Google’s parent company, Alphabet recently announced their Q4 2015 financial results and delivered $21.32 billion revenues, up 18% year on year. A truly staggering achievement.
The majority of Google’s success is due to the revenues they derive from AdWords. They are always running tests on the search engine results page, to make the results more relevant and also drive increased revenue.
These tests can range from the number of ads on the page, additional information, colour of links the look of the ads, they are endless. Generally the layout or look of the page is always changing and as users of Google we don’t always take note. However, as Google AdWords advertisers we pay very close attention to the search engine results pages, any changes to the results can have a significant impact on AdWords campaign performance which might require a change in strategy.
Every once in a while Google announces a game changer. A significant change to the search engine results which impacts both the users and advertisers. While changes to the page are made to improve relevancy for those users, from an advertiser perspective the impact on their AdWords investment and performance can be huge.
We last saw this when Google rolled out Enhanced Campaigns in Q3 2013 which created uproar from advertisers as they saw their ability to granularly control mobile bids in AdWords removed.
As the number of mobile searches have increased advertisers have started to take note, some being early adopters and taking first move advantage, incorporating mobile visibility in the heart of their AdWords strategy.
As the mobile auction on AdWords intensifies, the CPCs increase. At Maxus we saw a significant impact to the performance of our clients’ campaigns. Since the roll out of Enhanced Campaigns, we have seen mobile CPCs increase by over 90%!
In Q1 2016 the computers share of AdWords spend only made up 44% of total spend, the lowest share we have ever seen at Maxus. Advertisers are continually focussed on mobile, but are having to pay more for that traffic.
What is changing?
A spokesperson at Google has just announced that they will be removing ads from the right hand side of the desktop search results. Ads will now only be shown on desktop in up to four positions at the top of the page and/or at the bottom of the page, similar to how the search results page look on a mobile or tablet. This will reduce the overall number of ad impressions which Google see as a positive for users. These changes will be rolled out globally, across all languages over the next couple of weeks.
According to Google, bottom serving ads will appear more often and PLA (Product Listing Ads) and the Knowledge Panel on the right hand sight of the results on desktop will be unaffected.
Ads appearing in top position of the search engine results page often show better performance for advertisers, the CTR is higher and so can the ROI. Given the nature of the auction model and what we have seen on mobile in recent years we expect the auction to intensify and CPCs will increase as advertisers chase for their ads to appear in those top 4 positions.
Good news for Google, but again, not good for advertisers.
What are the implications for Advertisers?
Given these imminent changes, it is crucial to ‘batten down the hatches’ and be prepared in the short term. Keep a close eye on desktop performance and define your longer term strategy based on the data.
As a starting point review your AdWords campaigns closely, we expect many advertisers to increase their bids as they chase higher ad positions which could lead to sharp increases in desktop CPCs over the coming month.
Pay close attention to historic keyword performance, check your desktop bids, campaign budgets, Quality Score, ad positions and impression share as well as reviewing your bidding strategies. Review your ads and ad extensions, making sure that you are taking advantage of sitelinks and call outs where possible.
Set your bids to a level which balances ROI and visibility and pay daily attention to AdWords performance on desktop devices, making changes in-line with the agreed short term approach.
Keep a close eye on the traffic you are receiving from natural search on desktops, we might expect traffic to decrease as natural search results are pushed below the fold of the page, the top of the page now being dominated by ads on a desktop.
Work with the SEO team to define a keyword level strategy which takes into consideration visibility. Longer term, advertisers will need to think about how they manage their ‘PPC’ and ‘SEO’ budgets, Google’s hope being that they see a greater share of clients’ SEO budgets as advertiser need to invest heavily into AdWords to maintain their traffic levels.
After the initial panic has subsided, things will get back to normal, albeit in what might be a slightly different world for AdWords advertisers. Always focus on best practice management of AdWords campaigns, adapting your strategy as the game changes. This is the approach we live and breathe for our clients here at Maxus.
Written by Oliver Cassel,Head of Performance, Maxus