Google Phases Out Right Hand Sidebar Ads

Google has just initiated a dramatic shake up to the paid search landscape with its latest modification to the results page: the phase out of sidebar ads. The worldwide update officially, deemed “global and permanent” by several AdWords representatives, rolled out on Friday afternoon, as searches for high-volume keywords no longer produced ads via the right hand side of the SERP, rather up to four ads above organic results and the rest pushed down to the bottom of the page. The change only appears on desktop, with PLAs remaining untouched (still being served on the right and above organic on the left), and with no effect to the mobile results page. In addition, Google has indicated that on “commercial queries” (those searches that are critical to both PM Digital’s retail and lead generating clients) a 4th paid ad will sometimes be added to the search results on the left side of the SERP.

2.22 Google Blog

2.22 Google Blog 2


What’s Google’s motive?

This move is, quite honestly, a little baffling to us. While some reports have said the change is indicative of Google’s push for mobile, this really has everything to do with the impact on a user’s search experience on desktop. In the recent past, Google has tested and implemented changes to the mobile search interface to give users a better, more seamless experience, and thus have urged advertisers to take advantage of the changes to optimize conversions. But eliminating the side rail ads is something wholly different; it will not only change the consumer’s desktop experience, but it will leave them with less options, which could potentially not bode well for advertisers or Google.

The driving motive of this update is pretty clearly stronger ad performance. The addition of another ad to the crucial “above the fold” area will offer the opportunity to pay for a more premium position. And while this may in fact increase performance of those ads, it’s may also hurt ads that fall below organic…

The impact will touch paid and organic

The most immediate concern in our minds is: this move will absolutely drive up costs. Bid competition for the top 4 placements for brands’ top keywords will likely escalate immediately, as position-based strategies become more critical for exposure and traffic. And advertisers who can’t afford the top placements on the results page may take a pretty substantial hit to their click-through-rates (CTRs). An addition of a fourth ad on the top of the SERP will also push organic listings further down, something that has been happening fairly consistently over time. Brands will have to pay more and more for paid ads to compensate for the decrease in traffic from their free, organic listings.

We suspect an impact on revenue for advertisers, but how will Google’s revenue be impacted? Will the increase in CPC revenue that Google generates from top position advertisers out-weigh the loss of advertisers that take their money elsewhere, rather than continue to invest more and more for each click?  We’ll be watching…and commenting.

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