This new Google policy will result in many advertisers seeing a big drop in traffic, as their ads will appear at the 14th position on search result pages instead of at the fourth position.
This will also have an impact on Cost Per Click, as more advertisers will compete for the top three slots—similar to Google display ads that appear above organic results on mobile devices. In our experience, the top three positions produce the best results on mobile, and it looks like this will now apply to desktop searches as well. Advertisements in fourth position will now have reduced impact, as they will appear at the bottom of the page, which may result in low CTR and low traffic.
Quality Score is going to play a key role with this change, as only high quality ads can appear on top of the page, irrespective of bid price. So keywords with low quality scores will see a huge drop in traffic. This means that we will be seeing fewer high quality ads on Google.
Traditionally, most advertisers largely ignored long tail keywords, or didn’t focus as strongly on improving their QS. These keywords will play a key role now—if we can establish good quality scores for them with relevant ads and landing pages.
PLAs will get more visibility now, as the number of text ads will be reduced, and PLA advertisers will see an increase in CTR. Advertisers who run PLAs must review their results as a consequence of Google’s new policy.
If you’re a marketer, you need to run a simple Adwords report comparing “Top vs. Other” segments and see what kind of traffic you’re getting. If your maximum traffic is for “Top” you will see an increase in CPC, so you will want to increase your budget outlay. If you’re getting most of your traffic from “Others” you must work on improving positions and QS for your keywords to avoid large drops in your traffic.
Companies that can afford to advertise in top positions will see an increase in competition, so we can expect higher quality results. In general, the quality of ads goes down in the lower positions, as they are dominated by affiliates and often feature lower production values.
Fewer premium advertisers will result in less complexity, and this will probably reduce the importance of bid management platforms. If we find out that low ranking keywords are not performing, we can eliminate them as they will not get much traffic in the future. This will result in a smaller number of keywords to use in campaigns, and further simplify account management.
So far, Google advertising has been the most affordable and easy to test channel for small advertisers with limited budgets. Such advertisers will now need to increase their spending to get good results from the Adwords platform.
Watch this space for more updates!
By Sudheer Dayanand@Team Position2