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Google Removed ADS from Right Sidebar...And so what?

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Google Removed ADS from Right Sidebar...And so what?

 

On February 19th the world of digital marketing was shaken by important news that was later confirmed by Mountain View: searches from desktop will cease to show ads on the right side of the desktop. In their place Google has introduced a fourth sponsored ad on the left side of the desktop, but only for the so-called “High Commercial Queries”, namely searches made by people who express a deep intention to buy.

google-it-001-788x525.jpg


On the contrary, Product Listing Ads (mainly Google Shopping results) and Knowledge Panel (specific information about searches made by users) will remain on the right side of the desktop. In this article I am going to try to clearly explain what happened, why Google has introduced this change, and what the consequences are in terms of organic and sponsored searches. This innovation will be analyzed considering the repercussions for all the stakeholders who are involved: from Google to the user experience and the consequences for the common AdWords advertiser.
Follow our line of thinking and then share with us your valuable view in the comments box.

 

The change and Google's previous test

Let's start at the beginning. Last Friday a company spokesperson stated:

“We have been testing this layout for a long time, so people might see it on a very small number of commercial queries. We’ll continue to make tweaks, but this is designed for highly commercial queries where the layout is able to provide more relevant results for people searching and better performance for advertising”

After all, Google has been testing AdWords ads inside search results since 2010. The peak was reached last December when Google tested the project on a big scale: from that moment users started to see the new layout with 4 sponsored ads on the left, 3 on the bottom of the page and none on the right.

Worries and doubts started emerging very soon among SEO specialists all over the world, but Google rapidly assured them that it was only a temporary situation, as it was just doing a test. But a few days ago it made the change official: no more sponsored ads on the right sidebar of desktop and a fourth sponsored ad introduced above search results, but only for highly commercial queries.

The following two images show the difference between a “classic” query and a “highly commercial query”.

normal-query

high-commercial-query

WHY THIS CHANGE OF THE LAYOUT?

After 16 years we must say goodbye to sponsored ads on the left side of desktop. But at this point one question arises: why the change? The official reason was the intent of offering “more relevant results for people searching and better performance for advertising, but some had doubts, suspecting that this was not the only reason.

As is always the case in such situations, conspiracy theorists recall that Google is not a nonprofit company, thus its aim is to increase its turnover.

It is also important to remember that several years ago, when Google started showing 3 sponsored ads on the left side of desktop (and not only on the right), the revenue from advertising increased by 24%, from 22.89 billion dollars in 2009 to 28.24 billion dollars in 2010. The previous year the increase had been considerably lower, even in terms of absolute value, from 21.13 million dollars in 2008 to 22.89 million dollars in 2009 (and the change had been introduced before the last trimester in 2009).

Clearly there was not an economic reason behind Google's decision to bring about such a change, but considering the figures shown above (and the diagram below), it seems that it had seriously took into consideration the possibility of drawing maximum benefits from the changes.

google advertising revenue 2015

But the path recently taken by Mountain View this time is different. Indeed, Google hasn't added 3 more sponsored ads (as it did in the past), but has removed 5 ads from desktop searches (on the right sidebar of desktop) and added an ad for highly commercial queries.

It is evident that an ad on the left is likely to have a more elevated CTR than an ad on the right, but in order to understand the potential fluctuations of Google's profitability, it is necessary to compare the revenue generated from the new fourth sponsored ad to the revenue that was previously generated by the 5 ads placed on the right side of the desktop.

Even if we left aside competitive and iterative dynamics, it would still be quite difficult to evaluate and compare this data. What we can infer is that, differently from 2009, when the change was clearly aimed at increasing the company's turnover, with the recent innovation Google hasn't only looked at the economic interest: it has added 1 (more performing), but removed 5 (less performing individually).

To my mind, and stepping into the shoes of a user conducting research on Google, seeing SERPs without any ads in the right sidebar gives a sense that these results are more credible and trustworthy than the results shown on the left.

