February 25, 2016

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Marketing Strategy, The Latest

 

Google’s Side Ads Are Dead

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“Less than a week ago, Google announced their biggest change to the SERPs (search engine results pages) since they replaced the yellow background behind ads with little yellow labels. Google also reported $74.5 billion in revenue for fiscal year 2015. $67.4 billion or over 90% of that came from advertising revenue. So it follows that Google is always looking to test and optimization it’s search results.

 

The latest change comes in the form of removing ads on the right side of search engine results for desktop queries and instead, adding a 4th ad at the top and 3 more ads the bottom.

IMPACT

More Efficient Ad Experience

Google’s latest change is a testament to their relatively recent public commitment to design. Removal of side ads allows for a more elegant search experience and gives advertisers the opportunity to create more engaging search ads, including the use of ad extensions such as site links, callouts, services, and locations.

Investment In Knowledge Graph + Shopping

By removing side ads, Google clears the space for potential knowledge graph elements. In fact, on a 1500px width browser, search results encompass less than 30% of the screen. In recent years, Google has made significant investments in the knowledge graph and I predict that the newly cleared space will continue to foster this development.

google_shopping

Additionally, Google Shopping ads outpaced search ads during last years holiday quarter, increasing 33% YoY compared to 13% YoY for text ads. Furthermore, Google’s addition of the “Buy Button” from Mobile Ads further confirms that they hope to take market share from e-commerce giants such as Amazon and eBay.

Less Organic Real Estate

The real victim of Google’s latest change is organic listings. Due to the 4th ad at the top of SERPs, most commercial queries feature only ads above the fold for search queries.

KEY TAKEAWAYS

Moving forward it is yet to be determined how this change will impact cost, but one thing we can be sure is that advertisers will be awarded more prominent placements, leading to higher click-throughs and ultimately more visitors. As paid listings continue to dominate SERP real estate and cannibalize organic listings, Google has once again reinforced that one must pay to play.

AUTHOR - Yichen Liu

Yichen Liu is Partner and Executive Director of Digital Strategy at Movetic. His experience in and passion for all things digital help elevate brands to the next level. In his spare time he enjoys shooting on his Nikon F1, exploring new places and hanging out with his American Bulldogs Chance and Abbey.

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