The big news for advertisers to come from Google lately (and yes, I am ignoring the organic algorithm change for right now) is that they are changing where paid ads are going to appear on the search results page. For all of the claims that Google is a power-hungry, money grubbing monster, I have to say that as an advertiser, I don’t generally see that being the case. In fact, I am normally frustrated by things they do in order to improve the user experience because they run contrary to what I would like as a marketer. This latest decision, to move paid ads from the right-hand rail to the bottom of the page is no different.
The first issue that we have to consider is user behavior. Thanks to eye-mapping technology (they plop users down in a chair, tell them to navigate the search page, and have a camera mounted on top of the monitor to track their eye movement as they look around the page; not clear if they hold the lids open Clockwork Orange-style), studies have been done telling us how people actually view the SERP (search engine results page). Combined with click data on the various links, we have a pretty good idea of how users see and interact with the search engine results, and as Google has changed the layout and result types that show up, user behavior has changed as well:
Basically, what we have seen in the past is that most people tend to view the page top-to-bottom, and only occasionally do their eyes wander over to the margin, unless it is a relevant part of the answer to their query (like a map or a video). Thus, Google feels that putting those paid ads that don’t make it into the prime top-of-page slots will actually be better served at the end of the organic results, due to the natural progression of users through the listings.
I know that for organic results there is some basis for this, as listings in positions 9-10 often actually have a better click through rate than those in positions 7-8. The idea is that we tend to gloss over the middle results, paying the most attention at the beginning, and then at the end when we are forced to decide to either click on something on the first page, or make the (increasingly rare) decision to see if page 2 of the results will have something more to our liking.
Google thinks that CTR will increase at the bottom of the page compared to the right rail, but we will see.
The other issue is a purely mathematical one for advertisers. Where you once had 6-8 paid search results on a page, it will not be uncommon to only have 4 results, which is what I tend to see now when I get these search result layouts. Two on top, two on bottom. Now, if there are fewer first-page ads available, then simple supply & demand tells us that competition, and thus cost per click, is going to go up.
Google is not saying that 2nd page ads are going to see improved performance, so this is strictly a cut in inventory. Everyone wants to be on the first page, so get ready to see your CPCs go up (and presumably CPA as well, all other things being equal).
Now, I have already heard the argument that this is Google’s way to make more money from ad revenue. Higher CPC = more fees for Google, right? Probably not. Think about it how much CPCs would have to increase in order for them to make up for the revenue lost by having their total first page ad inventory drop by as much as 50%. If anything, Google is most likely costing themselves money, because people who find that their bids have moved their ads to the second page are just as likely to pause the keywords as they are to increase the amount they will pay for them.
I don’t love this change as an advertiser, but it is once again going to be hard to argue that it isn’t better for the user.
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