Every now and then Google likes to drop a small, well-placed, bomb on the paid search industry. In February 2013 the company behind the world’s most visited website launched “Enhanced Campaigns” changing the way advertisers were able to manage spend on different devices, and just last year Google introduced “Upgraded URLs” altering the way that 3rd party tracking needed to be applied to destination URLs in AdWords.
The latest significant change for advertisers appears to be the death of right sidebar ads on Google’s search engine results pages. This change, as reported by Search Engine Land, will see text ads on the right hand side of the search results become defunct as Google looks to add an additional fourth ad to the top of the search results page for what they are calling “highly commercial queries.”
Cue the hysteria. There are several immediate questions that spring to mind. Firstly, what does this mean with regards to CPC inflation? With fewer results to bid on, the competition for the top places will inevitably increase and therefore bidding wars for top performing keywords are likely to become greatly intensified. Secondly, is this the end of smaller advertisers being able to use AdWords as a channel to drive incremental revenue? Currently advertisers with smaller budgets are able to occupy a place on right hand side of results where bigger spenders have the additional cash required to push for positions one to three.
The truth is this probably does mean CPC inflation, but what it should not mean is the end of AdWords being an important channel for smaller advertisers. For years Google have been working to help advertisers serve even more relevant ads on the search engine results pages. This has meant giving advertisers more control over when and where their ads are showing, allowing advertisers to overlay both first party audience data (through RLSAs) and third party data (through demographic targeting). The fact that many advertisers still choose to ignore these features is not just to the detriment of the advertiser, but also to the user of the search engine itself.
This development should serve as the ultimate kick in the backside for paid search advertisers that are still seeing their campaigns as simply keywords and text ads. I suspect the higher levels of keyword competition will lead to advertisers finally invoking many presently neglected AdWords features, ensuring that when paid search strategies are built greater emphasis goes into understanding how audience data can be applied to maximise return.
So yes, CPCs may go up, but if paid search advertisers are smart and start to utilise the full set of available AdWords features they will ensure that even more relevant audiences are met with their ads and therefore any inflation in CPC shouldn’t come at the detriment of return on investment. For those of us however, that are currently utilising the full extent of AdWords features, well, it’s time to start the moaning, I suggest directing our complaints in the direction of Mountain View, Santa Clara, California.