The first video in my new series about the changes in paid search, what they mean for advertisers and how to tackle them going forward.
In this video I run through recent changes in Google search results and explain:
- What happened and the recent Google AdWords change
- What this means for advertisers
- The good news
- The bad news
- How you combat the problem and remain profitable
Full Video Transcript
Here to talk about Google deleting the right side ad’s on their search result pages. What’s happened. Don’t panic. Right rail, as it’s known, the ads on the right hand side have been removed as of mid-Feb of this year. Google’s standpoint on this was they’re coming from a position of improving usability for the customers, you and I and everyone else who uses search engines such as this.
That position of usability doesn’t really wash with me entirely.
Yes, it’s now replicating and mimicking a mobile search result. However, let’s face it, AdWords is Google’s biggest single point of revenue.
Anything they do in this space and any changes they make to AdWords is for one key reason and that’s their revenue, their bottom line. Their advertisers come in at a second place because they know for a fact that whilst people are using search engines and searching, they will have an ad platform and people will spend money to advertise, particularly the big boys.
No text ads on the right hand side any more. Google will now serve four ads at the top, as you can see in the example there.
There used to be three ads at the top and a rail to the right with five ads but now we’ve got four at the top, in place of three, and three at the bottom. We’ve gone from eleven ads top, right, and bottom in total, to now a maximum of seven, which is a considerable reduction of course.
The right hand side still allows and will display product listing ads, essentially Google shopping, and some select knowledge panel ads. These are the information type panels on the right hand side. You may see when you search your favourite film star, album, etc.
PPC is mega hot space. PPC is competitive, it’s where the moneys at. Google, Bing, lots of other people, they understand that people want to spend on page search because search intent is one of the strongest drivers for sales, particularly in the e-commerce. Google’s also facing first competition from many rivals. As I said, AdWords is their single biggest revenue stream so their out to protect it. Let’s not mince words.
Another positive of Google is of course less competition of their own ads, i.e. the top versus the right, so the usability issue. Less choice, less confusion. Just keeping the ads top, bottom. By increasing the ads based at the top by a third, having four instead of three ads, they push organic results down. That increases click through rate for paid ads and therefor more clicks equals more spend equals more revenue to Google. Brilliant.
I think a couple of key reasons why they have done this.
Microsoft. You might be wondering why Microsoft’s in that list, thinking Bing is a bit, sort of an also ran. Think about Windows 10. Clever move. Microsoft have been pushing and still are pushing Windows 10, free of charge, as a free upgrade.
What happens with Windows 10? Default browser, Internet Explorer. Default search engine for Internet Explorer, Bing.
What does that do to Google? Reduces it’s share of the market. Very clever from Microsoft. Wise move. It’s essentially bringing them further into play. A few percentage points here and there may not seem massive but in this market we’re talking billions in revenue.
Of course, Facebook is a thorn in the side of, well let’s face it, many companies. Particularly Google, because Facebook is behavioral based, clever algorithmic based, advertising, but it’s super potent. Hugely detailed and tolerable, but more importantly than anything, there’s over a billion people on Facebook. Massive audience. Massive power in terms of advertising. I’m pretty confident they’re pissing Google off.
Then there’s the tertiary market, as you could call it, the content and ad delivery networks such as, you may have seen them, Outbrain and Taboola and so on and so forth. They cut into Google’s display network. Again, bit of a pain for Google. Not ideal.
Good News First
Looking on the bright side, people say bad news first but let’s get to the good news and then we’ll talk all the bad news. Good news, Google’s revenue is going to increase off the back of this. Good news for who. Not you and I. PLA’s and shopping ads, they’re going to get revitalized. There’s less competition on the right hand side now. Essentially Google have made the shopping ads more productive, more effective because there is less decisions to be made at the top there.
Top spots, of course, pushing down organic, removing the right hand side. You’re going to see one thing at the top and that’s ads. There is going to be a high click-through rate (CTR), which is a win if you’re an advertiser in the top one, two, three, maybe forth position. You’re going to get more clicks now.
Sorry SEO’s out there and organic search in general, you’re getting pushed further and further off the page. It’s inevitable. It was always coming. It’s only going to get worse.
Now The Bad News
A lot of people in the industry would disagree with what I’m about to say but I believe there’s going to be more pressure on bids.
For the single that as people slowly react to these changes, bids will go up. If you strip out over half the advertising positions on the right hand side and you replace it with one, then you’ve got the same number of people trying to compete for less space.
Yes could argue that the right hand side got a lot less clicks than the top three spots. It’s sort of like a 90 versus 10 percent in that top spots got in the 90% of the clicks and right hand side got 10%, maybe 15, 20 at a push. Actually by Google adding an extra third to the top, it sort of balances out. I just cannot see it.
I think over time we’re going to see pressure on bids. It maybe 5, 10 percent of bids but at the end of the day if you’re using AdWords on a low margin product, you may feel the pinch.
I think particularly smaller advertisers who cannot raise their forth position in, sorry, the traditional forth positions down the right hand side and beyond, if they cannot raise now into the new top, they’re just going to get pushed out. Their budgets are going to fail them.
You can combat this, of course. You can be more selective in what you advertise and just go with your high margin or your top sellers or if you’re a service business just literally just focus on the key words that have brought conversions and forget everything else. That’s not going to be ideal for everyone.
The other losers, people who don’t manage and optimize their accounts. Pay to click is not cheap. If you don’t optimize you are literally throwing away hundreds, thousands, tens of thousands of pounds. It’s, you know, stupid.
This is an interesting one. People who, should I say businesses who rely heavily or only on AdWords, why do I say that’s bad news for them.
