Why Google Adwords’s New Layout Might Affect Small Businesses

April 6, 2016

Google made some changes to Adwords in February. The Right Hand Side (RHS) ads were removed and as a result we no longer have 11 ad slots but 7 – 4 at the top and 3 at the bottom. This wasn’t expected but Google have been doing some pilot test with an additional 4th slot for the past few years – even more so over the last few months.

Right hand side ads removed on desktop search

Google’s Ad Layout On Desktop Search Results

The idea behind this could be because they are championing mobile usage, and to harmonise this they have adjusted their ad layout for desktop. Recent statistics from KPCB mobile technology trends state that more than 50% of traffic comes from mobile devices and desktop and tablets share the remaining 50%. Although everyone is speculating who will be the winners and losers in this we all know Google is doing all this with revenue growth in mind. However, here is what we think will be the outcome of this in terms of key performance metrics to advertisers: Changes in cost per click (CPC), click through rate (CTR), impressions share.

Does this mean CPC will skyrocket?

This will be revealed with time. However, we know a lot will be decided by the advertiser’s bidding strategy. Since most advertisers bid for positions we therefore expect changes made to secure the top slots (1-4) to cause a ripple effect across board that will cause a reaction across the market. This will eventually affect the auction and Google’s algorithm will react to the fluctuating patterns and offer higher CPCs.
Some of my previous colleagues have stated in a recent discussion that being in position 5-7 is like being penalized by Google and wouldn’t be worth bidding for them if you are appearing below the fold. I tend to agree with this; if we compare this to organic search engine ranking positions (SERPs) it essentially being put in position 15-17.

Will this affect PLA’s (Google Shopping)?

As of now the answer to this is no. Having said this, other advertisers have seen Google experimenting on various occasions on the Product Listing Ads (PLA’s) real estate. This has been one of their most successful product for advertisers to date and it is no surprise that they have ventured into Youtube PLA feeds and are still experimenting on carousels on various devices. Recently, an expandable 16 slot product listing ad was triggered (see more on this article). The space left will be used for something in the near future.

How does this affect our clients?

Business advertisers in niche markets that are not competitive are the likely winners, as are businesses offering ecommerce services through Google shopping as we expect to be seeing this more frequently. For clients falling under these categories we don’t expect to see any negative impact, if any just a small change. The biggest losers will be low margin businesses in high competitive vertical. This is what we have our eye on. We do have strategies in place to deal with and a reshape of your marketing strategy in the event that things change. More on this will be highlighted on individual client reports. If there are problems, other paid options could be useful for the short term.

Quick fixes include:

  • Display advertising (includes Gmail Sponsored Promotions – aka GSP)
  • Video advertising
  • Brand awareness campaigns
  • Venture into mobile advertising
  • Explore Paid Social media

At Pixus we are happy to review any PPC campaigns you have running. We are an approved Google agency and are happy to offer you advice concerning any paid online advertising. Please contact ben@pixus.co.uk or call 0151 4269977.

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