Opinion

Google’s latest Adwords changes will have a massive effect on advertisers

In this guest post Tom Sadler discusses why the new update to how Google displays AdWords adverts will affect every one who uses it.Tom Sadler - indagodigital

I believe that this will affect every single one of AdWords advertisers.

What is it?

Google has fundamentally changed the way that it displays its Google AdWords results. Replicating their mobile experience they are removing AdWords adverts from the right hand side.

This means that adverts that were previously above the fold in positions 5-7 are now relegated to the bottom of the page. The advert in position 4 will now move above the organic results for high volume searches.

Google started testing 4 adverts above the fold in December 2015 in India, USA and Germany as described below by SEMPost.

The results from these tests have given them the confidence to start rolling this out globally throughout the month of February.

Let’s take the results from the high volume search term ‘Credit Cards’ and see what impact this change has had upon the search results.

Old Search Results

Old Google search results

New Search Results

new Google search results

Why does it matter?

For a high demand search term such as ‘Credit Cards’ the CPC (costs per click) for the top 3 positions are very high. The Google Keyword Planner (the result of which we need to take with a pinch of salt) suggests bidding $26.03.

In order to rank AdWords adverts Google uses a number of factors including Quality Score, Ad Extensions and Max CPC. This means that whilst Max CPC is not the sole factor in deciding the position it has a massive influence. Bidding a lower Max CPC enabled advertisers to still appear for searches for “Credit Cards” but to pay a much cheaper CPC.

Indago Digital has found that for some search terms, position 5 generated the highest ROI for clients due to the cheaper CPC and it still appearing at the top of the page. Google’s update changes everything. These high-performing position 5 adverts have now been bumped to the bottom of the page.

What should you do?

Get the person that runs your AdWords campaigns to check for high performing campaigns with an average position of 5 or higher. These are the campaigns that are likely to be impacted by the AdWords change.

I believe that campaigns that are currently sitting in average position 1-4 will also be affected. Advertisers who were previously getting great results from positions 5 and above will now be forced to increase their CPC’s to ensure that their paid placements don’t disappear into the ether.

Why has Google done it?

Google’s original slogan was “Don’t be evil”, whilst calling this change evil would be greatly overstepping the mark there is no doubt this has been done to increase CPC’s for Google’s most competitive search terms.

Google claims this change has taken place to replicate mobile and desktop results. My view is it’s another in the long line of Google updates to increase CPC’s that have varied from enhanced campaigns to Google AdWords Express to including close variants for exact match keywords.

Tom Sadler is Sales and Marketing Director for www.indagodigital.com.au.

ADVERTISEMENT

SUBSCRIBE

Sign up to our free daily update to get the latest in media and marketing