Google announced on Feb. 19, 2016 that they will no longer show ads on the right side of the search results.

Ads will appear only at the top and bottom. Google will make the change in all languages, all countries. See TheSEMPost and SearchEngineWatch.com.

I checked: if you’re signed in with your ID, the ads are gone. If you’re using Google without signing in, some ads are still appearing (Feb. 22). This may change in the next few days as the rollout is implemented.

Why Is Google Doing This?

  • Google is moving towards mobile search as the standard. There are no side ads in mobile. 52% of searches at Google are now on mobile devices.
  • Google is going to use the space on the right side for its Knowledge Graph, those boxes of information about search topics.
  • Google will continue to show PLA (Product Listing Ads) on the right side (see the ads in the red circle below). Large companies sign up for PLA to create these ads. These are generally consumer products.

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Implications

  • Bid competition will increase. The only way to be in the top ads will be either Adwords optimization or increase bids. However, Adwords optimization is complex, so the vast majority of advertisers will increase bids.
  • Smaller advertisers will be forced out. They can’t afford higher bids, don’t have the skills to optimize, and don’t have the time to do this.
  • Most advertisers don’t pay attention to their accounts, so I expect there will be a flurry of activity by active advertisers to readjust and then it will settle down after four-to-six weeks.
  • Ads at the bottom won’t matter much; few people scroll to the bottom of the page anymore.
  • As for the users, most don’t realize the first three or four links are ads. They will click on the ads.

Discussion

  • Some say Google is doing this in order to get more money for the top ads. But Google has consistently chosen to prioritize the user’s experience (which is based on the quality of search results) instead of ad revenue.
  • I think it’s an effort on Google’s part to create a consistent experience in both desktop and mobile.

The Data

Instead of speculation, how about some data?

  • Here is the data for a large client (thirty thousand keywords, 41 languages worldwide). They had 16,000 clicks in the last 30 days:
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  • Another account with 5,000 keywords in 14 languages. They had 63,000 clicks in the last 30 days:
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  • Feb. 19: Google removed the right-side ads.
  • Feb. 29: Here is the week-vs-week data. Both graphs below show the past week vs. the previous week. Both graphs show Adwords clicks from desktop users. In week Feb 14-20, the ads were on the right side. In week Feb 21-27, there are no ads on the right side.
  • SEO-Harvard
    SEO-MIT
  • The first graph shows a drop in sessions from 3,413 to 3,091 (322 fewer sessions), which is 9.4% fewer sessions.
  • The second graph shows a drop in sessions from 12,237 to 10,764 (1,473 fewer sessions), which is 12% fewer sessions. (Click for a larger view.)
  • Google said the right side ads get about 14% of the clicks. By removing the right-side ads, clicks should drop 14%. That’s fairly close to these graphs.
  • March 7: I updated the graph. Regrettably, I have only one graph for this week. In the other account, we increased the budget from $10,000 per month to $40,000 per month, which increased the Adwords sessions, which changed the data significantly. So let’s look at this graph (which is an update of the previous graph with 53,425 sessions):
    mit
  • Data for the week Feb. 14-20 isn’t good because Google made the change in the morning of Feb. 19, so the last two days for that week aren’t full days. The best comparison is week Feb 7-13 vs Feb 21-27 and Feb 28-Mar 5. Those are three full weeks of data, global traffic (130 countries), 5,200 active keywords, no significant holidays. As you can see, data changed Feb 7-13 (12,785 ) vs Feb 21-27 (10,764) by -15.81%. For Feb 7-13 (12,785) vs. Feb. 28-Mar 5 (12,920), traffic increased by +1.05%.
  • Changes included increasing bids slightly, optimizing the keyword CTR , optimizing the ad CTR, adding more keywords, and A/B split testing of ads. Cost-per-click rose from $0.14 to $0.17. The budget stayed the same ($2,314 per week). As you can see, although the number of ads dropped from ten to three, the number of sessions increased +1.05.

Summary: Good for Top Advertisers; Bad for Weak Advertisers

What does this mean?

I expect a poorly-managed (or an ignored account) will suffer severely because 1) most of their ads were in the low positions, which no longer exist and 2) their ads were in low positions due to low Quality Score, CTR, etc.

In contrast, a well-managed account will see an increase in impressions, clicks, CTR, conversions, and sales.  Efficient advertisers will get more clicks because 14% of clicks were going to those low-quality side ads. Those clicks now now go to the ads at the top.

I think Google made a good decision. They reduced clutter and got rid of weak ads. Both produce a better experience for users, which is Google’s goal.

What You Can Do

  • Watch your PPC metrics: Look at bids, impressions, clicks, CTR, CPCs, conversions, CPL, and CPA. Look in analytics for trend changes in paid search. Go to Google Analytics and set the calendar span to the last six months. Go to Google Analytics | Acquisition | Channels | Paid Search. Also go to Google Analytics | Acquisition | Adwords | Desktop. Watch the trends.
  • Increase bids. This is the easy solution. If your ads aren’t in the first three positions, increase the bids. However, the easy way is often the expensive solution. Higher bids lead to higher cost-per-click (CPC). You’ll pay more.
    A friend met with Google, which said the 4th ad gets only 2.5% of clicks. Google’s recommendation is to increase budgets (surprise surprise) for keywords with 4th position ads in case they hit budget caps.
  • Optimize your Adwords account. This is the hard solution. More ad groups, more keywords, keywords in various match types, better ads, and better strategy. Lots of work but you’ll get higher ranking and lower CPCs. How much? As much as 80-90% lower. Really. A well-optimized campaign can bid lower and rank higher than competitors.
    For example, improve the information in your ad to get a higher CTR, which will increase the ad’s rank and lower the CPC.
    You can also maximize the ad’s vertical height. Use SiteLinks, which allow you to add links such as Products, About, Contact, and so on to your ad. You should also add your address (street and city) and telephone.
    If it’s relevant, use PLA (Product Listing Ads). These will appear at the top right side.
  • Optimize the SEO: If paid marketing is too expensive, improve your SEO. If you can show up at the top, you get traffic for free.
  • Use social media: Don’t rely on Google for your traffic. Increase your traffic from other channels, such as social, newsletters, and content marketing. Look at analytics and see which social sites are sending traffic. Improve your placement in those.
  • Use content marketing: Develop world-class content, such as books, ebooks, white papers, videos, podcasts, and so on. Your audience will share your material, which means it goes viral.

Don’t rely on one channel. Try all channels, see which performs best, and improve those channels.

(Thanks to Maxime Dupuy-Chaignaud, whose suggestion about SEO led me to write this last section).