Sidebar Ads – My Conspiracy Theory

By , Senior Digital Advisor at Hanapin Marketing

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The best, and sometimes worst, thing about paid search is that while everything changes…it all stays the same. I’m specifically talking about the ever-dynamic world that is Google AdWords. There are always small tweaks and adjustments, and usually, the wide-sweeping changes are few and far between. The latest and greatest of these changes has been the removal of sidebar ads.

 

There are plenty of opinions floating around about how or why this change has been rolled out, but the overall reasoning coming straight from Google is three-fold (and keep in mind, I’m paraphrasing here):

 

  • This has been an ongoing test for user satisfaction, so it’s not an “out of nowhere” adjustment
  • The removal of sidebar ads makes for a less cluttered SERP (better user experience)
  • More similarity between mobile and desktop SERPs makes for a more seamless Google experience across devices

 

This is all well and good, and quite frankly I’m not even discrediting those reasons for the change. In fact, I agree with them because even as a search marketer I find myself overwhelmed from time to time with the overall number of characters on a given SERP (yup, I said it…what?). What I would like to address are the additional reasons that I believe may be lurking behind sidebar ad removal or what I like to call my SBA conspiracy theory (insert detective tv show theme music here).

 

Here’s what I think is happening…

 

Advertisers and account managers are becoming more educated and focusing on creative & improving account relevancy thus moving away from the “pay to play” bid increase method of higher ad rankings.

 

As PPC has become a highly competitive market, increasingly so year over year, even our very own Hanapin team has built regimented ad copy testing procedures and diving back into account structure and segmentation as the framework for improving performance. So where’s the conspiracy here? It’s simple – as these advertisers and account managers find ways to succeed without paying more for clicks, Google isn’t making click revenue as easily as they used to. This does *not* mean they aren’t making more profits (more advertisers in general allows the needle to continue moving up and to the right for them), but smarter advertisers means less click bid-driven budget increases for higher rankings.

 

If the engine is making less money on those sidebar ads for that reason, removing them eliminates some opportunity to trust relevancy improvements more than bid increases to drive your brand into the top 3-4 spots above the organic results.

 

Statistics have shown that as the top position ads have become more attractive and take up more real estate on the SERP – searchers tend to choose those ads or an organic result below them (aka not the sidebar ads).

 

You’re going to see a pattern here, but if potential clicks are going to organic results when the searcher doesn’t find what they’re looking for (or just doesn’t like ads period) in the top ads, that means less PPC revenue for the engine. That theory in mind, it makes sense for Google to eliminate those positions as options and, by proxy, require advertisers to bid more for higher positions that remain. Or drop to the bottom positions, or drop off the first page entirely, but I digress…

 

You’ve probably heard Google has doubled down on offering AdWords management services in the last few months.

 

If some mid-tier advertisers (specifically those who show up most in the sidebar ad space) can’t seem to manage in the new PPC ad landscape, doesn’t it reason that they could call on this offer from the Google team for help? The problem I’ve always had with the engine offering these kinds of services is that they’re not ultimately in a position to own the performance – just the clicks.

 

Unlike an agency, you can’t really “fire” Google. If you need to advertise to the largest pool of potential searchers for your brand, their engine owns the vast majority of the search share. You can always take the management back over yourself or take it elsewhere, but your dollars will probably be back to them in some form or fashion.

 

I want to be clear that I’m absolutely not saying the Google team builds and manages accounts in this engagement to fail. I know some have been incredibly successful, but it’s hard for me to believe that is the case in the bulk of those instances.

 

So does the removal of the sidebar ads drive a certain percentage of advertisers into the arms of this Google-managed approach? Maybe. If it does, they could impress an “increase your bids” strategy on the account and if the client agrees…more revenue for AdWords.

 

Let me reiterate for one minute, now that my thoughts and concerns are on the table, that I’m not implying that Google has made this change solely for selfish or revenue-driven reasons. Our Google agency reps have been phenomenal over the last year about:

 

  • Getting in touch with us for betas that are excellent fits for our clients
  • Providing market data for new clients or prospects
  • Coming to our offices to train with us and learn more about our clients and our team

 

That said, you can’t deny that some of what I’m saying makes a little sense, right?

 

My greatest fear for Google is that this change pushes more ad spend, whether it be due to confusion, anger, lack of performance or whatever else, toward social engines or even over to Bing Ads (gasp!).

 

What do you think? What other reasons do you see playing into the decision to sunset sidebar ads? How do you see it impacting your PPC strategy, either now or in the future? Share your thoughts and ideas in the comments section. And thanks for letting me rant a bit!

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24 thoughts on “Sidebar Ads – My Conspiracy Theory

  1. Anthony Pearce

    My thoughts on why:

    1. It makes them more money. This is through a combination of increased CTR on ads 1-4 and increased CPCs due to increased competition from removing 3 ad slots.

    2. They are freeing up space for more Shopping ads in the sidebar. Currently 8 max, I expect this to increase to 12 and maybe even 16 over the coming 12-24 months.

    Reply
  2. Tim Fawkes

    Hi Kayla,

    This is a really interesting take on the sidebar ads issue and one that closely mirrors my own. Obviously it is in Google’s interest to make sure that their revenue from advertising is as high as possible. It is possible however, at least in the short term, that we will see decreased CPCs as people increasingly click on ads (let’s be honest, people want to get what they’re looking for quickly and with 4 paid results at the top of a page people will inevitably click on them more) and CTR goes up.

    The best weapon against rising costs, as always, is optimisation, optimisation, optimisation!

    Reply
    1. Kayla KurtzKayla Kurtz

      Very interesting point, Tim! Maybe the removal of sidebar ads does drive more clicks to the top ads before searchers even get to organic listings (and with less clutter from the sidebar ads). I guess we’ll have to wait and see 🙂

      Thanks for reading!

