Only a few weeks old, the biggest change in Google’s Adwords platform for many years is causing some concern for large and small advertisers who fear increased CPC prices. In a nutshell, Google has removed the ads on the right side of their search engine results page (SERP), increased the number of ads above the search results from three to four, and left places for three to four ads at the bottom of the SERP. Overall, the total number of ads on the SERP has been reduced from 11 to 7 as shown in the image below:
In addition to affecting advertisers, this change continues Google’s relentless SEO squeeze, dropping organic search results still farther down the search page. But SEO impact is a topic for another post – we’ll focus on search advertising impact for this discussion.
There’s lots of speculation as to why Google made these changes and how it affects the advertiser. Here’s what Max Lawson, Google’s Performance Ad Manager had to say about the change:
“Combined with the ads that appear below the results (which are unaffected by this change), a maximum of seven text ads can show at any one time. This is down from the previous maximum of 11 ads when including that right rail.
Ultimately, we are making this update to improve the user experience on Google Search and to make that experience consistent across desktop, tablet and mobile. In fact, the majority of our searches happen on mobile these days, which has no right-hand-side ads.
Over time, we’ve found that text ads on the right rail were simply less useful than we’d hoped. In direct terms, users didn’t click on them as much as other ads — and when users don’t click on things, we take that to mean that something wasn’t what they were looking for.
By showing fewer ads, our search experience matches how people actually engage with Google. And, because ads above the results are generally more useful, we’re expanding them for highly commercial queries. (Interestingly, as an aside, PLAs demonstrate strong user interaction when they’re on the right side, so they’re staying put.)
Our experience on mobile, as well as extensive testing on desktop, led us to the conclusion that this change would benefit our consumers who increasingly search across devices. And that testing has given us lots of data about how this change impacts ad performance.”
Max goes on to describe a neutral impact on the majority of small advertisers, and no impact on the auction process. This would be welcome news if it turns out to be true. Many advertisers worry that fewer number of ad slots mean increased competition, and ultimately, higher costs per click.
Google stands to gain in many ways from this change – among them:
- Even though Google says that there is a neutral impact on advertisers, not even Google can change the laws of supply and demand. They would obviously benefit from any rising prices per click that would occur.
- The possibility of increased ad competiton and higher CPC will drive some advertisers to consider other less costly parts of Google’s advertising empire such as You Tube, Gmail, and the Display Network.
- Google will fill the vacant right hand rail with some form of advertising that will be more profitable – such as more Product Listing Ads, or perhaps voice activated purchasing.
- The user experience on mobile and desktop is now the same, and the consistency simplifies ad platform look and feel for the advertiser and the user, encouraging more use of the ad platform.
5 Tips For Dealing With The New Adwords Platform Change:
Advertisers will be pleased to know that even with a change as large as this, the things that need to be done to be competitive without right side ads have not really changed that much, they are just more important. As you read through the 5 tips below, it’s important to understand the most important Adwords Performance Formula – shown in the image below:
- Focus on quality score. Higher quality scores means that you’ll pay less for your ads, and get rewarded with higher ad positions. Target for placing the ad in the top 4 positions. The 3 at the bottom of the search page will not reward many advertisers.
- Know the “how you spend” numbers. In addition to outcome metrics like costs, clicks, and conversions, pay close attention to CTR, cost per click, cost per conversion, and quality scores. These metrics over time, will help detect changes and trends related to the new Adwords’ platform revision. They’ll help you make budget and campaign setup decisions.
- Continuously improve campaign elements. More than ever, you’ll need to spend the time to optimize your Adwords account, campaign settings, keywords, ad groups, landing pages, and ad copy. Reviewing performance and making adjustments on a weekly basis can drive more traffic and leads to your business because of higher ad positions, greater CTR, and lower costs.
- Become an expert bid adjuster. Adjusting bids to favor high performing campaigns, ads, and keywords is an optimizing science in itself. In general, you want to delete or pause any of those elements that aren’t performing and bid higher on those elements that are doing well. This also includes adjusting bids for mobile vs. desktop ads based on performance. Google offers some useful tools that will automatically adjust bids for maximum clicks, or conversions, or manage budgets across multiple campaigns.
- Maximize extensions. Ads previously on the right side could not show extensions – extra real estate for additional information about the advertiser’s business. Now that ads are shown only at the top and bottom positions, they are eligible to show more extensions, providing a more visually and content impactful ad at no additional charge. Make sure that your campaign is setup to take advantage of all possible extensions.
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Finally, here’s a few words of encouragement from a study by pathinteractive.com
“An interesting insight we discovered while analyzing our clients’ campaign performance is position 3 and 4 top of page ads actually have better CTRs than side ads overall (that’s a weighted average of the entire sidebar, not just top right rail vs those 2 slots). Right rail ads don’t have sitelinks, callouts, reviews, or other rich markup – so they look very different from the top/bottom ads. By only using wide ad formats, all the ads now have a similar feel.”
Visit our site at b2bresourceteam.com/adwords or contact us at 941 256 2229, to learn more about Adwords management