The rumours are true – Google is getting rid of ads on the right side of search engine results pages on on desktop/laptops. Search Engine Land appears to be the first to report the news
The main question that people seem to be asking at this point is – WHY? Don’t fewer ad positions mean less revenue?
It’s understandable why that may be your first reaction, and despite the fact that Google always says they put their users first, isn’t it obvious that they put the users first so that people keep coming back and using Google, which generates more revenue from ads!?
I called Google to get some more information about how exactly this will work.
Search Engine Land reported that a 4th ad will now appear above the organic search results for “highly commercial queries”. I was told that the 4th ad will now show for any searches for which there is a qualified ad that is relevant enough/meets a minimum quality threshold. Suggesting that the 4th ad will only show for “highly commercial queries” may lead one to believe that it would only be a small percentage of search queries that would show a 4th ad. I’m just speculating at this point, but I’d suggest that “highly commercial queries” simply means whenever there are 4 or more relevant advertisers competing for that search query/keyword.
I was also informed that Google will show up to 3 paid ads below the organic search results.
When a search query is indeed “highly commercial” or more specifically, “highly competitive” and Google has lots of qualified ads, there are currently up to 11 paid search slots on a page. The new model will leave 4 of those advertisers off the first page. The laws of supply and demand dictate what will happen here. There’s a lower supply of available first-page ads, but the demand remains unchanged, so the average cost per click on these highly competitive search queries is going to go up.
So in a way, Google gets to have its cake and eat it too!
- Google gets a more aesthetically appealing SERP (search engine results page)
- Given that it’s not uncommon to have a 10x difference in clickthrough rate when ads show top vs other (bottom/side), the addition of the 4th ad at the top likely offsets the loss in revenue from the ads on the side
- There’s added revenue from the new ads on the bottom
- The average cost per click increases, particularly for ‘highly competitive searches’
On the surface, this actually seems to be a very shrewd move on Google’s part.
I do predict that many advertisers who currently have a cost-per-acquisition from AdWords that is barely profitable right now will not be able to justify any substantial increase in their avg. CPC/CPA, and they’ll leave Google altogether. In the past I’ve regularly advocated for Bing because advertisers will almost always get a substantially lower CPA with Bing than they will with Google.