The new view
Why did Google remove the ads?
Richard Hartley, PPC Director at Jellyfish
These days, Google is ‘mobile first’ due to mobile searches beginning to overtake desktop searches, and this move makes for a similar user experience across both.
With fewer sponsored links, the overall quality should improve. The lowest position links (9,10,11) are the ones Google has deemed least likely to appeal to the user, and so removing them means that the quality of the remaining links is improved.
When there are fewer positions advertisers will have to bid more to get on the first page, and there’s much more incentive to hike bids to achieve position four.
Dan Arad, Director of Product Management at Kenshoo
The decision likely comes as a result of continuous testing. As consumer behaviour evolves, it’s important for publishers to consider the user experience, how it can be bettered, and how ads can be most effective.
From an industry standpoint, Google is not the only publisher that has been experimenting with the number of ads and placements within the consumer experience.
Facebook for example, has also adapted its desktop advertising, reducing the number of Newsfeed ads to improve relevance and quality and redesigning its ads in the right-hand column.
Kate Watts, Head of Bid Media at RocketMill
It will give Google more room to promote things such as PLAs (product listing ads), which should benefit positively from this change.
It could also use the additional space to capitalise on other features in future.
Marcus Knight, Head of Paid Search at 4Ps Marketing
Sidebar ads have always suffered in terms of click-through rate (CTR), which for me was probably the biggest factor.
If users are not interacting with an element of the Google experience, it makes sense that they would remove it.
While this smaller ad may seem like it will result in more money, it will push some people out altogether as the return on investment (ROI) on clicks may stop making sense.
Ultimately those three or four top ads will cost more as more advertisers vie for the ad space there.
How will this impact PPC campaigns?
With fewer ad slots available, impression levels will decline, and we expect keywords with higher traffic to become more competitive as brands invest in making sure they appear in the top spots.
This will be especially significant for popular head terms.
As a result, it is likely CPCs will increase for those spots, although only desktop traffic should be affected.
Although impressions and traffic may decline, expect clicks and overall click-through rates (CTR) to increase as ads on the top of paid search results have historically received significantly higher CTR than ads on the right.
People on the cusp of positions four and five will be forced to increase their bids, or fall to the abyss that is the bottom of the page.
Bids being raised in lower positions will have a knock-on effect up the SERP, raising the prices of higher positions too.
For brands with a more modest advertising budget, it will limit the use of prospecting and generic keywords that were previously used when bidding for right hand side ad positions.
Brand campaigns are going to be increasingly necessary as the four adverts at the top of the SERPs push organic listings down even further, so there will be more of a need to bid on your own brand to fend off competitors’ paid ads.
The change will push the top organic link down the page – below the fold on some screen resolutions – and make it much less likely to be clicked on.
Do marketers need to do anything differently?
Whilst preparing for higher CPCs is a sensible action to take, I believe more focus should be placed on driving better quality advertising going forward.
User-centric ad copy, relevant landing pages, and a well structured account are all must-haves if you want to succeed in the newly updated market place.
In short, all of the best practices we strive towards currently become even more important now are competing for fewer ad spots.
Make sure you are checking all keyword reports and removing (or adding negatives) keywords that do not serve you well, and add in exact matches of keywords really working well in their own separate campaigns with their own daily budget.
One thing I hope this change will do is convince businesses to take end-to-end tracking of sales more seriously and to re-evaluate their attribution modelling.
While there are several models (flat, last click, first click, u-shaped), the truth is more complex. Simplistic attribution modelling risks incorrect decisions being made based on flawed data.
Make sure you understand your users and their journey to, and through, your site.
Those advertisers with smaller budgets are likely to have to adopt new strategies, as bidding on short-term keywords will become too costly for them.
instead they will have to shift their focus to niche and highly relevant longer tail searches instead – in essence, far more thought will have to go into these strategies as the option to bid lower and appear in position five or six will be made redundant.
What remains to be seen is which competitors will increase bids in a kneejerk reaction, and if savvier advertisers will be able to ride out competing with advertisers who are not as shrewd.
As a result of the change some advertisers may choose to diversify their programs across publishers and channels to maintain overall CPC levels.
What do you think about the move?
Will it impact on your PPC activity? Let us know in the comments below…