AdWords advertisers are reacting to Google removing ads from the right hand side of desktop search results. Google explains that the move is geared towards improving the user experience and aligning with mobile search results. They tested removing the ads for a few months, and as of last week, those ads are gone.
This matters to advertisers, because it means that the number of spots they can advertise in for a given keyword has just dropped, significantly. Now, globally, there are just four ads showing above the search results.
Increasing the AdWords Scarcity Problem
While most advertisers would be happy to get unlimited traffic from Google, the ability to show your ad is limited, and so we find ourselves facing the fundamental economic problem of scarcity. With fewer places to show an ad, the scarcity pressure has increased. Fewer ad slots translates to fewer ad impressions. That drives the need for efficiency, so that you can try to maintain performance for the same advertising budget.
In the auction-style AdWords network, scarcity has always been a significant issue and campaign optimization is never ending. However, we’re talking about a huge decrease to the number of available ad spots and impressions, so this newly introduced scarcity for the same keywords demands advertisers to make decisions around the following:
- What to advertise.
- How to advertise.
- Who to advertise to.
Of course, Google isn’t forcing you to address these choices. You can always throw more money at it, or spend your budget somewhere else.
Here is some advice on what you can do to protect the performance of your budget, given the recent changes.
Keep an Eye on Things
Make sure you’re monitoring your overall account performance, especially key sets of targeting (keyword, geo, etc) that drive high conversions and/or high cost. Short-term, high impact changes will probably be obvious to you, like if a set of keywords starts costing you twice as much overnight, or week over week. But look for the less obvious changes that are hidden beneath an overall trend. Are particular sets of traffic performing worse? My guess is that you’ll see further drop off in keywords with a lower quality score.
Boldy optimize your Account
Protect your converting traffic. Boldly optimize your ads and landing pages to tighten the relevance to target audiences. Increase your clickthrough rates, reduce bounce rates, and generally please the users. Do this frequently and aggressively until you’re sure of what portion of that performing traffic you can retain. You may have to let some go – remember, Google is forcing you to make some hard choices here.
If you can’t afford to let that converting traffic go, chances are you’re going to have to spend more for it, even if you do optimize aggressively. Shift your budget away from the traffic you aren’t sure about, or know is too expensive, and spend more heavily on the audiences you need.
Spend Your Budget Somewhere Else
Google AdWords is expensive. It wasn’t always that way, but over time the competition has gotten fierce and the ROI isn’t as easy to come by as it used to be. It’s still a hugely important channel, because it has so much traffic, most people can’t afford to ignore this. But, this is a good time to test more of your budget outside of paid search. That doesn’t necessarily mean moving away from Google. YouTube advertising, for example, is gaining a lot of traction. If you haven’t already done any Facebook advertising, you should absolutely put some budget there. If you want to be successful there, it’s a little more intricate than just posting a text ad, but it can certainly work for performance marketing. If your audience skews younger, check out Snapchat. It’s hugely popular with 18-34 year olds, and the ad formats are genuinely interesting. Try out programmatic advertising, with tools like Rocket Fuel and Criteo.
Google’s removal of the sidebar ads isn’t exactly great news for advertisers, but there are more options than ever for spending your advertising budget. Whether or not you were ready to, it’s time to choose how you’ll respond to these changes.