Without any doubt I'm not a “regular” user of Google but, taking into consideration the informal polls I've done to my friends and colleagues, it seems that a “cleaner” page suggests more openness and directness. If that is the case, the user experience has really been improved. And also the psychological status of the user making a search on Google would be more inclined to trust the results shown by a “giant” like Mountain View than the results shown by its traditional competitors (Bing and Yahoo!), which will keep on showing results on the right. It is currently too soon to talk about a move made aimed at increasing brand loyalty, but in a few months we will undoubtedly deepen this aspect.

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WHICH CONSEQUENCES AND IMPLICATIONS ARE EMERGING NOW?

After the definition of the latest Google innovation and some arguments about the possible causes linked to its introduction, let's see the most remarkable consequences for the user, the advertiser and companies that don't invest in AdWords.

  • MORE SPACE FOR THE PRODUCT LISTING ADS

AdWords ads on the right are the only ones that disappear, while Google Shopping offers, just like the Knowledge Panel, will maintain their current position.

The real difference has to do with the space that they take up. Indeed, because 5 ads have been removed from the right, there will be more space both for the PLA (product listing ads) and for the Knowledge Panel, causing a potential increase in the number of product ads displayed on the first page and above the fold. Google hasn't declared its intent to increase them yet, but they've already been noticed in US experiments including pages showing 16 PLA (instead of 8) results on a single page. Is this just a coincidence? Maybe not.

  • COMPETITIVE DYNAMICS IN ADWORDS CAMPAIGNS

The space now reserved for sponsored results appearing on the first page shifts from 11 (as it was until a few days ago) to a maximum of 7. These 7 ads, as evident in the images below, will be divided as follows: 4 in the upper and 3 in the lower part of the page (placed after the 10 organic results provided by Google). Here are two screenshots that clarify the concept.

vendita arancie query google

vendita arancie query google results below

It is easy to infer that the potential, in terms of audience, of the first four ads is much bigger than the potential of the three ads placed at the bottom of the page, because many users making a search won't even scroll down the screen to see the last results.

Such a difference in performance will have an increasing impact on the bid price estimated to reach the first 4 positions in AdWords campaigns if compared with positions 5 to 7.

Before this news, most of the advertisers aimed at one of the first three sponsored positions (those only visible above organic results) with CPC very elevated for these positions. A second category included positions from 4 to 8 (ads on the right), and a third category the positions from 9 to 11 (ads at the bottom of the page).

Now there are only two categories of competitiveness (from 1 to 4 VS 5 to 7) and the real news particularly concerns advertisers positioned in the fourth sponsored position. In fact, given the already mentioned relocation of their ad from right to left on the part of Google, the overall Quality Score could benefit from the increase of CTR with positive results on CPC, that could witness a decrease.

Consequently, those who had ads in the fourth sponsored position could now witness an increase of their CTR and a decrease of their CPC.

On the contrary, those who were previously from the 5th to the 8th position (in other words placed in the right sidebar in the upper part of the page), if they remain in the same position, they will be placed in the lower part of the screen (after all of the organic results), with potential loss of users. Now, the question is: will the advertisers be prone to make offers for the ads placed at the bottom of the results page in the same way they were prone to make offers for the ads on the right sidebar?

If this were not the case, the advertiser could be unhappy with the performance and could decrease their investment or, if AdWords were a fundamental source of revenue for their company, they may be forced to considerably increase the bid price or the score of quality in order to reach one of the first four positions.

As I've written in the introduction, there still isn't enough data to express critical statistical evaluations, but I believe I can say that the overall CPC for the advertiser is likely to increase. In addition to all the things stated before, we should remember that the space for advertisers will switch from 11 to 7 positions, of whom only 4 will have high exposure. If the 35% of the space left to advertisers is removed, and the number of advertisers doesn't diminish, it is difficult to think that the CPC can remain constant.

  • SIMILARITY IN LAYOUT BETWEEN MOBILE AND DESKTOP

Another consequence that can be noticed at first sight has to do with the decrease in the difference of visualizing search results between desktop and mobile. On mobile devices, indeed, there were no results displayed on the right, but only three results placed on the left of the page. This aspect won't change for the moment. Now, with its 4 ads at the top, the screen of desktop results will be structurally and visually very similar to the mobile one, instilling an idea of homogeneity to an ever more cross-device user.

