As of February 19, 2016, Google confirmed that search results pages on desktop will no longer show text ads in the right sidebar. Instead, as many as four text ads will display above the organic listings, and three text ads will show at the bottom of the page.
There will certainly be a lot of analysis to come on what this change means for clients— impressions, CPC, CTRs, average position and so on. Here’s what we know so far about the move and how it affects your PPC account.
What Exactly Has Changed?
All of the changes confirmed on Friday pertain to desktop search results on Google.com and Google search partners only. Mobile searches never had right sidebar ads, so mobile remains unaffected. This move also aligns Google’s mobile and desktop experiences and opens advertisers up to new ad structures as well.
There are a few elements included in the changes to desktop results:
- No text ads will be served on the right rail of the search results on desktop.
- Google will serve four text ads instead of three in the mainline area above the organic listings for more “highly commercial queries”.
- Three text ads will show at the bottom of the SERPs.
- The total number of text ads that can appear on a SERP will shrink from as many as 11 to a maximum of seven.
- Product listing ad blocks and Knowledge Panels (sometimes with ads, as tests continue in these spaces) will show in the right rail on relevant queries.
These updates are confirmed and rolling out permanently worldwide on both Google.com and search partners — though not all search partners offered sidebar inventory to begin with.
What Does This Mean For Your Cost-Per-Click, Cost-Per-Acquisitions and General ROAS(Return On Ad Spend)?
Many are predicting that fewer ads will lead to higher prices due to supply and demand theories. Some are predicting that, while those few advertisers that have those large budgets are busy bidding on those top spots, the tier two and three advertisers will see a greater return on ad spend from ads at the bottom of the page.
Some experts expect to see no impact on AdWords auction dynamics (clicks, impressions, CPCs, etc.) at all. They believe the only ‘loser’ is organic search which is completely gone from above the fold space on desktop for any commercial query.
There are also incremental benefits to paid search from the change, for example, now all ads can use call-out extensions, sitelink extensions, location extensions, etc., which were previously only a benefit of top-of-page ads. And the ads appear ‘more native’ which may have additional benefits.
Google has also confirmed that extensions, such as sitelinks and callouts, are expected to impact ad rank. This means that if two competing ads have the same bid and quality, the ad with the better expected impact from extensions will generally appear in a higher position than the other. This will give advertisers opportunities to level the playing field with carefully crafted secondary messaging in the form of extensions.
The truth of the matter is, that it’s simply too soon to tell how this change will affect overall costs.
Finding Your Optimal Position
“So why advertise if my ads don’t show up in the top 4 positions?” you just asked yourself. Well, many reasons. Maybe your top of page cost per click is too expensive for you to see a good return on ad spend to begin with. Or maybe your competitor’s ad position is having a shading effect on your ads, and people are just more inclined to click on your ad when it’s on the bottom of a SERP.
Hypothetically, a top SERP position on Page 2 at a low cost could potentially give advertisers a greater ROAS than before. All this needs to be tested and analyzed on a per client basis before any conclusions can be made.
The Longterm Outlook
Your balance between PPC and SEO is going to be more important than ever.
Several research studies over the last decade show that organic and paid presences can reinforce each other, causing click-through rates to be highest when both are visible.
Studies have also shown that the co-visibility of organic and paid on branded search queries causes a 7% increase in purchase intent and a 13% lift in brand recall. (Brand Lift of Search, Enquiro & Google, April 2008).
Branching out into different channels such as YouTube Display and Gmail Ads will also give a more holistic advertising presence.
If you are concerned about your PPC account and these new changes, please feel free to give us a call at (718) 766-7442.