It’s official (well kind of) that Google is ditching its right hand side ads and favouring more ads above the organic search listings (I’m seeing 4 instead of 3 in many cases) and moving others underneath. The complete roll out should be complete by the 22nd Feb so chances are, its in effect as we speak.
This ad format is very much in line with what is happening in mobile, making it appear a transition to more seamless and uniform browsing is a factor in this.
There are some things that won’t be affected such as Google Shopping ads and the knowledge graph but this is much more than a visual amendment. I believe it will fundamentally change the way we manage campaigns and channel budget allocation.
So what does this mean? Here are 6 ways the game will change
1. Agency and company collateral
As an agency our collateral for years when it comes to AdWords involved those ads on the right hand side. The thought of changing all the pitch decks, solution sheets and web references is making my head spin a little bit. Everything we publish online and offline in regards to AdWords has become completely and utterly outdated within a couple of days. Don’t believe me? Google image ‘Adwords Ads':
What about Organic search? Yeh that collateral will need to change as well. Try “Google Organic Listings”
Heat mapping research:
I sense some super busy designers getting busy redoing all the decks as their hard work has been labelled null and void in a matter of seconds. I also see some creative agencies cracking their knuckles and getting ready for the Valentines Day equivalent of a florists.
2. Advertising costs
Since this update was leaked (note Google has not officially announced this amendment) everyone is calling it a cash grab and understandably so.
What we all need to understand is this: The difference between being on the right hand side and being at the bottom of the page is humungous. (Humungous? Yeh I know but I couldn’t think of a ‘bigger’ way to explain it!).
To put it into perspective, It’s the gap between something being visible and something not being visible. What would you call that?
As an advertiser that means in order to get any traction you effectively need to ramp up your bids to be seen and clicked. Being 5-8 won’t generate clicks anymore so you need to be in that top 4 (formerly the Top 3). Being outside the top 4 is like bidding to be on the second page.. whats the point?
What will happen is Company A will bid higher to ensure visibility. Company B (the competition) will do the same to get their visibility back. Company A will respond and so will company C when they see they are no longer getting traction. As you can see this will cause CPCs to go up and up and up.
Think about this scenario when there are 20+ companies competing for the same real estate and keyword.
3. Shopping Ads / PLA
Google shopping ads have always, in my opinion, been great value. Now they will prove to be even better value as Google still puts shopping ads on the right hand side.
The advantage is now with the eCommerce businesses who should still enjoy low CPC rates (definitely lower than Search ads) even after this change.
As you can see in the above screenshot.. Shopping ads now really stand out since they don’t have anything around them.
4. Organic listings
A week ago there used to be a maximum of 3 Ad positions above the first organic listing. With 4 adslots currently available above the organic listings this means that organic listings have now been pushed further down.
It’s important to understand the effect of page positioning. In this study it shows that around 70% of people click the listings in the top 5 which are above the fold. The remaining get around 15% and are generally below the fold.
This means that single shift down will have a considerable affect on organic traffic. It doesn’t just affect those in that 4-5 listing area close to the fold, it affects the top position as that is now right on the cusp.
Now you actually need to scroll down to view the first organic listing!
Have a look at this screenshot for the term ‘business finance':
That highlighted in yellow is the first organic listing.. that faint line you see at the bottom is the end of the browser screen (ie ‘the fold’). I’m not on a super small screen either, its a pretty standard 13inch Macbook.
This ultra low page positioning is due to multiple factors but one of those is that we now have an added AdWords ad at the top. The other most noticeable trend that has exacerbated this is that AdWords ad extensions give you so much real estate to play with that an ad can take up 6-7 lines. Put a few of these into the listing and you really only have room for 1 organic listing to show before you need to scroll.
Do you also notice how the ads and organic listings blend like never before? The shading is gone and the only thing that differentiates the ads are a little yellow box that frankly, can be hard to spot.
5. Local Listings
We know Google never had a great time with their local and social offering and this amendment is doing that no favours.
Have a look at his result for ‘computer repairs sydney’
The local maps listings are virtually off the page now. Again you need to scroll to view the entire maps and the local listings it shows.
Those ads looks rather impressive though
6. Multi-Channel and Ad Format Budget Allocation
Suddenly with this change, other channels and advertising avenues become much more attractive.
The ‘option’ of trying new channels moves into the ‘need’ to try new channels. It may well be that search may become unprofitable and advertisers will need to expand their channel selection. A possible backfire after this change is that advertisers may look at other search engines like Bing.
I feel this is a positive thing as there are lots of channels and ad formats that are worth exploring where value lies. A lot of these untapped or under-utilised areas fall around Video, Gmail and Customer match where costs are a fraction of that of search.
Is this change a good or bad thing?
I think the effect can go either way, depending who you are and how you are utilising search.
I feel eCommerce will come out of this strong while service based businesses will be forced to focus on their brand and content instead of brute CPC force. This leads to better and more creative marketing.
The misconception here is that those with bigger budgets will benefit since they will be able to pay the most and stay visible to their core market. I am looking at it differently however and I don’t agree. I feel that those who are responsive and nimble in their marketing approach will come out on top as they are the ones who will success in their search for avenues which are largely untapped.
There is not doubt the landscape will change but change is a time where you could either succumb to it or thrive from it.