  • MORE TRUST IN THE PROPOSED RESULTS

According to the first insights that appeared in the market, it seems that the more compact and cleaner design of the new desktop computer Google interface can establish a kind of neutrality and credibility to the average internet user’s eyes. If this assumption was verified by empirical data, a less insecure and more confident user would be an undoubted benefit for Google and for the advertiser. The fewer the barriers that hinder the user, the higher the conversion rate of the advertisers will be. And more satisfied advertisers generate higher revenue, first of all for Google.

  • POSSIBLE CTR REDUCTION OF THE ORGANIC RESULTS

Adding a sponsored #4 ad in the top left, the first organic result will be shifted lower on the page, passing definitively from 4th to 5th absolute position for the “highly commercial query”. This doesn’t seem a relevant variation? To proceed to the analysis of this aspect is important to consider at least three aspects:

  1. When all the other conditions are equal, the more an organic result (organic or sponsored) appears high in the SERPs, the higher its CTR will be, as will the number of visits and clicks that it will receive from the same user’s search.
  2. The results that mostly receive visits are those visible to the user without getting them scroll vertically in the browser, the so-called “above-the-fold” results.
  3. There are multiple devices from which a user can search on Google, and different devices have different screen resolutions. This means that the "above-the-fold" content is not the same for all users, but they depend closely on the screen resolution of the used device.

At this point we decided to conduct an analysis to understand, with this new Google layout, what percentage of space "above-the-fold" was left to organic results, considering the 5 main desktop screen resolutions. The question is: what are the main resolutions now? There are several statistics about, both national and not, but data from different research is conflicting and often not upgraded. However, in our Google Analytics accounts, we have access to the statistics of several websites operating in very heterogeneous markets. Instead of relying on conflicting statistics with the difficulty of understanding which one to choose, we analyzed the data of the unique ORGANIC visits between November 2015 and January 2016 for the 25 most visited websites we have under our management, and we pondered the aggregate data of monthly unique visits.

Example of individual data input (for Italian websites):

dati di input risoluzione dello schermo 2 dati di input risoluzione dello schermo 1

IMPORTANT: Based on our research’s objective, despite the analyzed sample of users being a limiting factor compared to the national scene, the advantage of using statistics elaborated by us compared to the existing ones also affects (in addition to the temporal proximity of the data) the type of analyzed traffic. Indeed, we filtered, in Analytics, just the traffic from desktop computers. The mobile resolutions were not included in the valuation, because this change by Google affects exclusive variations in searches from desktop computers. In the same way, we excluded in the valuation all the users from different traffic sources compared to organic traffic because, as previously mentioned, the valuation of the different screen resolutions must exclusively concern the organic traffic. At the end of this exhausting process, we identified the results of our analysis in the following main italian computer resolutions:

  • 1366×768 px
  • 1920×1080 px
  • 1440×900 px
  • 1280×800 px
  • 1280×1024 px

Clearly, as shown in the two screenshots above, the exact percentage with which previous resolutions contribute to total website traffic is different, but what matters is the total contribution that these first five resolutions bring to the overall organic traffic, and not the relative order of the first five. With surprising uniformity in the analyzed websites, I can say that in most cases the percentage addition of the 5 considered resolutions contribute to a website’s total organic traffic for a value between 60% and 70% (from a desktop PC).
 After defining the main resolutions, we proceeded with the understanding of how much varied the "above-the-fold" space for each of these related to change introduced by Google with the addition of a 4th sponsored result in purely commercial searches. 
Below, you can find some screenshots of how searches results will appear with the main display resolutions for a “highly commercial query”.

