What’s Changed, How to Adjust and What’s Coming Next.
If you have been advertising with Google for the last few years you have seen a flurry of changes, but probably not one that is quite as significant as this. When you search google now you will notice that on most searches that are of “commercial intent“show 4 ads at the top of search results and zero ads on the right sidebar of google search results. Every time google makes a change in the layout of ads like this it is for 1 of 2 reasons. Either they want to improve the search experience because it is their flagship product or they are attempting to boost their revenue generated from ad clicks. We know that no one admittedly likes ads, so these changes are most likely to serve the later agenda.
So how does this change affect the advertiser? We have been monitoring the effects closely to better advise clients and would like to share data we have collected from some of our top performing campaigns pre and post “4 pack” since Feb 23rd, 2016. Several thoughts went through my head as theories I had on what this would do. Would our click through rate decrease because there are now 4 ads instead of 3? Is the cost per click going to go up on the same keywords because now people will have to bid higher to get top placement? What is going to be the effect on my organic click through rates? The best way to answer these questions are with cold, hard data. So here it is.
We explored data over several campaigns and saw similar effects to the ones we are presenting here. We wanted to make sure for the test that the keywords we are measuring have at least 4 advertisers bidding for position and one that was performing well before the changes. Also that nothing as far as quality score or max bid was changed. Ok, let’s take a look at a single adwords promotion that was running through the changes. With nothing changed on this ad here are the results. There are two lines on this report because we did change the landing page during this time but ad copy, extensions, bid, Q-score and position remained the same.
Ad report for transactional beauty procedure keyword-
Our click through rate decreased by about 5.5% and our CPC increased by 6.76%
What do we know?
Many of my initial thoughts were correct. Let’s start in the first column. Our click through rate (CTR) prior to the change was 7.71% and 7.28% after. This is a 5.6% lower CTR, for the top spot in adwords. So one thing to note is that we were mostly holding the top spot in adwords during this time, and it seems to be that during this time adwords got more competitive and the click share spread out a bit. Where those clicks may have gone is still a question. Logically thinking they are getting spread amongst other advertisers and the change has shifted the behavior of people that click on ads a bit. Other data suggests that not as many mobile users are choosing the top position in this time period.
With this change Google has almost undoubtedly taken more click share away from its organic listings as well making the AdWords “pie” a little larger, but also adding more mouths to the table unproportionally. There are generally 2 types of people, those that don’t mind ads or don’t recognize they are ads and will click them. The other type are those those that ignore ads at all costs. I think with this sneaky transition they may be converting a small percentage of the non-ad-clickers into ad-clickers by making these ads more friendly/relevant.
The CTR on mobile devices for the #1 spot decreased by 13%. That is 13% less people clicking on the #1 ad spot on their mobile phones. My opinion is that now when you search these queries on mobile the fact that the entire screen is blatantly ads has been a turn-off prompting me to scroll down even faster than before. On desktop it doesn’t feel as obtrusive. When you are searching for something your intent is to find the best alternative. When all you see are things like save money now, and “call today!”, you don’t feel like you are making that choice unless its a good offer. That being said advertisers should be careful that if they have strong call to action you should have a strong offer to go with it in a competative space. It can’t just be: business name, we want your business, call us! You need to offer a real value to consumers and have a plan behind this funnel. Or just wing it and see what you get but it’s not going to yield much when done like that.
Our overall cost per click (CPC) went up 6.76%, so we are paying that much more at the end of the month to maintain the same spot.
How to adjust post 4 pack implementation:
Well, as an advertiser in a competitive space you may have taken a minor blow in the form of a 7% rate hike. These types of changes always reignites the conversation of what are you doing to ensure consistent performance, brings up the need for good testing. The good news is there are ways to lessen this blow in many cases. There always seem to be new ways to optimize campaigns, landing pages, and test your own conversion rate optimization methods. I recommend to review your campaigns, ad groups, ads, ad extensions and targeting settings. If you are a novice in the space you may be better assisted by just hiring a PPC agency to help with this channel.
For mobile, based on these findings, I would recommend testing bidding that puts you in the #2 or #3 position in mobile for a short period of time. Maybe eliminating your bid-increases on mobile. The reason for this is that prior to these changes it was pretty clear that #1 on mobile was the best place to be, however now a 13% decrease, you should test if you get a higher CTR at a lower spot and may save some money in that area at the same time.
Ad Extensions. One thing you should have been doing before, but is even more important now is the use of ad extensions. Google wants to show ads that not only bid high, and link to quality pages, but also an ad that looks attractive and supplies the best information. Google is constantly adding new features that give you the ability to add extensions or make your ad larger and more attractive. Google is also experimenting with how they display this info in everything from font, size, color to placement etc.
Here is an example of ad extensions on a commercial term and how they are displayed. It is easy to see they make the ads larger and more informative than the basic ads in position 2 and 3. You should apply the ad extensions that make the most sense for your campaign and your product.
Another thing to do at this time is to make sure you are testing landing page design and ad copy, and getting competitive with your offers. Think about promotions if you aren’t running them now. Think about lead bait or other value you can add to your audience that you aren’t providing now. Think about advancing your strategy and your tracking technology.
But how should you adjust your organic strategy? Well this might light the fire to start talking about your longtail or blogging strategy. It is also a good time to review your title tags. You are competing with people that are creating eye catching headlines for their PPC ads with your organic listing. Your title tags should be evaluated as to how attractive they are to searchers and how they might compete with your competitors.
Whats coming next?
Google has confirmed at SMX this year that they will be launching 1 ad spot in the local organic 3 pack of results. This is going to hurt organic marketers efforts even further. They started with showing 1 ad on google maps results about a year ago and now they are showing 2. I don’t know if you will be able to have 2 ad spots on page 1 or if they will give the now 5th ad spot to a 5th advertiser. I do know that to enable the maps ads right now, all you need to do is have an active location extension on your adgroup or campaign ads.
Bright local, one of the leading local SEO tool providers has done a survey amongst over 600 people on what they would click on and here are the results. Basically some people would click on it, why not, if it’s a local business it has good reviews?
What we learned.
Google has once again managed to squeeze more revenue out of their search results page layout and ads are becoming more dominant for many reasons in search results. I think this increases the argument for using Google Adwords and it definitely strengthens the argument for integrating Adwords into your internet strategy if your target market is there.
The more native feel of the ads over time could potentially lead to a better conversion rates for adwords customers also so it isn’t all bad news. If you are using it.
We would like to hear your reaction to this layout if it is something you have noticed and how has it influenced your behavior and/or marketing results. Chat with Brandlift on facebook and like Brandlift Digital Marketing .
