As Google Partners Verve is always at the forefront of all things Google and this is no different! We spoke to Google after this recent change and they informed us “our research suggests CPC should not be affected”. This relationship with Google also allows us to give away £75 free advertising credit! To find out more click here.
As you may or may not know the industry has been rocked recently by the news that Google had altered its search engine results page (SERP). A change that removed all Google text ads from the right-hand column.
As you may have noticed the text ads in the above example accommodate the first 4 positions. This will not always be the case, but for many ‘highly commercial’ search queries 4 ads will be displayed instead of 3.
Below the fold, the SERP’s are now displaying 3 ads at the bottom of the page where previously many search queries showed only 2.
When we spoke to Google they came back with the following:
“We have been testing this layout for a long time, so some people might see it on a very small number of commercial queries. We’ll continue to make tweaks, but this is designed for highly commercial queries where the layout provides more relevant results for people seaching and better performance for advertisers.”
Although text ads will not be displayed in the right-hand column however, eCommerce related search queries will sometimes utilise the space to show product listing ad boxes (Google Shopping results) and many local search queries will return business information in the right-hand space from the Google Knowledge Graph.
As you may have noticed the above example shows 3 text ads and not 4. This is because Google does not deem this to be a highly commercial search query.
The change rolled out on Friday 19th February 2016, some early birds may have seen the changes slightly before but for the majority of us last Friday was when the new layout was first evident.
There are two consistent reasons that the industry believes are behind the recent changes from Google. One, theory based reason, is that the average click through rate from the right hand side text ads is poor, so poor that Google believes the increase in CPC by removing the right hand ads will be more profitable in the long haul (more demand for top 3 or 4 positions). The second reason, which is more inline with Googles movement towards a more consistent user experience, is that desktop search will more closely mirror that of tablet and mobile devices.
The why in this case is less important and more focus should be placed on how this will affect your account.
For non-eCommerce related search queries, Google Shopping will become very important. Accounts with text ads previously occupying ad positions 5-10 who do not currently run Google shopping ads will be making quick moves to ensure they advertise with Google Shopping as these will be the only eCommerce related ads occupying the right hand column.
If your ads are currently non-eCommerce related the knowledge graph will become more important for local business services. The whole text ad environment will also become more competitive as less text ad space means any available space has a higher worth (data obviously still pending to prove this as factual).
We don’t know for sure what will happen to average CPC’s until enough data is gathered across multiple verticals to accurately analyze, however, it is strongly speculated that CPC’s will increase as a result of an increased demand for a reduced advertising space.
In some cases previously it was possible to compete with big brands in Google Adwords, again it is only speculation at this stage, but competing with big brands for only 3 or 4 positions (above the fold) will become very difficult for SME’s with rigid budgets. There is, of course, an increase in the available ad space below the organic search results, but how much demand will grow for these positions, or fall for that matter, is yet to be confirmed.
What is clearly evident by the increase in paid advertising space in the main page column of search results is that organic results are being pushed further down the page. The focus on organic search results for marketers has now increased greatly and so has the correlation between paid search and organic results. It will be interesting to see what effect these changes have on the click through behaviour of Organic results in comparison to Adwords.
Time is yet to tell how much of an effect these changes will have. Most assumptions are simply that at the moment, purely speculation. Close monitoring of all accounts is a must during the early stages. If you manage your own Adwords account at the moment ensure you are monitoring average CPC’s across all verticals (Text ads & Shopping) in order to spot positive or negative effects. If an agency is managing your Adwords account they should already be handling the above and more, but it is certainly worthwhile checking to make sure they are.
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