Google Ups the Ante As the PPC Landscape Continues to Change

As marketers, we have gotten used to always being one step behind Google, with their proclivity for rolling out last minute algorithm updates and hush-hush Google+ changes overnight.  Their latest change in the paid space was conducted in a similarly secretive manner but sheds a revealing light on Google’s priorities. The gradual removal of right-hand side ads as well the addition of a fourth ad on the top row ads indicates their increasing focus on mobile as well as the purposeful creation of scarcity on their results pages. Read on to learn the intricacies of these changes and what they’ll mean for your advertising budget.

Here is how ads used to appear on Google:

  • 1-3 ads at the top of the page
  • The usual right-hand side ads
  • Ads at the bottom every so often

Here are the following changes that will be rolled out:

  1. The removal of the right-hand side ads
  2. Adding a 4th ad at the top of the page for highly commercial queries

According to Search Engine Land, Google is now rolling out a change that is going to eliminate the right-hand side ads from the search results. As a result, the ads will appear only on the top and/or bottom of the page. This update will affect users worldwide and in all languages. The only exceptions will be the Product Listing Ads which will still show either above or to the side of the search results and Knowledge Panels. Google, though, has not released an official statement on this update yet.

Additionally, from this same report, a 4th ad will begin showing at the top of the page for desktop searches (at least for highly commercial queries as of right now). A Google spokesperson said: “This is designed for highly commercial queries where the layout is able to provide more relevant results for people searching and better performance for advertisers.”

What is a commercial query you ask? According to a Google spokesperson, “it is where people express a deep intention to buy”. In addition to these ads at the top. Again, just like with the right-hand side ads, Google has not yet released a public statement on this.

Back in December, Google started testing on a small scale showing 4 ads at the top of a results page. These accounted for 1% of SERPs with top ads showing. Then all of a sudden, according to Moz.com, on the morning of February 18th Google began rolling out this “4 ad block” change a bit more widespread on these commercial queries.

According to this same Moz.com research, over the past 2 weeks, there has been a steady increase with these “4-ad blocks” appearing, but they are now showing more frequently as of February 18th. On this same day, there was a big drop in right-column ad blocks and a corresponding increasing in bottom ad blocks.

Here is an example of the “4-ad block” set:

Ben Goldman Blog Graphic

This 4-ad block change would also push the organic listings further down on the page, much to the chagrin of SEO specialists.

So what do these changes mean for companies and advertisers?

  • More PPC visibility above the fold, at least for these commercial queries
  • With the sidebar ads being removed, this may lead to more overall clicks
  • It is more important than ever to have ad extensions in your account to stand out from the competition since ad space would be at a premium. You don’t want to be the one ad on the page that is lacking in this department, as there won’t be any side bar ads to draw away the user’s attention.
  • Fewer available ad impressions on the first page of results
  • Lower Click Through Rate (CTR) for any ad below position 3 or 4
  • Higher overall Cost Per Clicks (CPC) given that the ads in lower positions with lower CPCs would either get removed from the page or fall below the organic listings

Why are these changes this happening?

  • Google is looking at ways to drive more revenue from desktop search by making these listings more competitive
  • According to The Media Image, Google may have determined that the average CTR for right-hand side ads is poor and, therefore, the expected CPC increase from this change would be more profitable
  • With mobile traffic continuing to gain steam, it makes sense that Google is trying to have the desktop/tablet experience mirror that of mobile. Mobile does not have ads on the side.
  • Knowledge Panels and Product Listing Ads have been encroaching on the right column space for a while pushing the right-hand side ads down further on the page. This was apparently just the beginning of the end for these side bar ads.

Closing Thoughts:

This is certainly a game changer in the industry. In the long run, Google should make more revenue from this change as the auctions will be more competitive. Smaller advertisers will be forced to spend more money if they want that prime real estate at the top of the page. If they do not, they will have a tough time competing in the space.

This is an important reminder to audit your accounts. It is now more important than ever to have a solid structure in place utilizing the direct path approach to paid search in addition to making sure you have best practices in place such as:

  • A robust negative keyword list
  • Utilizing ad extensions
  • Relevant ad copy
  • Etc

By tightening up your account, you will inevitably improve your quality score which will help your ads to show up in those coveted top spots.

Check back regularly for updates on this ongoing situation.

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Update as of 2/24/16:

  1. The official 4-ad change along with the removal of the right hand side ads came on Monday 2/22.
  2. The 4 ads look to be showing up for the majority of queries now. Essentially, the 4 ads will show for any highly competitive auction where 3 ads were showing up prior.
  3. Nothing will change for the ads below the organic results. It will still be anywhere from 1-3 ads appearing.

Did you like this post? Let us know why (or why not) in the comments. In the meantime, check out our blog CMO Friendly, CFO Approved: The Direct Path Approach to Paid Search for tips that will revolutionize your paid media approach.

Ben Goldman

About Ben Goldman

Ben Goldman is a Senior Online Advertising Specialist for Fathom's Healthcare Team. He specializes in paid search and display. Ben oversees the day-to-day management of his accounts, proactively coming up with new strategies. Ben is passionate about exceeding client goals. He really cares about his clients and will do whatever it takes to solve their problems. In his spare time, Ben enjoys spending time with family and playing sports.

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