  • 1366×768 screen resolution:

cambiamento-1366x768

  • 1920×1080 screen resolution: rimozione-ads-1920x1080
  • 1440×900 screen resolution: rimozione-nnunci-1440x900
  • 1280×800 screen resolution: rimozione-nnunci-1280x800
  • 1280×1024 screen resolution:rimozione-nnunci-1280x1024

As you can see, even qualitatively, most of the screen is now occupied by sponsored ads. It should be considered, indeed, that a sponsored ad can also take four or more lines thanks to ad extensions made available by AdWords, while an organic result usually occupies less space in terms of pixels, in the SERPs.
In addition to qualitative considerations, we deepened the analysis and empirically tested the new Google layout for each screen resolution listed above to understand what the visibility percentage dedicated to sponsored ads and that related to “above the fold” organic results is.
Then we compared this value with the previous one (relative to before the new layout insertion), and we summarized all in this table:

pre-post-layout-visibility-comparison

IMPORTANT: The values in the last column are absolute, and not relative measures, otherwise the percentage variations would be considerably higher.
Example: in the first line of the table there is an absolute loss of 31%. This means that, considering a 1366x768 resolution, before the new layout the associated space to organic results was about 57% of the user’s display, while after the new layout the associated space to these results was about 26%. The absolute variation is equal to 26-57= -31.

The relative variation, however, should give different information, which is:
Considering the total organic results visibility, what is the visibility percentage lost with the new Google layout? In the 1366x768 resolution case, the variation is equal to 31/57= 54% (much more than 31% relative to the absolute visibility gap).

Finally arriving at the conclusion of the argument, we can’t say that loss of organic traffic “above the fold” visibility isn’t considerable. And, shown by numbers, this loss is inversely proportional to the size of the screen resolution: the higher the resolution, the lower the loss of absolute and relative visibility of the organic results in favor of those sponsored ones.

CONCLUSIONS

To summarize, the change is official and already active. With this innovation, Google will stop showing sponsored results (ads) on the right part of the screen, which will remain for the exclusive use of the PLA campaigns (Product List Ads) and of the Knowledge Panel. In addition to that, which is universally valid for all screens and all devices, Google will show a 4th sponsored result in the sources from desktop PCs, that are defined arbitrarily as “highly commercial”.

Then, the search results will all be shown on the left up to a maximum of 7: 4 in the upper part and 3 in the lower part of the page (compared to the maximum number of 11 reached by the previous layout). Because of this variation, is plausible to expect a loss of the organic traffic visibility for searches with a strongly commercial nature. While, for other search, it must be considered that the lack of ads on the right of the screen could cause the opposite effect: a user will be less distracted by advertising and could click on the organic results more frequently.

Regarding AdWords advertisers, the elimination of 5 advertising spaces out of 11 will most likely generate an increase in the total CPC, but this increase will not be proportionally divided over the remaining 5 ads on the page. For the first three positions virtually nothing will change, while for the fourth place we must weigh the two forces: on one side, the increased desirability of such position will increase competition and the CPC; on the other side, the new placement on the left of the screen could seriously increase the CTR and Quality Score of the ad, with a consequent lowering of the CPC.
The change of layout in search result will also cause important variations from a user’s point of view. The design of the search pages will now be very similar both in that it is made by a desktop PC and by a mobile device, transmitting a linearity and consistency of proposed results. The removal of 5 ads on the right of the screen seems to make it already feel, at first sight, like there is greater neutrality from the search engine, and all of this can only facilitate the user's decision-making process.

This better experience, however, could clash with the risk of a decline in the intrinsic quality of the first offered results, because in theory, sponsored results (that are based not only on the quality of the site, but also on the maximum availability to pay for each click received by the advertiser) should provide a lower quality than the organic results (that do not consider in any way the economic availability and are exclusively placed according to the Google’s organic algorithms). In other words, with the same content, in the sponsored results those who pay the most are positioned higher and, above all, even those who have lower quality content can be in the top 4 positions just by investing more.

With this, now we’ve arrived at the end of the analysis. I hoped to be able to transmit the positive and negative potential implications of this change, trying to stay impartial in the discussion as much as possible. My job is not to influence the opinion, but form it and inform it!

P.S. I would be very curious to know what you think of this new Google layout. No matter whether you are a simple user of the network, an SEO specialist or an astronaut, your opinion helps everyone to grow!

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Stefano Robbi

C.E.O. of NetStrategy. A digital marketing enthusiast with a strong penchant for quantitative data analysis, he started the digital heart of NetStrategy® back in 2009. In addition to his passion and skills in search marketing, Stefano has a specific education in strategic marketing, acquired during his M.Sc. in Marketing Management at Bocconi University and his previous experience at Microsoft Italia.

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