Recently at the Google Ads & Analytics Innovations Keynote held on on May 24th 2016, Google released some game changing news to people who are familiar with Adwords and the world of PPC. Without a clear date other than “sometime this year” we will begin to see an increase of text on all our ads. In some early testing they claimed that some advertisers saw an increase in clickthrough rates of up to 20% compared to the current text ads we have in place now. This sounds like fantastic news, who would ever turn down the opportunity to increase clickthrough rate? But delving in deeper to this topic it begs the question: Is Google really optimizing for the needs of the consumers and users? Or are they looking out for their own (already) deep pockets?
As you’ll see in the chart below, text ads will increase by nearly 50% in character count and it will allow us to describe our products and services in much finer detail. At first glance this is great news because sometimes as advertisers we do need that little extra space to get our point across to the end user. I’ve had countless occasions that go a little like this:
Just finishing up the perfect description line right there… let’s check the character count… Dang it! 36?! Oh come on!.
It happens too many times, and it gets a bit frustrating at times.
For the advertisers this sounds like great news but let’s take a look at it from Google’s perspective and what they have been doing to the SERP in just this year alone. In early February, Google announced that it would no longer be displaying side bar ads. Upon some research it seems that their reasoning behind this was to work towards a seamless user interface of the SERP between desktop and mobile. This makes a bit of sense since the shift to mobile has already happened. And by this, I mean that more than half of the searches done on Google are through mobile smart phones rather than desktop and laptops. After the removal of the side bar ads we started seeing an increase in competition. This sort of competition would only come natural with less real estate to work with on the SERP. Instead of businesses being happy at ad positions 1-8, where all those ads were visible above the fold to the viewer, advertisers now absolutely need to compete for the number 1-4 position which naturally increases competition and cost as well. If you are not at those top positions, chances are that your ads are not going to be seen. Some would argue that there are ads at the bottom of the page now as well, but the user will rarely scroll all the way down to the bottom of the page going past organic results and find your specific ad. We’ve personally seen a slight increase in costs to remain competitive for those top 4 spots with our own clients. Not being careful with these new changes Google implements can be detrimental to your account. Lowering numerous, if not all, metrics within your campaigns. This change has made it even harder for smaller business to thrive in PPC. Aside from your ad and keyword relevancy, aiming for those top positions can really rack up your costs tremendously. PPC just got a little more competitive and harder for anyone or any business that is starting out and may not have the funds to compete with major brands.
We are still seeing the impact left by the no side bar ads and managing quite well here at Netfinity. But these new expanded text ads will increase competition and drive costs up even more! Take a look at this infographic down below.
This all simply comes down to real estate available on the SERP and we are all fighting for at least the number 1-4 position as of right now. On the left under “previous” you’ll see that it has the most ad space, which we were working with this just a couple months ago! In the middle, you’ll see what we are currently working with, which has a little less ad space and you can begin to see how it becomes more expensive to remain competitive. Even more so with the last page (right) which is where we are heading. Now obviously, we won’t know how many ads will be displayed yet with the new changes, but with 50% more text, I can only speculate that it will be no more than 3 positions at top which is one less than we’d have now. You begin to see a trend with these changes, less real estate to work with which equals more expensive to compete. This ultimately leads to Google getting a little more bang for their buck out of AdWords users. I still can’t grasp myself if this change is done with 100% good intentions, we will have to wait and see how it unfolds. I can certainly tell you however, that we welcome the challenge and am eager to compete for those top positions.
So if you are new to the marketing and advertising space and are considering Google as a potential channel, I encourage you to work with someone who is actively staying on top of the ever evolving space, and can help you be competitive and not break the bank.
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