The effect of Google’s paid advertisement policy on businesses

The effect of Google’s paid advertising policy on businesses 

“What is up with the ads on Google at the moment” – that is a question I am getting asked a lot since the recent change in the way that Google displays its ads. Two things are important to say at the outset. Firstly, this change has been carefully considered and was a long time coming, so it is probably here to stay. Secondly, it will affect businesses – both in terms of organic search and PPC advertising.

What Has Google Done?

Let’s look first at what exactly Google has done. In the past a search result’s page would have 10 organic results. In addition there would be up to 11 AdWords results – ads – on the page. They were displayed above the search results, below them, and in a column on the right hand side.

Google has now reduced the total number of ads on the page to seven. It has dropped the right column completely and increased the number of ads appearing above the organic search results to four. Three more ads appear below the search results.

 Why Has Google Done This?

 The simple answer to why Google has done this is to make money. Now for the more detailed explanation:

Google’s most important priority is not actually selling ads to PPC advertisers. Instead it is giving people who use its search engine results that answer their query. There are lots of factors involved in delivering that, but they include delivering the results in a format that matches the device that the searcher is using, and giving them the best links at the top of the page.

 For many years Google has been orientating its strategy towards mobile users as more and more people use mobile devices to access the internet. The right column of ads was not visible on mobile devices, so there is logic in removing it, as it harmonises the user experience across devices.

 That brings us to delivering the best possible result for the searcher. This is the part that Google says it has done a lot of research on. It has applied this change of policy primarily to search terms that have high commercial value, i.e. on terms where there is buying intent. From Google’s perspective, a PPC ad is likely to as good, if not better, at meeting the needs of the searcher as an organic result, so it should be displayed first.

What Does It Mean For Businesses?

  1. Paid results now have even more precedence over organic results

 The most obvious impact of this change is that on many search terms, the organic results do not appear on the page until you scroll. All you see when you first search are the ads. Secondly, position one in organic search in reality means position five on the page. This may affect traffic to sites that rely solely on SEO and search engine rankings.

  1. Advertisers who bid high enough to appear in the top positions on the first page might see improved results from their campaign

Google believes that users are better served by showing them four ads at the top of the page. That means click through rates must be good. More data will be needed before this can be definitively stated, but it might mean that advertisers who get into one of the top four positions may see increased levels of traffic from their PPC campaigns. 

  1. The CPC (cost per click) for ads on the first page might increase

This is another area where more data is needed, but it seems logical that the CPC for ads could go up. After all, there are now only seven ads on a search results page when they’re used to be 11.

So, there are potential benefits and potential negatives to Google’s change. The only thing that is for certain is that businesses will have to get used to it, monitor it, and adapt.