There is a huge change happening at Google that you need to know about.
In one of the most significant developments in search advertising in the past ten years, Google has made a big update to eliminate the sponsored listings on the right, and increase the number of ads on top of organic results to four.
With four premium ad spaces for sale, what does this mean for businesses running ads on Google? Who is impacted? Is there an increased cost? What can you do to minimize any ill effects and stay ahead of the pack? Don’t fret — we’ll address all of these questions below.
Who is impacted?
This major update to four ads on top is undoubtedly going to affect a lot of businesses (and end users). The advertisers who have been sitting on the 4th to 10th ad spots will see the biggest change. Ads previously in the 4th position (on the right-hand side) are now at the top of organic results. However, those in the 5th to 10th positions will either be banished to the bottom or not seen at all.
Here is a search for “travel insurance” after the big update:
These are the bottom three ads:
Here is the same search that was done before the change:
A few things to note:
- Only 7 ads are shown in total: 4 at the top and 3 at the very bottom (previously there were 10)
- All ads show ad extensions (previously only top 3 ads did)
- Organic search results are pushed down (only 2 for this search)
Google has stated that you’ll see 4 ads instead of 3 for “highly commercial queries” which, in layman’s terms, means searches with an intent to purchase — insurance, hotels, etc.
So what does this mean to your business?
Now that there are only 4 spots up top, the competition will become much more fierce. There will be a stronger push on improving quality scores (QS) — a score that Google determines based on your relevancy and partly dictates how much you’ll pay per click — and more emphasis on continuous optimization.
In the long run, ads at the bottom will see a significant decline in click-through-rates (CTR) — how many people click on your ad of those who have seen it — which will affect their QS, and in turn, results will suffer. To stay in the game, they will have to increase bids and work extra hard to regain a good QS. We predict overall cost-per-clicks (CPCs) will increase. But by how much, you ask? It’s too early to tell.
What about companies who aren’t on AdWords but looking to start?
We’re not going to sugarcoat it — these new changes lead to increased competition and it’s going to be tougher to enter the CPC game. Here are some suggestions:
- Quality scores are even more important, which means the relevancy of your content to keywords is paramount.
- With a change in the auction dynamics for ads, a strong CPC strategy is a must — carefully choosing keywords, utilizing all relevant ad extensions, and creating compelling ad copy is vital.
- Expertise in setup and optimization will help your results stay visible above the fold.
Whether you have ads running or are thinking about starting, it’s important to understand the impact that these changes will have. It’s still a bit early to know all the implications, but our list should give you a good head start.
So what about SEO?
We saw in the screenshots above that organic rankings are being pushed down, sometimes even below the fold. With new features such as images, news, local packs and Knowledge Graphs, we’ve seen a steady decline in organic real estate over the past few years.
Does this mean the end of SEO as we know it? Not exactly, but it’s clear that Google is moving more towards a pay-to-play model. Now that there is a smaller space for organic listings, websites will have a bigger focus on SEO to maintain their precious positioning.
What is this going to cost me?
Competition for the top spots could become more fierce as it already is, and advertisers need to be prepared for a steeper CPC. Here’s an analogy to help shed some light on the stakes:
What happens in a race of 10 cars? The last couple of cars are fighting NOT to be in the last spot, fighting for a single inch while the rest of the pack cruises on. Now, what happens if there are only 7 cars in the race? #5-7 now realize they are in the last spots, and are fighting ever so fiercely to be near the top. This change is a smart move on Google’s part: now that only the first four spots are above the fold, advertisers, especially in an industry with many big players, need to be spending more and bidding more aggressively for that prime real estate.
It’s really too soon to tell specifically how much costs will increase, but one thing is for sure: this change is here to stay, so roll with it or your competitors will roll over you.
What can I do about it now?
There are several ways to tackle this new change. Let’s discuss the three big ones that are the most important and impactful:
Since there are now fewer ads to serve to the end-user, the content and intent portion of the top 4 ads need to be customized to serve the purpose of the search query. Competing against 4 ads is going to be much harder than 10, because the value of the above-the-fold space has increased exponentially. There are essentially only 4 ad spots that will make any impact to match the user’s intent.
Optimization: This is going to be key to stay above the fold. No more “set it and forget it” campaigns! Make sure you’re staying on top of relevant keywords, managing bids and maintaining CTRs.
Ad Copy: For businesses with limited budgets that cannot afford to buy their way into the rankings, ad copy will be one of your weapons in the fight. Ad copy should be customized for the intent of the user, to increase relevancy to the content in the ads. This will help maintain a high QS.
Luckily, cost is not the only factor that affects Ad Rank.
“Ad Rank is calculated using your bid amount, the components of Quality Score (expected clickthrough rate, ad relevance, and landing page experience), and the expected impact of extensions and other ad formats.” – Google
Customizing Ad Extensions: With all ads showing ad extensions now, it is vital to take advantage of this feature to differentiate your ad from the rest. Ad Extensions should be implemented into your ads where it makes sense, maximizing your precious real estate.
Landing Page Experience: Since this is a part of Ad Rank calculations, your ad needs to lead to a top-notch landing page experience to maintain an excellent QS.
2. Push that SEO!
We saw that organic rankings are being pushed down further. Are the more customizable results, such as local listings and Knowledge Graph, replacing SEO? Only time will tell, but it sure does seem that way for now.
Marketing efforts will now need to be increased to strike a fine balance between CPC and SEO. As ads become more expensive, it will be harder to secure that first spot. If your company cannot budget the increasing cost of running ads, your SEO has to do more work than ever before if you want to appear in the SERPs. Make sure both your CPC campaigns and SEO are correctly set-up and fully optimized.
3. Local Optimization
Knowledge Graphs: With right-hand side ads disappearing, expect to see more knowledge graphs and local listings pop up instead. The great news is that you can customize the content within the Knowledge Graph! Through structured data, you are able to modify information such as the logo, contact numbers and social profiles within the knowledge graph to make it more appealing for users.
Local Listings: These will be more important than ever, as these listings appear right under the top 4 ads and before the organic results. The listings involve a direct call-to-action: website, directions, or call, depending on if you’re on desktop or mobile. These listings can be implemented through Google My Business, so make sure you have a business profile set-up.
Four Key Takeaways from the Change:
More people will be clicking on ads instead of organic results.
It’s time to revisit your ad budget and prepare to allocate 25% more to Google search advertising.
Less Focus on SEO
SEO is still extremely important, but there is likely going to be a drop in organic traffic. A strong content marketing strategy should still be in place to ensure you maintain your rankings.
More Focus on Business Reviews and Location Optimization
Google Maps results are featuring local listings prominently under the ads. This means that local listings should be a priority to stay visible.
Do you need support with your Google AdWords campaigns? Let us know — we’re happy to help!