Google’s Gonna Stop Showing AdWords Ads on the Right Side of Results — What Does It Mean for Search Marketers?

There is news being shared around that Google is going to stop showing ads on the right side of its search results. I saw the news shared with me from one of my partners with the message, “Big deal”. And I agree.

It’s a little strange to be calling it news, because it started out as rumors (raised from a blog post from Media Image on 2/18/16) that were picked up on by MarketingLand, which they then confirmed with Google later in the day.

According to Search Engine Land:

Google is rolling out a dramatic change that removes ads from the right side of its desktop search results, and places ads only at the top and/or bottom of the page. At the same time, the company says it may show an additional ad — four, not three — above the search results for what it calls “highly commercial queries.

It wasn’t exactly news, because Google hasn’t reported anything as of yet. There probably will be a blog post from the AdWords team upcoming at some point.

This is a major change for search engine marketers. There have been other major changes in the past: Google Enhanced Campaigns (2013), Google Product Listings (2010), and Introduction of Quality Score (2005). This one is a little more subtle, because advertisers don’t have to do anything differently. They’ll just start noticing impact on their search campaigns. Keywords with lower Average Positions will see impression share drop. (I’d love to get comments from search marketers on how much impact they think this change is.)

I’m sure that Google is not rolling out this change lightly. According to the Search Engine Land article above, the tests started in 2010 with Mortgage related keywords (referenced from the Search Engine Land article above). And certainly, as the cash cow of both Google and the parent company, Alphabet, they understand what this change means for the business.

The Google-cynics will point out that Google is doing this only to drive higher CPCs. An experienced search marketing would know that CPC is only a factor in Google’s overall consideration of which ads get displayed. Google would say relevance is more important. The reality is that higher relevance leads to more engagement, and more repeat usage, which in turn leads yields them the highest monetization. In this case, what’s good for user is what’s good for Google. However, I could also argue that reducing the right-side ads reduces consumer choice, and disproportionately hurts new and growing businesses.

I would guess that in the aforementioned Google tests, the impact of all of the competing factors (CPCs, CTR, user behavior) yielded a positive enough result for them. Certainly, there could be some in Google’s product team who pushed for cleaner search results but it would have to be supported on the business side that this would be a positive, or at the least not a negative, for Google to make this pretty significant change.

[One sidebar observation in all of this: Google has been like this in mobile search results for years. It’s interesting how desktop is converging with the mobile experience, as opposed to the historical norm. I’m sure Google’s business teams looked at mobile AdWords performance in deciding whether or not to extend to the desktop.]

I’ll end with some observations and predictions. The good thing with online marketing is that all of this is observable and measurable, and so we will see:

1. Top Adwords advertisers will benefit. A lot. Those who run the most targeted, relevant campaigns. Those that convert and monetize the best. Or those brands who flat-out have the highest budgets. The addition of a fourth ad above the unpaid results also will benefit the top advertisers. The strong will get stronger.
2. The corollary to the point above is that Google is making it harder for entry level Adwords advertisers to get traffic. Unless Google is planning to rotate in advertisers just to make sure everyone is getting some impressions. Even middle of the road advertisers will get less impressions and traffic. In the battle between the haves and have-nots in AdWords, I would say the odds were tilted against the have-not’s.
3. Google SEO results will benefit as the natural result of having fewer paid ads to compete against. While the first SEO result will get pushed down on the page because of the additional top-of-page AdWords ad, there will be less distraction in the right-side ads once the user has scrolled down.
4. CPCs will probably rise for Google as a result of more scarcity in ad space. (The cynics aren’t wrong.) Advertisers will have to adjust, by taking in less margin or increasing their cost-per-sale, cost-per-acquisition targets. Competition will be greater, so search marketers have to get better.
5. In the U.S., where Bing search is relatively stronger than in other parts of the ads, I could see more demand from advertisers going to BingAds (which is Microsoft’s AdWords equivalent). Very simply, spend that some advertisers would have wanted to apply to AdWords might not be spent. Since this wouldn’t have any impact on the supply of search inventory at Bing, the natural outcome would be higher CPCs inside BingAds.
6. Lastly, I think it’ll help online comparison, aggregation and choice business models like Kayak.com, Bankrate, and Autobytel, whose ad businesses are similar to AdWords in that they are centered around directing traffic to advertisers. (Note: My company, HealthCare.com, also employs such a model for health insurance.) These business models pool results to consumers, which increases the likelihood of a conversion once they’ve identified an in-market consumer. These business models also pool together advertisers and ad budgets, helping to compete in competitive acquisition channels like Google AdWords. If AdWords gets more competitive as a result of this change, some advertisers won’t be able to expend their budgets and will look to go elsewhere to fulfill them.

I know there are a lot of search marketers who are smarter than and more experienced than I am, and who spend their entire days breathing SEM. I’d love to hear from your thoughts and predictions on this change from Google.