Google Killed Right-Side AdWords Ads. How Much Should We Worry?

Topics: SEO, Web Marketing

In February, Google made a major change to its search results pages (SERPs). The simple explanation is, they did away with the paid text ads—up to eight of them—located to the right of the organic search results.

Paid ads still appear above and below the organic results. And product listing ads (PLAs) can still appear to the right. But a significant fraction of available impressions is gone.

Advertisers are understandably concerned, and the pay-per-click (PPC) blogosphere was immediately abuzz.

Let’s look at the changes and some of their effects—after we address the simplest question of all.

Why?

Why did Google do this?

In a word, revenue.

And probably some data-driven desire to improve the user experience—or in other words, revenue.

For now I’m willing to keep an open mind. And as a user, at least, the cleaner results page may already be growing on me.

What We’re Seeing

I ran many test searches, using a variety of search queries (keywords) and examining the results. Here are some observations.

First, it’s true. The right-side results are gone. The only paid advertising over there now is the familiar set of product listing ads (PLAs). In some cases even they appear above the organic results. When this happens, I see only two text ads after them, instead of three or four.

Second, Google reps have said that, when the search term is “highly commercial,” there may be an additional ad above the organic results, making a total of four. Think “Las Vegas hotels” or “where can I buy ridiculously expensive shoes?”

In my tests I saw that fourth top ad so often that I suspect “highly commercial” actually means “offering the slightest hint that the user may have a credit card within reach.”

Third, below the organic results—of which there are more now—I saw up to three additional text ads. These aren’t new, but some observers are writing as if they were. I want to say that this shows us how often people look down there—we don’t—but it’s not that simple. Industry chatter says that, before the big change, the bottom ads were less dead than the right-side ads in many cases.

In my tests, there weren’t always ads in top positions, even when there were ads in bottom positions. This suggests that Google still has an ad rank threshold which auction-winning ads must clear to be in top positions.

When I saw ads in top positions, sometimes it was two or one, not three or four. This means that the organic search results aren’t always pushed further down the page than before.

Fourth, not all the text ads I saw had extensions—sitelinks, callouts, and the like—but I saw ads with extensions in each of the available positions, top and bottom. So extensions just got more important. As before, they get less space in second position and below, but they’re there. No doubt they will help ads in the bottom positions too.

Here are a few sample queries, with notes on my results. Your results may differ.

Key Largo vacations: four ads on top, followed by map and local results, followed by organic results, then three ads on the bottom.
Exotic plants: no ads anywhere, top or bottom.
Exotic plants for sale: four ads on top, three at the bottom.
Buy Dell laptop: PLAs and two ads on top, one at the bottom.
Writers workshops Utah: none on top, three below.
AdWords consultants: four on top, three on the bottom
Presidential candidates 2016: no ads anywhere.
Presidential candidates 2016 t shirts: none on top, one at the bottom, PLAs on the side. (The second time, the PLAs were on top.)

Is It Time to Worry Yet?

As soon as we learned of this change, I began telling clients to watch, not worry. But now that we’ve had a couple of months to evaluate the change, is it time to worry? If so, how much?

Generally, no, and not much—with exceptions to be noted below.

As with any change, attention and patient analysis are warranted. But hand-wringing is still premature, at least for the vast majority of advertisers. This is not the Zombie AdPocalypse, the SERPocalypse, or the obvious prelude to invasion by hungry space aliens.

This rapid, worldwide change may seem sudden, but it’s not a huge surprise. Google had been conducting small-scale experiments for a while, eliminating right-side ads on search results pages (for months), and increasing the number of ads in top positions (for years).

Bear in mind that this change only applies to desktop computers (and tablets, which Google treats the same), which is less than half of search traffic. Positions lower than two or three were already more or less irrelevant on handheld devices (smart phones), and this change increases uniformity between desktop and handheld search results.

Further, we’re only beginning to see how advertisers and users are responding to the change. So it’s still impossible to foretell precisely how the AdWords landscape will appear next month or next year. (And that’s assuming Google doesn’t change anything else in the meantime.)

Observations and Possibilities

In e-commerce, shopping ads already dominate other paid ads in most cases, and they’re still on the right side—except when Google tests them on top, as noted. So it’s reasonable to expect this change to have more effect on lead generation, which happens to be where most of Axis41’s PPC clients are.

A quick survey of lead gen clients I manage shows the following, and I’m hearing similar reports across the industry.