      Reply
      1. Tim Fawkes

        CPC is affected by Quality Score which takes CTR as an element. Generally speaking the higher the CTR, the better the QS and therefore the lower the CPC.

        Of course advertisers who were targeting the sidebar before may end up raising their bids so that they are still visible on page 1 which could drive costs up. So it’s all swings and roundabouts really. Ultimately, we’ll have to wait and see how it affects things.

        Reply
  3. Joe MartinezJoe M.

    My first thought when I heard of the change is very similar to what you said in the second bullet point in the intro. After a user types in their search query, the results page is a landing page. Just like any dedicated landing page you create, keeping it clean and simple will better guide the user to the action you want them to take. I think that’s what Google did here. Giving the user less options and giving most of the space above the fold to ads will lead to more ad clicks. Just be patient and let the data speak for itself. The change has barely been live.

    Reply
    1. Kayla KurtzKayla Kurtz

      I completely agree that we’ve not yet seen even a small pool of results post-change on this to know how it will go long-term. What if one day the SERP is just one ad and one organic result…..

      I just went meta. Disregard. And thanks for the comment, Joe! 🙂

      Reply
  4. Shashi (Karooya.com)

    Your first two highlighted points seem contradictory. Point 1 says PPC managers are smartly using cheaper side ads to drive incremental traffic. Then next point says users prefer organic listings to side ads. (Eliminating them will “force” users to click on ads.) Am I missing something here?

    BTW, Rand Fishkin informs that they haven’t seen drop in organic traffic since top 4 ads move. One can say that, all the clicks from side ads have now moved to #4 ad.

    https://twitter.com/randfish/status/702408772187234304

    Reply
    1. Kayla KurtzKayla Kurtz

      Sorry for the confusion, Shashi. My first point is actually saying that PPC managers have gotten better at improving their overall relevancy so that they don’t have to pay as much for any position as they would have in years past when the method leaned a bit more toward bid increases over quality score improvements.

      The overall point I was trying to make has little to do with organic, and more for the continual decrease in users clicking on sidebar ads (less revenue for Google) and managers getting those sidebar placements without having to simply bid higher (again, less revenue for Google).

      I don’t suspect we see this change drastically shift data overnight, but I think we’ll see it eventually.

      Reply
  5. Chris Oliver

    This is a bad move for all parties. I suspect its to make the format a better fit for shopping results on mobile displays so that advertisers bid higher for mobile traffic than they currently do. Putting the PPC ads at the bottom of the organic results makes no sense other than to push up the cpc bids for the top 4 positions. If anything it will drive more traffic via the organic rankings lower down the SERPS and force advertisers to consider other options such as Bing, social, organic … even Facebook. Many clients are already questioning the increasing cpc costs so this could be an own goal.

    Reply
    1. Kayla KurtzKayla Kurtz

      Interesting take, Chris – this + enhanced campaigns “forcing” mobile a while back…makes sense to me. I also don’t know that anyone has ever seen great (if any) performance from the bottom ads, so I tend to agree that they don’t serve much purpose other than providing a false sense of security to still be on the first page and increasing bids on the top results. Great points and thanks for taking the time to respond to my post!

      Reply
  6. Jacques N

    I don’t think Google will keep this new layout on pc, they will probably loose too much money and will recome to the actual version… if not, competition and cost per click will explose in the next month loll

    Reply
  7. Jason Lancaster

    1. Google is increasing revenue. They’ve eliminated the ad positions with the lowest CPC and CTR, replacing them with ad slots (the new #4 and more at the bottom of page) that will probably have higher CPCs.

    2. **This is about crippling lead generators.** Google didn’t take sidebar real estate away from ecommerce advertisers. They took it from lead generators, who are left with a serious problem now. Spend much more on clicks and improve their system, or go out of business.

    Remember: Google is going “all in” on the lead gen business. It’s a massive (and growing) industry that serves auto dealers and insurance providers, plumbers, landscapers, lawyers, accountants, etc. etc. Reducing ad space for lead generators/aggregators is a straightforward way to pare back the number of companies that can generate leads in any given vertical.

    In a related note, Google Home Services is growing at a nice pace, and Google Compare is expected to go beyond lead gen for car insurance.

    Reply
    1. Kayla KurtzKayla Kurtz

      Thanks for your comments, Jason.

      I agree that Google is increasing revenue overall. I think they’ve eliminated the sidebar ads as a way to drive up average CPC (especially on the first page) and those increases will likely offset and exceed the revenue from the sidebar ads that once were.

      Great point on the ecomm vs. lead gen aspect.

      Reply
  8. Jonny Walsh

    I think people are panicking too soon, remember enhanced campaign’s anyone, many saw this as one of signs of an impending apocalypse 🙂 let’s let the dust settle before scaring the life out of clients .

    Reply
  9. branden

    there is an extra spot on the top of the page…so this extra position will generate Google more money. The ads at the bottom will get much less traffic…so they will increase their bids to get in top 4 spots.
    The big winner here is the PLAs. Previously the shopping page didn’t receive much traffic…now its being incorporated into the main Google search page.
    Essentially AdWords will become more expensive for position 3 & 4, and the right side is being replaced with Google shopping.
    That’s a win win for Google.

    Reply
  10. Yatin Mulay

    IMHO, this change is primarily aimed at optimizing their mobile revenues. Google is moving the ad experience more “native” and i wouldn’t be surprised if in near future we see “infinite scroll mobile SERP’s”
    ( just like FB /Pinterest/twitter timeline ) wherein the ads would be natively inserted in an infinite scroll instead of moving to the next page..

    Reply

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