This is from a business strategy position. Google is in charge, they’ve got the rules. Any ad platform that you use, they write the rule book. If you’re only using one strategy, one channel for marketing, you are at their whim.
If they change anything it changes your business model overnight.
We need to look at tackling that. If you’re one of these people who have got maybe one, two at a push, marketing channels, then, I’m going to be producing a few channels to show you how to tackle that and fix that because that’s a dodgy position. It’s a bit sh*t. I would be worried so don’t do it. Let’s fix it.
How Do We Combat This?
How do we fix this? How do we combat this situation?
It’s pretty straight forward as to say, but it’s probably more complex to apply, however ad preview and diagnosis. You’re probably thinking, how does that fix my situation? What I mean by this is you need to be looking and trolling through our ads, making sure that your ads are A, in the top three, four spots. I personally would try and bid three upwards, not four. I think four is going to be the new, sort of, dead zone. You’re too close to dropping off to the bottom.
Quite frankly who ever clicked on the bottom, two or three ads. No hands going up?
Looking at your ads now, seeing where they serve, and you need to make sure that all of the ad extensions that you can use are now being used. The things are site links, callouts, review extensions, and so on and so forth. They essentially extend the shape, form, and size of your ad.
If your competitors aren’t doing it, they will do it eventually.
They make your ad bigger, essentially. You need to be doing that. You need to be previewing your ads. Making sure you’re up there, you’re appearing and looking good. Get all of your ad extensions running. Attract those clicks.
That will mean that you don’t just have to pay more because one tactic, we collectively as advertisers don’t want to see is everyone paying more money.
That only helps one one entity and that is Google. It doesn’t help us all if we are all bidding up to the nine’s just to get to the top.
Instead of bidding-up improve the one overarching factor that reduces your bids and that’s your quality score. Essentially relevance of the advert to the search to trigger in the ad and to the landing page thereafter. I am going to do a video on, essentially hacking quality score. It’s a bit of a sort of trendy word, hacking, I’m going to a video after this about how to get the most out of a quality score and essentially how to drive down your cost per click, and essentially get rid of all the crap in your account.
Finally we’ve got consider of a networks, as I said on the previous slide.
If you’re relying on Google alone, or should I say Google search, than you need to test some budget elsewhere.
Adjust Your Tactics
The tactic I use with our clients is essentially you slice off a little bit of budget. If you spend 5 grand among of 10, 20, 100, million, whatever it may be, just take a sliver. One to five percent or maybe more. Obviously it balls down to your current return on investment from Google ads, margins, etc.
I’d say as a minimum you want to be testing a percent or two. Just use it for exploration.
Don’t think it’s going to be an immediate win but you’re going out here to test on other platforms to make sure that you can actually do business and you’re business scales across other platforms that are on just AdWords because the next time they change the rules, it could really screw you.
There are loads of platforms out there. Facebook, massive. Obvious choice.
Facebook now integrates their ad platform with Instagram. To be honest, the behavioural information, demographic information that Facebook has on us all is quite stunning from an advertisers perspective. You can get so glandular and place your ads so precisely. Facebook is really potent, if you do it well.
I might do a few videos on that.
Pinterest, again, it depends on the context of your business but an interior design company or a lot of retailers can do well on Pinterest. Twitter, I would say is arguably is better for B2B in terms of lead gen campaigns because they have, essentially, lead capture card ads. It’s not, I wouldn’t say it’s cost effective as Facebook. The audience is 20% of the size. The targeting is not as rich and useful but it’s still worth a punt.
I haven’t actually put LinkedIn on here, which I just realized. The reason being, B2C, LinkedIn, not easy. B2B, LinkedIn, decent but my god, LinkedIn, expensive. The cost per click is astronomical. We’ve done some tests. We actually get better results in terms of return on investment from Facebook and other platforms.
Yes, LinkedIn converts quite well but in terms of overall cost, it’s kind of a red herring.
You see these decent conversion numbers but when you realize what you’ve paid for them, I don’t know. I’m on the fence with LinkedIn and I hate to be on the fence with anything. I like to be, taking an opinion or position. We need to do more on it.
There’s loads and loads out there. Display networks, including Google’s display network (GDN), of course, because it is a separate beast to serve, so use it as a separate thing, treat it as a separate thing.
Bing. Yahoo. As I said previously, Windows 10. The adoption is going relatively well. More people are using Bing than ever. Brilliant. That only helps us advertisers because Bing’s more cost effective. Okay, the search market for them is 10, 15 percent of what Google has, but it’s still a decent chunk.
There are people making a living off of Bing, don’t get me wrong. I wouldn’t use it just on it’s own if it was a toss up between AdWords and Bing, I know which one I would go for. The G variety.
There’s ad exchanges as well, which I touched on earlier. Content exchanges, Outbrain is probably the most well known and cost effective. Taboola is a bit more expensive but they have better targeting. I’m not going to go into too much detail because that’s a whole new ball game.
Another type of display that doesn’t use a network, per-say, is direct ad placement on your target market website.
Thinking about where your customers hang out online. What they read. What they look at. What are they interested in. Can you get an ad on that website, be it through Google display, another display network, or directly to the website itself. Then the list goes on and on for pay for click and paid ads.
I am going to do a video, very soon, on how we tackle the right hand side issue, which will focus on quality score. That’s the quickest win. Drive down your costs.
Keep an eye out for that. This is a brand new channel. My first video. Constructive criticism, always welcome. I am going to be doing stuff on, hacking quality, remarketing, behavioural remarketing, advanced remarketing tactics for e-commerce business owners, and lots of other juicy things.
Until them, if you found this video useful, I would really appreciate it if you shared it. Thank you very much. Until the next time, thanks for watching. Stay tuned.