Google’s Update to SERPs

If you’re in the Paid Search game and haven’t heard about the recent changes to the search engine results pages (SERPs) then it’s time to wake up and smell the increased competition. Things just got a lot more challenging. Yes, things have changed, but everybody still has opportunities to grow their search performance.I’m sure that most of you are already well aware, but for those that aren’t, the changes are as follows:

• No more ads on the right hand side of the search results (apart from PLAs and knowledge panel ads)
• Up to 4 paid ads at the top of the page
• Up to 3 paid ads at the bottom of the page

Since Google launched this well shouted about update at the end of last week, I’ve seen a lot of emotion about the changes:

• PPC is dead!
• It’s no longer a level playing field!
• Small businesses are being pushed out of the market!

Google’s reasons for this are pretty clear. Higher CPC’s and better CTR’s from top positions will equate to better revenues and profits from adwords. Increased competition in the fight for these top spots will surely increase CPC’s even further.  I’m sure that the Big G will claim that the changes deliver a better user experience too and there are definite strategic advantages, but there is no doubt the primary reason is revenue.

Turn Your Concerns Into Inspiration

For those of you that are having major concerns about your future leads and profitability from adwords, let me ease your worries a little.

Firstly, these changes are just for desktop and tablet. This SERP format has been on mobile for a long time already and if you, like most, are seeing increasing percentages of mobile traffic and you’ve been taking all this advice to be optimising for mobile, then this takes away a decent percentage of the problem.

Secondly, paid search advertisers aren’t really the biggest losers here – organic listings are. They just lost their 1st spot to PPC’s 4th spot. On much of the testing I have done, particularly local searches, you have to travel a fair way down the page to get to that all important 1st organic ranking. If you’re an advertiser who has been hovering around 3rd-5th positions, these changes could be very beneficial for you.

Thirdly, since the changes have been rolled out, most of our campaigns have seen improved CTR’s, increased average positions and little (if any) drop in click volume at all.

But what about all the small businesses who are trying to compete against the big players? I understand the concern. My initial reaction was exactly the same. We have a number of PPC clients who compete in markets against 3 or 4 big players in their industry that have bigger budgets and have the economies of scale that allow them to work to tighter margins. That advantage for the big players has always been there. Small businesses and their agencies have had to play the game a lot smarter. Google are just making this more difficult, progressively. A couple of years ago, the changes in adwords’ keyword matching system took away our long-tail stealth-mode strategies. We’ve had to combat that through retargeting, RLSA’s and clever use of behavioural and demographic targeting – we’ve learnt to understand our audience better! We’ve had to become more than PPC specialists. We’ve become better marketers.

Become Better Marketers Again

This change will once again improve our understanding. Yes, the big players have more of an advantage, but once again, the companies who succeed in adwords won’t necessarily be the ones who can afford to pay the highest CPC’s (that hasn’t been the case for a long time). It won’t even be the advertisers who manage their Quality Scores the best (although that of course helps). The winners will be the businesses that manage their user experience the best. With greater data insight, by understanding your audience better and driving paid traffic to a landing page that delivers to the wants and needs of that audience, you’ll get better conversion rates. If you’re in e-commerce, these actions  can also achieve higher ticket values. Those advertisers that can achieve better conversion rates and gain more value from those conversions can afford to pay higher CPC’s without it digging into their margins. They’ll be the marketers that can achieve success in this now even more competitive market place.

For the forward thinking companies and agencies, these changes from Google have again put emphasis on the need for audience understanding and CRO of that audience.

For the rest of you… perhaps you should be considering Bing Ads.

I’m sure those that are shouting the loudest about this latest change are those that have least understanding about where their budgets are going. AdWords is Google’s source of revenue, so they’re going to want to monetise it as much as possible – that’s basic business. Anyone not seeing this needs to get a grip!

The whole thing can be summed up with two lines –

1. Small businesses and their agencies have had to play the game a lot smarter.
2. Those advertisers that can achieve better conversion rates and gain more value from those conversions can afford to pay higher CPC’s without it digging into their margins.

Big players in markets should hold no fear for anyone who does PPC properly (as we both do!). Instead of placing all your time into reducing your CPC’s (you should spend time doing this though), accept that they are going to increase over time and pay just as much, if not more attention to increasing your conversion rates. At a basic level, take your conversion rate from 1% to 2% and you can afford to pay double the cost for a conversion without affecting margins.