Google is making some significant changes to the search engine results page (SERP). In summary:
- Right-hand side text ads will be eliminated on Desktop (Product Listing Ads (PLAs) will continue to serve on the top and right)
- Google may show four (vs. three) top-sponsored ads for a small number of “highly commercial queries”
- Up to three bottom ads may still serve on Desktop and Tablets
Google has been testing this new experience since December, and is currently rolling it out to all search pages worldwide, in all languages.
WHY IS GOOGLE DOING THIS?
Google never makes a change—let alone a significant change like this—without intensive testing. Google has decided that this new layout will help searchers find (and click on) more relevant ads, especially for high-volume, commercial queries. In an era where consumers are more likely to actively avoid non-engaging ads, Google is solely focused on providing the most relevant experiences to its users. The result is a search page with fewer, more relevant ads. At the same time, Google has likely determined—through testing—that the change won’t impact paid click volume.
IMPLICATIONS for BRANDS
Paid Click Volume
Advertisers that are willing to compete in the new auction aren’t likely to see any decrease in click volume. Searchers generally don’t click heavily on right-hand side text ads. Major advertisers know this and adjust bid strategies to favor top-sponsored ads vs. the right rail. Furthermore, top-sponsored ads have always been the most click-worthy, as they include various extensions (sitelinks, reviews, third-party endorsements, images, etc.). Any light right rail traffic will likely migrate to the top-sponsored positions (or any ads below the organic results, which will still serve).
Cost-per-Click (CPC) Dynamics
Now that advertisers are competing for fewer above-the-fold slots, CPCs could rise, at least as the marketplace sorts itself out in the short-run. Less inventory generally equals higher prices. However, as smaller advertisers may sit out, CPCs could stabilize in the longer run.
Product Listing Ads (PLAs) Prioritization
With fewer ads, advertisers will have to decide if they’ll compete, or sit out completely. Previously, there was room for everyone. This may mean that larger brands dominate the paid search results going forward. It also increases the importance of PLAs, which remain a highly visible paid opportunity for brands. PLAs give advertisers the opportunity to serve highly visible and image-rich ads on the top and to the right of the search page. Some advertisers may now focus more on the PLA format if they can’t compete in the regular paid search auction.
Owned-First & SEO Strategy
This change highlights the importance of taking an owned-first, integrated organic/paid search approach. If you’re running organic and paid campaigns in conjunction—you can adjust paid search strategy in highly competitive and expensive auctions in instances where you have high visibility for certain generic keywords.
Relevancy & Intent
This change aligns directly with the need to understand and cater to consumer intent. Google’s goal is to create a search page with fewer, more relevant ads, which makes perfect sense in this era of consumer ad avoidance. For advertisers to succeed on this new page, they must create the most engaging experience. There’s no longer room for mediocre experiences. Quality Score will become more important than ever, and could be the difference in whether your ad shows or not. Furthermore, Quality Score is a tool advertisers can use to reduce costs, perhaps amongst rising CPCs. To improve Quality Scores, advertisers will have to squarely focus on providing highly relevant copy/creative aligned to consumer intent, as well as landing pages that minimize bounce rates. This requires a renewed focus on understanding and catering to your consumers, in-the-moment, with engaging ads and landing page experiences.
With the risk of CPCs rising, advertisers must manage campaigns to an ROI, very closely. Sit out of auctions that become inflated in price. Efficiency is more important than ever.
Performics will pay close attention to these changes as they roll-out, and we’ll provide an analysis of any click and CPC impact. We’ll also provide any updates as Google makes them public. If you have any questions regarding this change, please reach out to the Performics team.