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Changes to Google AdWords Strike Fear in Advertisers

February 2016, Google unveiled major changes in its lucrative Adwords platform. The search giant is no longer showing ads on the right side of its results pages (SERP’s) and has instead replaced it with 4 ads at the top of the page and ads at the bottom of the SERP. This has without a doubt stirred its fair share of panic and doubt for many advertisers who count on PPC as its primary source of web traffic and lead generation.

 Here’s a summary of Google’s AdWords/PPC changes

  • Google is removing right-hand ads except for product listing ads, which will continue to be displayed above and on the right side of search results page
  • Google may show 4 ads rather than 3 for what it calls “highly commercial queries”
  • Ads will continue to be shown below organic search results

The million-dollar question asked by most advertisers this week is “How will these changes impact my online business and what affect will it have on my Cost Per Lead?” Truth be told, I too had my doubts and concerns as to how this would affect our digital marketing business as PPC is a big part of our portfolio and most of our clients have been blessed with PPC success. After many hours and dozens of conversations within our WSI network of consultants the following was concluded.

1.We expect Google CPCs to rise for most advertisers.
With the elimination of right side ads, advertisers that want visibility beyond the bottom of the page will be forced to increase bids in order to show in ‘top of page’ ad results.

2. Daily spend at Google may get volatile.
Fewer available ad positions on the first page and higher CPCs mean it will be difficult to control spend at Google for small budget advertisers. ‘Top of page’ ads with high CPCs will consume ad budgets quickly, and ads below top page results will see significantly less traffic.

3. The importance of Search Engine Optimization (SEO) will also increase.
With no ability to show ads on the right side of the search results page, ‘top of page’ ads and top ranked organic results will see an increasing amount of traffic.

The Good News For PPC Advertisers

The flip side…It’s widely accepted knowledge that the top three PPC ads at top left centre of page have always accounted for about 80%+ of PPC clicks. Now, we will have up to 4 ads in the top left centre of Google SERPs, which surely means that the total contribution to PPC traffic from this area will increase to 85-90%. More good news is that all ads can use call-out extensions, site-link extensions, location extensions and so on, which were previously only at the ‘top of page’ ads.

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WSI’s very own head of Paid Search and Google Top Contributor Jack Porter Smith also had this to say about the recent changes last week.

  1. Ads on the sidebar always had lower CTRs (click through rates) because they appear further down the page and have less content-rich appearances (i.e. less opportunity to show site links, call outs, call extensions, review extensions, location extensions, etc.), due to the confined space they operated in. Low CTRs are bad for overall PPC campaign health, so losing these ads is not a bad thing for campaign health and it is proportionately not a lot of PPC traffic.
  1. Ads that trigger lower positions will now show in the new fourth position, which could still be at the top left center of the page, or fifth to ninth position at the bottom left center of the page. For the ads that will now show at the left bottom centre of the page, albeit lower down the page than some of the previous right hand side ads, I expect these ads to have higher CTRs than they previously would on the sidebar because they have more space, which therefore means the overall reduction in PPC traffic will be minimal or non-existent.
  1. Further, the top ad positions will be rotated on queries with very high search volumes. In other words, even though there are only four top spots, perhaps eight to twelve advertisers will share these positions (as it is very unlikely that top 3-4 advertisers could sustain the budget nor ad rank to stay live 24/7 in top positions) which further reinforces the notion that PPC traffic will actually increase as a result of this SERP layout change.

Google very rarely makes fundamental shifts to its SERPs or advertising platform without being VERY sure that it will make more money from doing so. Google makes almost all of its money via PPC ads – and it will continue to do so for as long as its SERPs evolve to make PPC advertisers more successful so that they can spend more money on ads.

Changes like this reinforce the value of working with WSI due to our publisher agnostic approach.

Myself personally and our Pay-Per-Click/PPC team at WSI eStrategies in Ottawa will be closely monitoring campaign performance to confirm the impact of these changes.

For more information on how PPC can help generate leads for your business, contact us today!

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