Google Right Side Ads Banished From Paid Search Results

24 February 2016

Google Right Side Ads Banished From Paid Search Results

So Google’s done it again! Busting out a significant change to the search results page with no insightful explanation as to why they've done it. This time all right hand column ads have been banished from search and a fourth ad position has been added to the top of page results (sometimes). Google consistently runs dozens of tests on the results page, however this is definitely the most significant change we’ve seen in years.

Why the change?

Currently, there’s quite a bit of speculation around Google wanting to standardise the advertising ecosystem across multiple devices. Google may also want to pave the way for Google Shopping Ads and knowledge panels; considering how the meta search functionality has become more integrated with verticals such as hotels, flights and other niche sectors.

Whatever the speculation it’s clear that the change will only serve to increase Google’s profits, it's simply a question of demand and supply. Over the past 3 years’ desktop cost per clicks (CPCs) have been increasing but at a relatively slow pace. In reducing the supply of ad real estate, in one fell swoop, Google has increased the demand and competition for the limited space. As a result, it’s likely we’ll see a significant increase in CPCs in the days, weeks, and months ahead.

What does this mean for advertisers?

It’s really early days, however it’s inevitable that CPCs will increase. This will have a knock on effect on all cost and revenue related metrics. Advertisers who optimise using positional bidding (bidding to appear in lower positions while maintaining the same level of traffic/conversions) may not have as much opportunity to do so as there are simply less ad positions to bid for. We can also expect Google to monetise this space using Shopping Ads, PLAs, knowledge panels, or other meta search features.

It's always the kids that suffer!

Advertisers who rely heavily on organic traffic may be faced with an even bigger challenge. More sponsored results at the top means organic results get pushed down further, which also increases the competition on organic. It’s a bit of a ‘catch 22’ as increasing CPCs makes organic visibility more crucial now than ever before.

What can brands do?

Before making any drastic changes, monitor both PPC and organic performance to understand what this means for your brand. There’s no telling how this will play out (except for the CPC effect) so you should be talking to your search agency about the planned strategy.

Depending on your niche, it’s advisable to make use of Google shopping ads, knowledge panels and other Google features that will enhance your brand’s visibility. If budgets are limited, ensure you’re focussing on the highest converting, best performing keywords. This would ensure you maintain your brand exposure of the highest converting areas in your account. If all else fails, call DBD!

It would be interesting to see how competitors react to this change. In a landscape where CPCs can be judge, jury and executioner other paid media may present alternative opportunities to ensure incremental traffic. Watch this space!