Google is expected to announce some big changes to the search engine results page (SERP), which can have significant implications for bid management among other things. They are expected to phase out text ads on the right rail of the SERP from desktop searches and will only show a maximum of the top four ads for highly commercial queries on the SERP. According to Google, this change is designed for highly commercial queries where the layout provides more relevant results for people searching and better performance for advertisers. These changes should not have any impact on Google PLAs, but it remains to be seen whether this will impact the Knowledge panel.
While Google doesn’t anticipate any dramatic increase in CPCs, it’s hard to image how this won’t affect cost given that it will increase competition for the top three spots. Ads showing at the bottom of the page are clicked on much less frequently, so advertisers will be vying for top position, which will likely increase CPCs. It will become increasingly important to optimize ads to top positions if traffic is further reduced below position three.
Beyond CPC increases, we expect this will limit the click/performance data on keywords being tested. Since keyword performance dictates bid optimization and position, it will be difficult to test keywords as quickly unless they are originally in position 1-3. It is typically a prudent practice to test keywords in lower positions (below 1-3) to determine performance before raising bids, and these changes will make it difficult to do so, and will likely result in an increase in testing costs.
A more granular build out will be key for retailers in order to have a substantial long tail of keywords eligible for more auctions as competition increases on head terms. Exact match and modified broad match will become even more important versus extended broad match. New features such as Customer Match will become more critical to retain efficiency, as it will be necessary to target the right consumers versus all consumers.
As part of the announcement, Google is re-introducing two line sitelinks and the two expanded sitelinks will be going away.
Example illustrating the new 2-line sitelink ad format
While Google has run tests simulating the changes, it would be difficult for them to predict the implications to advertisers not having click data to correctly set bids. The full implications of this rollout will only be known in the coming weeks.
We’ll monitor how these changes impact performance for retailers and continuously implement new strategies to efficiently navigate these changes.
To read more about this topic check out our reference in Internet Retailer’s article “Google stops showing ads on the right side of search results.”