February 22, 2016: Over the weekend, the SEMPost broke the story that Google was retiring– or at least massively de-emphasizing right-rail ads in its results pages for many commercial queries.
After a tweet storm broke out over the development — which will shake up many PPC advertisers’ budgets and success metrics — a Google spokesperson confirmed to article author Jennifer Slegg that the rumors were true: “We’ve been testing this layout for a long time, so some people might see it on a very small number of commercial queries. We’ll continue to make tweaks, but this is designed for highly commercial queries where the layout is able to provide more relevant results for people searching and better performance for advertisers.”
Consequences for marketers
The change has huge implications for PPC marketers. Right-rail ads allowed above-the-fold visibility for budgeted-constrained marketers, providing in an affordable alternative to the hyper-competitive top-of-organic ad spot auction.
The new format — which will appear on desktop — not mobile results pages, reportedly uses four top-of-organic ad slots placed above the organic results. Ads that fail to get into these positions will be bounced down to the bottom of the page, where a total of three spots — one more than previous — will be present to accommodate the spillover.
Here are some immediate consequences that we can expect from Google’s big change:
1. Click prices for top positions will rise
The change will accelerate competition for the top four spots, raising prices for these coveted positions. Marketers that could coast along on lower priced bids in order to gain entry to the right rail will be forced to bid up or accept much lower click volume. Some might leave the market as a result. Those marketers who’ve worked hard to build a high Quality Score for their ads will fare best.
2. PLA usage will increase
According to initial reports, PLAs (Product Listing Ads) will continue to appear in the right rail for commercial queries. Marketers who’ve implemented a PLA-reliant strategy will benefit, those that have not will be less affected. It’s too early what effect this change will have on average PLA prices but it’s likely to have a measurable impact.
3. Organic results will be further marginalized
SEO real estate on commercial results pages has been shrinking for a long time. For many commercial queries, organic results are already almost invisible, and this format change will further depress organic results in the SERP. While it is doubtful that the relative paucity of organic will bother many people (in many cases consumers welcome search ads when shopping or researching products), some marketers reliant on SEO for top-of-organic results will feel squeezed as competiton heats up for the remaining organic real estate.
4. Having a presence in the knowledge panel/knowledge graph will matter more
Given that knowledge graph/knowledge panel results will run in the right rail area, getting into the Knowledge Graph becomes more important than ever. Marketers will likely increase their activities to gain entry into this Graph, including creating Wikipedia entries and colonizing other inputs to the Graph. Sockpuppetry may increase as a result.
The change is consistent with Google’s philosophy of showing fewer, more relevant ads, and will likely help it achieve higher CPCs. Part of the change may be explicable by Google’s desire to standardize mobile and desktop SERPs (mobile displays do not provide room for sidebars).
Some users have however voiced concerns that the further marginalization of organic results reduces Google’s utility, a sentiment that Google will likely be paying close attention to as the rollout begins. While it’s too early to estimate how much prices will rise, Didit will be watching and reporting on these changes as they make themselves felt through the PPC auction market in the next few weeks.