?
Until there is an official announcement from Google, all we can do is speculate but we do know Google changes are typically made for two reasons; user experience and revenue for Google.
- Regarding UX, this creates a more uniform user experience across all devices, particularly aligning desktop search with mobile search results.
- Another user experience consideration is how ads have been displayed between the two groups, with ads on the top of SERPs having much different ad extensions and display options than the ads on the right rail.
- Regarding revenue, Google stands to make a ton of extra money with this decision. Less ads creates more competition, which means that CPC’s for the top three (or four) spots will increase substantially.
- Click through Rate and Quality Score will be more important than ever in terms of combating the higher pricing.
Impact for advertisers?
- It stands to reason that non-brand inventory will be affected the most from this change, due to increased competition over less ad real estate. In most cases the number of ads will be reduced by nearly half, with only six ads showing compared to eleven before the change.
- This means higher CPCs for everyone.
- Another (positive) impact is that more of your non-brand inventory may begin to display ad extensions, since they will appear in top positions on the SERP. This is a good thing for CTR.
- If CTR on non-brand actually improves, then QS on non-brand will improve too, which should help offset the higher CPC’s at least some.
Now What?
What every business needs to do now is start analyzing the impact of this development across their adwords accounts. Here are five immediate things to start thinking about:
- This will change your costs, so start looking at the cost-side metrics of your traffic in terms of top vs side; CPC, total costs, etc.
- Traffic will most likely decrease, particularly from non-branded queries. Get a solid understanding of how much volume will be impacted without these ads.
- Your revenue will be impacted with increased costs and/or less overall volume, so understand what this does to your bottom line. You may find your business relying more on branded search and organic traffic rather than long-tail.
- Know how this changes your bid strategy, how much headroom do you have between your bids and your CPA in case you need increase bids to maintain volume?
- Educate yourself or your client on next steps. You need to be able to have a plan to maintain your business model under these new conditions, you also need to understand how to keep expanding under these new conditions.