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Google’s Big Changes to Adwords

Google’s Big Changes to Adwords

On February the 19th Google made one of the biggest changes to Adwords that we’ve seen in recent years. These changes will affect the vast majority of advertisers on their Adwords pay-per-click search platform.

24Feb 2016

Google’s Big Changes to Adwords

On February the 19th Google made one of the biggest changes to Adwords that we’ve seen in recent years. These changes will affect the vast majority of advertisers on their Adwords pay-per-click search platform.

In the UK, as of Friday last week, Adwords will no longer show search ads down the right hand side of the main search results. This will significantly reduce the number of positions available for paid ads on each search engine results page (SERP).

The below image is a page prior to 19th February, with 3 paid ads above the organic listings and further paid ads running down the right hand side of the page.

Changes-Adwords-Before

Below is a page subsequent to the updates on the 19th February, with 4 paid ads above the organic listings and a strangely empty right hand side.

Changes-Adwords-After

Previously, each SERP would display around 12 paid ads. There would be 3 above the organic listings, 6 down the right hand side and 2 to 3 below the organic listings at the bottom of the page.

Since Google’s recent changes to Adwords each SERP will only show 6 or 7 paid ads. These are made up of 3 to 4 ads above the organic listings and 3 ads below, at the bottom of the page.

It is worth noting that Product Listing Ads (PLAs) are unaffected by the changes and will continue to be displayed on the right hand side of the SERPs.

Why Have Google Made These Changes to Adwords

There’s no official line on why these changes to Adwords have been implemented. However, like all commercial organisations, Google are in the business of making money. It makes sense, therefore, that these changes are designed to increase revenue. This may be through increased competition (and therefore CPC) for the top 4 positions in Adwords or by forcing advertisers on to alternative channels like Gmail and YouTube, where the competition is less intense.

It’s fair to say that Google are fairly astute, commercially, and aren’t in the habit of chasing short term revenue over longer term market share goals. We have to assume, then, that these changes to Adwords are beneficial to the search experience of their current and future users.

How Will the Changes to Adwords Affect Advertisers

If your campaign keywords regularly occupy an average position greater than 4, you are likely to see a large drop in CTR. Previously, before the changes to Adwords, if your ads were in position 5, 6 or even 7 on desktop searches, they would still appear ‘above the fold’ on most computer monitors. This means users would still be able to see (and click) your ad, without needing to scroll down the page.

With the new SERP layout, ads in positions 5 to 7 will be hidden away at the bottom of the page. And guess what will happen to your ads if they appear in position 8 or greater… That’s right, you will now be paying for the privilege of appearing on page 2 of Google search results!

Changes-Adwords-Page2

If your ads regularly occupy the top 4 positions, there will be increased competition for these slots. You can expect average costs per click to rise and impression share to drop, as more advertisers target the more lucrative top 4 positions.

What Can Advertisers do to Minimise the Impact of these Changes

Well managed campaigns that have concentrated on optimising Quality Score will be least affected by the recent changes to Adwords. By focusing on Quality Score advertisers will have ensured their ads and landing pages are relevant to their target market’s search terms. In turn, they will be paying the least amount possible per click and have a decent Ad Rank, which will increase impression share and help ensure they appear in the top 4 ad positions.

Due to the increased competition for fewer ad positions, it will be increasingly important to regularly monitor accounts and make bid adjustments to maintain position. The use of Ad Extensions like site links and call outs will become more important now all ads appear in the ‘full width’ format. Not only do ad extensions enhance Ad Rank, they also make your ads larger and help you stand out from the competition in searches.

There’s no question that Google’s latest changes to Adwords are going to have far reaching implications. The most negative impact will be felt within poorly managed accounts who have adopted the ‘set and forget’ management philosophy. Accounts that are regularly maintained and have concentrated on optimising Quality Score and Ad Rank will be least affected.

To learn how your account might be affected by the latest changes to Adwords, you can book a FREE Adwords audit here.

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