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September 9, 2016

Google’s New Search Layout: Boon or Bane?

The verdict is in: Google’s changes to its search engine results pages are getting mixed reviews.

For digital marketers, the surprise refresh of the year came in February, when Google released perhaps the most significant update to its search engine results pages (SERPs) in the last five years.

The changes have been a boon to some advertisers and the bane of others.

What Changed?

The update, which arrived unannounced six months ago, has had a tremendous impact on both search engine optimization (SEO) results and search engine marketing (SEM) accounts that advertise with AdWords. The update removed the text ads from the right sidebar of the SERPs for desktop and laptop devices. Now, the ads are only shown inline with the organic listings on each page—both above and below them.

The number of text ads above and below organic results is not fixed. Search pages display a maximum of four ads above the organic listings and a maximum of three below them. This is a departure from the previous display, which held a maximum of three top spots.

More recently, the format of the ads themselves has also changed, allowing for the use of sitelink extensions, call-out extensions, and increased character counts for both the headlines and descriptions of ads. This isn’t just for the top spots, either. All ads can employ these features.

The Good

The layout changes have received a positive reception from shopping advertisers, those in the top spot, and those who like to see simpler, more relevant advertising in their SERPs (users).

  1. More visibility for Shopping Ads: Although the update was unannounced, Google was testing it in smaller markets for more than a year. Those who rely on shopping ads are seeing increased metrics for essentially the same cost. Shopping ads generally have at a reduced cost per click (CPC) because they’re typically cheaper than text-based ads.
  2. Cleaner, more accurate representation of products/services in ads: The increased CPCs may mean that generic ads fall by the wayside. For example, companies like Yellow Pages, Stuccu, and Ask.com have historically used “Dynamic Keyword Insertion” in their ad copy to place search queries in their ad headlines to make it seem as though they carry the products and services prompted by the search query. These ads, which many professional search marketers consider spam, seems to be decreasing in frequency due to the increase in CPCs.
  3. Better results from the top spot. The layout changed the look of text-ads, too. And that change is for the better. Although ads are still designated with yellow “ad” badges, the text is in line with the rest of the page, making it appear more consistent with the organic results. This native look means users are far more likely to click on the top result, when before the update, they would have scrolled down to reach the top organic listing.
  4. More flexibility thanks to ad extensions and increased character counts. It used to be that only the very top spot allowed for the use of extensions (addresses, phone numbers, site links, etc.). Now, all ads—above and below organic listings—can convert more quickly thanks to better identifying information and calls to action that are more available.

The Bad

  1. A substantial increase in CPC. Those in the top spots may see better results, but they’re paying dearly for them. Those in extremely competitive markets, such as IT, insurance, car sales, etc., now have to spend significantly more money to reach the top spot in search. While the real estate at the top of the page is more valuable, the big ROI is really only reserved for broad search queries. Those long-tail terms that demonstrate a user’s strong intention to purchase have seen only minimal increases.
  2. It has hurt organic search listings. The addition of a fourth top-of-page ad slot has pushed the organic search results down by one position. While this may not seem like a big deal on the surface, the results have been considerable. The further down the page a search result goes, the lower it’s click-through-rate. A lower click-through rate for the same amount of impressions translates into a reduction of organic traffic. With the new expanded text ads, which can add more lines to the top ads, organic listings can actually be pushed below the visibility range for certain devices. This makes even the top organic result less effective.

Takeaways

While the net effect for Google advertisers is positive in terms of visibility, the drawbacks are substantial. For digital marketers, it’s a mixed bag; on one hand, we can provide better paid results for our shopping advertisers, but there is no way to get around the reduced effectiveness of organic listings. Advertisers historically comfortable with costs associated with the text ads appearing in the right sidebar are now forced to bid higher in an effort to fight for the more limited real-estate. This means brands now have to sink more money into both paid search campaigns and SEO campaigns to achieve the same or slightly better results.

The impact of the expanded text ads remains to be seen, and it likely will have a mixed result for marketers. While we can bet the extensions and added characters will make advertising on Google much more attractive, it will likely have an even more deleterious effect on organic results as the top slots continue to push organic slots down.

Google is planning many more changes to come, including the use of local search ads in Google Maps and Google.com, responsive ads for different device types, device-specific ad bids, and more. Undoubtedly, these changes will mean great things for advertisers, but it remains to be seen what the impacts will be for organic results. Despite the uncertainty, however, the fact that Google is working hard to make SERPs more useful for both advertisers and users is encouraging and should be commended.

Overall Grade: B-


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Mike Canarelli is the CEO and co-founder of Web Talent Marketing, a full-service digital marketing agency based in Lancaster, Pennsylvania. As the force behind Web Talent, Mike lays the foundation for his clients’ success by applying his experience, expertise, and passion for excellence to every account. His mission, and the mission of the agency, is to partner with clients to deliver exceptional results. Follow him on Twitter @MCanarelli.

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