First, some notes on how things looked before the change:

• Between 30% and 60% of impressions in January 2016 were not in top positions; most of these impressions were on the right side, not the bottom, because we typically bid up.
• Only 1% to 5% of clicks have been on ads in right-side or bottom positions.
• Therefore the click-through rate (CTR) for right-side and bottom ads was much lower—in the neighborhood of one-tenth to one-thirtieth the CTR of ads in top positions.
• However, even when we were mostly targeting top positions, right-side impressions had some value. In several of the accounts I studied, the conversion rate was higher among those few, cheaper clicks on lower ads than with ads in higher positions. I’ll be watching to see if this continues with the bottom ads.

So what do we expect, and what are we seeing?

There are far fewer available impressions on the page. Where we’re not bidding for top positions, we’re seeing the expected drop in impressions. Where we are bidding for top positions, the change is negligible. In e-commerce we may actually see impressions increase, because of that possible fourth ad on top, but I don’t have enough data to prove that yet.

So far, we’re not seeing sharp decreases in clicks—perhaps mostly because we’re bidding for top positions. Looking at actual data in actual accounts, it’s still too soon for me to tell whether we’re seeing enough clicks on bottom ads to compensate for lost opportunities to the right.

All in all, trading a lot of ads with low clicks (on the right side) for a few more ads with higher clicks (that fourth position on top)—which I have to think is good for Google—is probably good for most advertisers too.

Competition—as measured by budgets and cost per click (CPC)—could go two ways, and probably will. As some advertisers feel increased pressure to bid for top positions, CPCs will likely increase — not that they weren’t doing that already. But with more ad positions on top, getting on top could tend to get slightly cheaper. In a given instance, either of these opposing forces could prevail.

Where CPCs do increase, or advertisers simply expect them to, some competition may be pushed from AdWords onto Bing Ads or other platforms. Conversely, some advertisers may pull budget from Bing Ads or elsewhere to fund higher bids in AdWords. So the effect of this change on Bing Ads will also depend on the balance of opposing forces in each case.

In the end, to get the most out of a smaller ad inventory and possible higher costs, best practices are a bit more important today than they were yesterday. Then again, wise use of extensions, careful attention to click-through rates and ad relevance (in other words, quality score), ongoing testing, and landing page and conversion optimization were already important.

Where the Change Matters a Lot (in PPC)

The disappearance of right-side ads has dramatically altered strategies aimed at gathering cheaper clicks from lower positions. I’ve used such strategies occasionally in the long term, where budgets were limited but ads in the higher positions on the right side (say, positions four through seven) converted affordably. But I also do this temporarily in new accounts or new campaigns, aiming for an average position of four or five (on desktop) until I start to see what’s working. Then I’ll push for higher positions where it makes sense.

I’ll be watching the data and possibly rethinking this. In principle, it could still be done by targeting ads below the organic results, but, like the rest of googling humanity, perhaps, I am still suspicious of those bottom ads.

For now, if I want people to see my ad, I’ll aim for position three (or four, if the search term is about buying stuff). If my suspicions about bottom ads prove unfounded, I’ll be happy to reconsider.

Where the Change Probably Matters (in SEO)

There aren’t always three or four ads above organic results. But it seems likely, on average, that organic results will be pushed further down the screen, as advertisers respond to this change and the first four positions are more often occupied.

Here, again, there is an opposing force: there are now more opportunities to get organic results on the first page. Google is displaying more organic results on the first page than before.

Every SERP is different, and every screen is different, but if the new tendency is to push all but the first organic result, or maybe the first two, below the fold, then being in one of those first positions just got that much more important, and positions three and below just got less relevant.

…Unless people develop ad blindness. So there’s a possible opposing force here, too. If we all get in the habit of scrolling automatically past a screenful of ads to get to organic results, then the organic results will be more visible than they were before, and the paid ads at the top will be less effective.

Again, much depends on user and advertiser behavior in response to these changes. So we wait and see.

Full Circle

We end where we began. It’s a significant change, but it’s not the end of the world or even the beginning of the end. As we have always done before, we watch our metrics and adjust accordingly. We adopt (but measure) best practices. We optimize. We test. We analyze.

What are you seeing? What do you expect? Share your thoughts with us on Twitter at @axis41.

This post was written by David Rodeback, the Enterprise PPC Manager at Axis41.