Farewell to Right Side Ads

By Kimberly Honoré in Industry News on February 25th, 2016

Late last week, news of Google’s decision to say fare thee well to right side ads started to infiltrate the paid search community. It has many of us wondering just how much this is going to affect overall performance. In a nutshell, it is believed that by the end of this month, 100% of right side ad space will be eliminated worldwide. Ad depth will dwindle down to just four paid spots. Similar to the mobile experience, some of the ads will be placed below the organic listings within the search engine results page (aka the SERP).

google right side ad update

Why is Google doing this? It’s an effort to mirror the look and feel of the SERP across all devices, and because less ad space is seen on mobile devices, it’s being mirrored on desktop. PLAs and bottom ads are the exceptions — for the time being! One could also ponder whether this is being done to make the landscape even more competitive, resulting in higher CPCs.

Sure, with brand terms that are typically already in position one, it may not be a big deal to see the ad depth decrease — especially when it comes to pesky competitors encroaching on your brand terms. But for your non-brand terms that help drive incremental orders, it might have a more catastrophic effect. We all have those non-brand keywords that perform beautifully in the top five positions, but the minute they start to teeter into positions three or below, the efficiency plummets, and all you end up with are more clicks (many of them lacking quality), relatively the same amount of conversions, and a less efficient cost per conversion.  

As you work with crucial terms, you start to learn what their sweet spot is on the totem pole. If your sweet spot is typically on the right side of the SERP, then this change could negatively affect your performance. In order to maintain the orders you achieved on certain terms before — terms that had happily inhabited the right-hand side of the results page — you are going to have to bid up to even show. And based on how competitive the term is you are bidding on, it may be a constant struggle to try and even serve. CPCs will go up — especially for highly bid on, competitive terms. Some advertisers will need to set new goals for themselves — perhaps taking what used to be a $5.00 ROAS goal, and decreasing that to $3.00, to account for the fact that you’ll need to bid higher to capture one of the spots.  

What’s scary about this is that some advertisers may not be willing to take on waste and decreases in efficiency in order to maintain their conversion volume. Some advertisers may decide to bow out of the landscape altogether and take their money elsewhere. But before anyone panics, we should see what the effect on results will actually be. After all, paid search is one of the most efficient channels you can invest in and it should always be maximized, especially on terms that routinely convert.  

This change in the Google landscape may actually lead many advertisers to focus on ways to improve their ranking via ad copy and landing page tweaks. Because they’re competing for those top spots, they will want to strive to pay the least amount possible for those spots in order to keep their cost pers efficient. Perhaps this will push more and more advertisers to focus on quality versus quantity. This is something smart marketers have been doing for years.  Quality score and impression share metrics may have been ancillary metrics that you pull every other week (or fewer), but now these metrics for your non-brand keywords may be a good indicator of just how competitive your keyword >> ad copy >> landing page relevancy is in the Auction space, and more importantly, how much you may need to pay up to continue to show.

Bing & Gemini may also find a window of opportunity to steal back some spend. As advertisers find their ROAS decreasing on Google, Bing & Gemini may become a more viable option to maintain efficiencies across an account.  

For example if Google’s ROAS decreases from $5.00 to $3.00, but Bing historically generated a $4.00 ROAS, what used to be underperforming by 20% is now outperforming Google by 33%!

We suggest keeping a close eye on your post-right-side ad performance and see just how much of an impact this change in the SERP will have on your results. Also, get a feel for what your need to have terms are and determine how many of those keywords are in positions higher than four; it may be smart to start bidding up now before everyone and their grandmother starts doing the same once right side ads are obsolete.    

Managing client expectations is needed as well. Your client needs to understand that rises in CPCs and efficiency losses are likely going to happen, and in order to help offset some of those costs, you’re going to need to work together to make sure there is a strong correlation between the keywords, the ads, and the landing pages. This change will be a sturdy reminder that there is much more to running a successful paid SEM campaign than bid management.  A strong focus on improvements to user experience, creative and account layout will likely be the topic of many status meetings moving forward because we’re all going to be trying to uncover how to capture one of those top spots, without having to simply bid up nonstop.

This is a new era in paid search and it will be interesting to see what happens in the coming months.

Stay tuned!

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