Feb 27th, 2016
Google Removes Right Hand Side Ads On The Sly
In what has become the Search industry’s water-cooler-discussion of the month (please replace with a local independent Soho latte for me), Google has confirmed that they will be removing all right hand side ads on search results. According to The Media Image, this change has been in the pipeline through UI testing for a while now and has now rolled out globally as of the 19th of February.
While mobile users won’t see much of an impact, this represents a big change for the desktop end user – examples of Google’s desktop search results page appearance before and after this change are shown below. Where you would have a larger number of paid placements to choose from before…
…you are now presented with far fewer choices as the right hand side has become blank.
It is interesting that Google have been testing this and rolled out the feature with minimal fuss and fanfare – I think it shows that they want to present this as a natural evolution of what the search user experience will be like.
What Else Is Changing?
Ads appearing on top of search results will remain as-is, although on what Google calls ‘highly commercial queries’ the number of ads on top can increase from 3 to 4, according to correspondence with TheSEMPost. There will remain up to 3 ads showing at the bottom of each page.
So what exactly is a ‘highly commercial query’? There was no elaboration on this from the official Google response, but it’s not difficult to come up with examples that everyone agrees with regardless of where we draw the line. Very competitive terms such as those involved with insurance (home insurance, car insurance, life insurance etc.) will undoubtedly be among the expanded ad set. Keep an eye out as well for popular consumer electronics queries like those relating to the newest smartphones, and travel vertical keywords such as hotels and flights.
The right hand side won’t be entirely empty all the time, it will still be put to good use – Google confirmed with SearchEngineLand that this space will still be used for the Knowledge Panel on applicable queries as well as Product Listing Ads (Google Shopping ads) or PLAs. This will make those features of AdWords more prominent when they do appear, and this may also foster competition amongst Google Shopping advertisers because PLAs will become more noticeable as the space will be more exclusive to them.
Should We Have Seen This Coming?
Well, yes and no. I speculated when Google rolled out their mobile-friendly update last year that this would be the first step towards homogenising the user experience between mobile and desktop. One of the biggest differences between the platforms was the presence of right hand side ads, so it was possible to predict something would happen to further step-change the user experience – the question was what. While I didn’t expect the change to be quite as jarring as the removal of right hand side ads entirely, from Google’s point of view it does make sense.
I’m also not convinced that it will make a large dent in Google’s revenues, although time will tell here. There will be some shopping related queries where comparison shopping and the clicking of multiple ads can be considered normal behaviour, and here it’s conceivable that having 3 or 4 ads on-screen instead of 7 or more could result in fewer clicks and less revenue for Google. However, my opinion would be that, when looking at aggregate data:
- The average click-through-rate overall on ads above the search results is significantly higher than right hand side ads,
- 4 or more clicks on ads from a single search query represent a minority of users / searches, and the majority of Google’s AdWords revenue comes from those who search and click 1-3 ads,
- The potential inflation of CPCs as a result of this change will also work to counteract any decrease in revenue on these minority queries.
For the above reasons I wouldn’t be very concerned about an impact on revenue at the big G.
How Will This Impact My Paid Search Accounts?
This is the crystal-ball question everyone is scrambling to have a point of view on. The truth is that nobody knows quite yet, because in an auction-based environment a lot also depends on our peers and what advertisers do in reaction to each other.
Based on the assumed thought behind these changes and how most advertisers might react, I can make a few short to medium term predictions:
- Brand searches will largely remain unaffected except for those that rely on distribution networks for their products. Look out in particular for competition between B2B manufactuers who do not sell directly to the public – vehicle dealerships would be a good example of this. Expect wider and smarter adoption of geolocation targeting as advertisers aim to maintain their existing CPAs while cutting the number of expensive auctions they’re involved in further away from their physical stores.
- Comparison shopping websites may have cause for concern because this is one of the most obvious verticals for users clicking a variety of links before making a decision on a purchase. By limiting the number of advertisers above the fold on desktop to four or fewer, businesses that traditionally sit in positions 3-6 on these terms will have their CPCs pushed up as they jockey to cement a top-4 place. Take [life insurance] as an example, where Google’s own keyword planner tool only predicts an average position of 4 or above when a bid reaches Â£18.00!* It’s possible that these advertisers may re-jig their digital plans across other channels to look for places outside of AdWords to find efficiencies.
- Small business will be more affected than established larger retailers as the latter will already have broad keyword coverage in existing accounts, in many cases using features such as Dynamic Search Ads. Prominent examples of advertisers doing this on AdWords for a large range of search terms (not always to good effect either, but that’s for another time) include Amazon and eBay.
* This was done on a ‘fresh’ AdWords account assuming an average Quality Score of 6 – any dedicated comparison website worth their salt will have a better QS than this, but nonetheless the CPCs coupled with volumes on keywords like this are substantial.
To find out more about how this might impact an individual AdWords account, I would recommend first looking at the “Top vs Other” segment on your existing keywords. This segment isn’t used as often as it should be, and now takes on renewed importance – you can use this to find out what keywords in your account generate the most clicks and the most conversions from right hand side ads as opposed to top positions on top of organic search results. This will help you identify the keywords that you will need to be more competitive for by increasing your bids or Quality Score, or accept being pushed at least some of the time to below the fold or first page.
How will Google’s Changes Impact Organic Search?
At the moment this is a bit of an open-ended question. While many have pointed out that the potential increase of three to four results above organic will push organic results further down the page and thus negatively impact organic traffic, I think this will affect mobile searches a lot more than desktop. My reasoning for this is that with right hand side ads present on desktop, a larger number of websites are above the fold.
Therefore, when presented with fewer choices under the new system a user may be more inclined to look further down the page for alternate destinations. Whether this actually happens or not will be revealed in time, but it’s worth highlighting that a negative impact on organic website visits overall is not a foregone conclusion.
Google AdWords Removing Right Hand Side Ads: In Conclusion…
Ultimately, Google’s market position is based on consistently delivering the most relevant results, day in and day out. Their focus remains unchanged and they are wise to making sure they don’t take their eye off the ball when it comes to relevancy. Increasing average click-through rates by focusing only on the top positions and increasing competition to achieve these positions should naturally push advertisers to be as relevant as possible, and target less broadly (except, of course, any unicorn clients with infinite cash). Both of these will contribute to an improved user experience and are good for Google in the long haul. Creating an experience that is consistent across mobile and desktop is also a key pillar of Google’s approach to search, and right hand side ads were one of the more noticeable of these outstanding differences.
Any short-term worries about protecting revenue should be offset by the knowledge that their product is improving and CPC inflation making up some of the deficit.
Branded searches should remain largely unaffected, but manufacturers whose wares are sold by third parties and comparison shopping platforms could be hit from a performance point of view and may choose to distribute their budgets across other channels. The biggest immediate impact will be on prospecting terms used by SMEs where these changes make it potentially easier for a few larger players to crowd out smaller competitors.
Finally, a sensible look through your existing accounts making use of the Top vs Other segment should help identify any potential areas of change and/or concern, and should help you make sensible recommendations to and help manage the expectations of clients most affected by this change.