Google Removes Paid Ads from Right Rail on Some Desktop Searches

Posted on Wednesday, November 9th, 2011 by Print This Post Print This Post

Categories - Featured, SEM

On November 2, Google announced a new layout on the results page for some desktop searches.  Currently, paid search ads typically are shown above and to the right of the organic search results.  With the new change, paid search ads that were previously shown in the right rail may in some cases appear below them.

(Ads showing to the right of organic search results)

(Ads showing below organic search results)

This new iteration of the standard search results page will include three paid ads at the top of the page and three at the bottom.  This layout mimics Google’s current search results page on tablet computers.

According to Google, their objective with the new placement is to improve user experience and the flow of the search results page.  “Starting today, ads that have previously shown to the side of the results may in some cases appear below them. We dynamically optimize each search page, including its ads, to provide the best experience for our users,” explained Jerry Dischler, Director, Search Ads Product Management in a blog post announcing the change.  “In many cases, we have found that displaying ads below search results fits better into the user’s flow as they scan the page from top to bottom. On average, this placement performed better than side ads in terms of click-through rate in our tests.”

Why would Google make this change?

At first, it may seem counter-intuitive.  Google is actually reducing the number of ads that appear above the fold.  Fewer advertisements could result in an overall reduction in paid clicks.  And it could discourage some smaller advertisers from even bidding on the keyword, thereby reducing competition and lowering prices for everyone.  Actually, the opposite is probably true.

Higher Cost-per-Clicks- Competition for premium ad positions, the top 3, is likely to increase with this change, resulting in increased CPC metrics.

  • Assuming that 85 percent of paid search revenue can be attributed to premium ad placements, we can conclude that Google will need to boost in premium CPCs by 15 percent in order to break even, given the (predicted) loss incurred from removing ads from the right hand rail.

Increased competition for premium positions will require advertisers with less relevant content and lower quality scores to bid even higher on ads to stay above the fold.  In this respect, Google is staying true to their mission of rewarding those advertisers that offer the best ad experience, provide the most relevant content based on the searcher’s intent, and have a well-optimized landing page.

More relevant results, better user experience- Google has introduced several new updates over the past few months, aimed at improving the quality of search results and user experience.  The decision to add paid ads below the fold reflects Google’s recent initiatives, demanding higher quality, more relevant content.

How will the change impact search marketers?

How the change impacts paid search marketers depends on how Google ultimately balances the relationship between Quality Score and cost-per-click.  We expect that CPC will increase as a result of the new placement, but overall click volume should remain constant.

Increased importance of landing page relevance and quality- To improve their competitive standing, marketers will need to focus on the quality and relevancy of their landing pages.

  • Improved landing page quality is part of an initiative Google pushed forward at the beginning of October.  Thanks to the changes, landing page experience  now carries more weight in calculating AdWords Quality Score.

Budget impact will vary depending on the advertiser and the keyword- Many advertisers who drew traffic from positions 4-9 could be in a difficult position moving forward.  In order to maintain their current traffic and conversion levels, many of these advertisers will need to increase their bids or quickly shift budget to alternative channels..

Recommendations going forward

 Every account is different, and the specific tactics will depend on your current mix of keywords and bids.  In general, here are some steps you can take to ensure your overall performance doesn’t suffer as a result of Google’s latest change:

  • Re-segment campaigns into higher-position (1-3) and lower position campaigns
  • Bid up position 3.5/4 keywords that were profitable to maintain that traffic
  • Get more targeted – figure out what is the core of your business and where you want to pay to play
  • Review all campaigns and do a gut check– divide them by two (top position campaign, lower position campaigns) and figure out where you need to bid up to stay in the game.
  • Do more testing – isolate those keywords that are on the fringe and press those keywords that can still work when you bid up to stay above position 3.
  • If much of your converting traffic has come from positions 4 and below, its time to quickly figure out:
    • How to get more value out of the traffic you have. This can include:
      • Display re-marketing
      • Re-targeting
      • Landing page optimization- bidding up with an improved landing page may have a positive impact on quality score.
    • In what other channels you can make up for this lost traffic.
      • Google Display Network
      • Google Content network
      • Social Media

Google is constantly testing and making changes to its ubiquitous results page.  Although this one seems like it could have a more far-reaching impact – especially if Google ends up implementing it on more desktop searches – our approach remains the same: thoughtful intervention based on experience and best practices, followed by methodical analysis of the data.  Measurement of the true impact on performance will take some time.  We plan to measure the impact of this change on our campaigns and report back on our findings.

In the meantime, leave a comment and let us know how the change has impacted your accounts. Are you seeing higher CPCs on certain keywords?  Any big swings between brand and non-brand terms?

 

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