How Google's Discontinuation of Right Side Ads Will Impact Retailers
Google Discontinues Right Side Desktop Ads
Last week, Google announced a significant change to remove the ads on the right side of the desktop search results and only place ads at the top or the bottom of the search results page.
Google will now show four instead of three ads above the search results as seen in the example below:
Before:
After:
The change is now rolling out to all Google searches worldwide.
Ads will not appear on the right side of desktop search results, with two exceptions:
1. Product Listing Ad (PLA) boxes (Which show either above or to the right of search results)
2. Ads in the Knowledge Panel
The real question is, what kind of an impact is this going to have on advertisers?
More Competition, but Not a Huge Loss for ROI-Focused Advertisers
“It’s going to potentially start costing a lot more to get your text ad to show, so smaller companies are going to be squeezed out a lot more to compete with companies with bigger ad budgets,” Tien Nguyen, Director of Technology at CPC Strategy said.
On the bright side, right side text ad placements weren’t particularly strong performers, and the addition of a potential 4th top text ad placement for high-intent shopper queries could help alleviate the loss here. We broke down the performance between Top (above search results) and Other (not above search results) ad placements for Google Search ads over the past 365 days:
Key Takeaways:
1. Other accounts for 68% of total impressions but only 27% of total clicks and 22% of spend.
2. CPCs are $0.15 higher for Top placement with a CTR almost 6x higher than other.
3. Top converted at 0.8% higher than Other.
**While it may look like ROAS is higher on other placements, this is likely do the fact that the data used here includes merchants who are tracking conversions but not tracking conversion value.
Bigger Emphasis on the Importance of Using Ad Extensions
“Google wants to monetize the SERP, and create the best user experience possible. As a Google user, ad extensions give me more information and provide a better experience on the SERP. Text ads with ad extensions get higher CTR,” Roman Fitch, Retail Search Manager at CPC Strategy said.
“Most ad extensions only show to ads that are in the “Top” segment, not “other” (side rail) segment on the SERP. Google is likely removing ads from the side rail (“other” segment) so that every text ad served is accompanied with ad extensions, thus increasing the probably of monetizing a click.”
“This aligns with the update to quality score calculations that Google announced last year where ad extensions are now a component of quality score. As an advertiser, it places more emphasis on maximizing all of Google’s ad extensions and creating the most relevant ad extensions.”
Closely Monitor Impression Share
Erick Smith, Paid Search Manager at CPC Strategy added, “I’m going to be closely monitoring the impact this change has on CPCs as well as impression share. If I start seeing impression share and ad position drop and cost rise then we’ll be re-evaluating strategy to make sure we’re maintaining our ROI goals.”
“It’s hard to know precisely how this shakes out across each industry and the best thing to do from this point on is to be vigilant to changes within your account.”
“There are definitely very real concerns over loss of visibility as well as the combination of increased cost with lower ROI. If we do get pushed down to the page (ex. Google only displays one at at the top of the page and the rest at the bottom), this would clearly hurt CTR and thus Quality Score.”
“If we’re looking for a positive, it could very well be that this is similar to the day when PLAs became paid. It could weed out a lot of advertisers who are only using a shotgun approach through Broad Match targeting.”
For more on Google’s discontinuation of right side desktop ads, email [email protected]
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