Google AdWords Update: How It Can Effect Your Campaign

Google AdWords Update

Last week, non-official Google sources announced that Google would be eliminating right hand paid search ads on desktop searches in the coming Google Adwords update. Roll out for this change began on February 19th and continued over the weekend, finishing Monday, February 22nd.

The Facts

Google will narrow ads shown to 3 at the top of the SERPs and ads at the bottom of the page. An additional fourth ad will show at times at the top of the page, for “highly commercial queries” – the highest volume and most competitive search queries. Google had been testing this new layout since 2010 but just recently launched it across all verticals.

The change will affect all countries and languages. Knowledge Graph Boxes and Product Listing ads will continue to appear in the right-hand real estate. In one piece of good news, PLAs, which Google says demonstrate higher engagement than right-hand side ads, will get an additional row of ad space.

Notably, these changes will only affect desktop searches, not mobile.

Implications

Fewer ads displayed with search results will create a much more competitive landscape for advertisers. CPC will increase for the remaining ad space, resulting in a higher cost for impression share.

This change will place a heavy reliance on Quality Score, account structure and keyword selection to ensure that, with the increase in cost, business results can be maintained. Past studies have shown that SERP listings at the bottom of the page have a stronger CTR compared to listings in the middle of the page, so only low engagement areas are being removed.

Certain types of campaigns will feel the impact of these changes more strongly than others.
Lower ranking direct response keyword bidding strategies will be less viable. AdWords accounts that don’t currently follow best practices and can only compete at lower ad positions will see an increase in CPC costs and/or a loss of impression share and a higher required “first page bid minimum.” Overall, small businesses will suffer the most, but everyone will feel the pressure.

TL/DR: Less Real Estate = More Competitive Landscape

Why the Change, and What Can We Expect? (Our POV)

Though the roll out for this change may seem sudden, the shift is based on over 5 years of testing conducted by Google. Google has not yet released an official statement as to why they are enacting this change now, but we can make some predictions. Google has a two-fold bottom line: driving revenue and improving user experience. It’s more than likely that removing right hand ads contributed to both of those goals.

Reducing the number of ads on desktop search results will likely improve end user experience, allowing users to hone in on the most relevant and useful information to their search. However, with higher premium CPC, advertisers will have to have very strong, relevant campaigns to maintain top positions. The change therefore also creates a natural cleansing of low bid, high volume advertisers.

This change also comes at a time when searches are shifting from desktop to mobile devices. The negative impact of reducing the number of desktop ads is therefore far less today that it would have been even a year ago, and as users continue to shift their search behavior to mobile, that impact will further minimize. We also expect to see a bump in organic traffic on desktop searches given there will be less competition between the two channels with the the reduced amount of paid listings.

Smart paid search marketers and agencies may actually stand to benefit from this adjustment. It has become absolutely essential for paid search campaigns to adhere to all best practices and campaign optimizations to compete with the lower ad opportunity on desktop devices. If you have a solid account with a strong Quality Scores on essential targeted keywords, you will likely see an increase in business with this removal of lower performing right-hand ads.

What Clients and Current Google AdWords Accounts Should Do NOW

A few steps can be taken now to get ahead of these changes to the SERPs.

  • Monitor desktop performance: Track your impression share, first page bids, ranking and general performance, referencing the last 30, 60, and 90 days as a benchmark against future campaign performance (normalize against seasonality, if needed).
  • Make mobile bid adjustments: Adjust mobile bids to counteract the necessary increases in desktop bids. Increasing both would not only cover the desktop changes but also add unnecessary dollars to the unaffected mobile placements. Make sure to keep an eye on both to utilize increased spend where it is needed most.
  • Don’t preemptively raise bids: Hold on your bids unless you are losing impressions. Track your impressions by monitoring changes in your impressions share.
  • Utilize the Top vs. Other reports: These reports, which will now illustrate the top ads vs bottom ads, will help monitor differences in performance between the two properties.

Google’s removal of right hand ads from desktop search could potentially be a blow to paid search campaigns, but swift and smart action in addition to a 4th ad in the top position, may potentially result in net gains for campaigns.