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Google Changes “Sponsored Links” to “Ads” – Watch your Click-Through Rates

Posted By Alec Green On November 11, 2010 @ 1:00 am In Featured,News,SEM | 13 Comments

In conducting research for my blog post on Instant Previews [1], I noticed yet another change to the ubiquitous Google search results page.  And based on the results of a new study [2] from a Harvard Business School professor, this change could pose a far more serious threat to your click-through rate (CTR) than Instant Previews covering up ads. Without much fanfare, Google has replaced the label “Sponsored Links” with the word “Ads” above both the top 3 paid results as well as the right-hand rail: [3] Google made this change on November 4 and confirmed the roll-out [4] to Barry Schwartz at Search Engine Land.  Google has officially retired the term “Sponsored Links” on all English language domains, and will be rolling it out to other domains and languages in the near future.  At the time of this writing, “Sponsored Links” is still being used on Gmail, Google Maps, and Google Shopping. With all the tweaks Google has made recently to its standard results page, what impact could a change from “Sponsored Links” to “Ads” really have?  Long before Google made the switch, Ben Edelman [5] and his research team set out to answer this question. Edelman conducted an online experiment in which he asked a random group of internet users to answer two questions based on research using a search engine.  The subjects were directed to use a custom URL provided by the research team.   For half the subjects in the study, each reference to “Sponsored Links” in the Google results page was replaced by “Paid Advertisements” as shown here: [6] Edelman’s study included questions pertaining to “commercial research” (searching for a mattress retailer) as well as more “informational research” (researching various cancer treatments).  Across the entire sample and all types of searches, Edelman estimates that a change from “Sponsored Links” to “Paid Advertisements” yielded a 25 to 33% reduction in clicks on advertisements. The study [2] has a sound methodology and the entire article is definitely worth a read.  It includes a detailed overview of the prior research into this topic as well as the role of the Federal Trade Commission (FTC) in regulating pay-per-click advertising. Edelman maintains that Google has not gone far enough with this recent change.  The FTC has called for advertising disclosures to be both “clear” and “conspicuous.”   I certainly consider the term “Ads” to be more clear than “Sponsored Links,” but Edelman provides a convincing argument for why the term “Ads” will not be nearly as effective as “Paid Advertisements” in distinguishing the sponsored from organic results. What do you think of Google’s latest change?  Have they gone far enough with this disclosure?  Had you even noticed Google’s new advertising label?   And what impact (if any) do you believe it will have on search behavior?  Leave a comment and let us know.

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URL to article: http://www.thesearchagents.com/2010/11/google-changes-sponsored-links-to-ads-watch-your-click-through-rates/

URLs in this post:

[1] Instant Previews: http://www.thesearchagents.com/2010/11/instant-previews-bring-your-website-to-the-google-results-page/

[2] new study: http://www.benedelman.org/adlabeling/adlabeling.pdf

[3] Image: http://www.thesearchagents.com/wp-content/uploads/2010/11/sponsored_links_now_ads.png

[4] confirmed the roll-out: http://searchengineland.com/google-does-away-with-sponsored-links-label-now-ads-are-labeled-ads-54956

[5] Ben Edelman: http://www.benedelman.org/

[6] Image: http://www.thesearchagents.com/wp-content/uploads/2010/11/google_paid_advertisements1.png

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