As you may have noticed there has been a pretty significant update in the world of Google AdWords this week – blogs are being posted in their hundreds, everyone’s worrying about their CPCs and no-one quite knows how it will all pan out.

To help you through this particular minefield we have put together the key information so far and how we believe it will have an impact going forwards.

What is going on?

In a nutshell Google has removed the paid search ads from the right-hand side of the search results for desktop users.

As well as removing these paid search ads, Google has tweaked some other areas. Above the organic results will be three paid search ads, or four for “highly commercial queries”. There will also be up to three paid search ads below the organic results, making a maximum of seven ads on a page.

So the search results will look like this:

Google RHS Ads

How will this impact advertisers?

There are some key areas we believe will feel the impact of this change – it’s much too early to say how much of an impact there will be, but keep an eye on the following…

Jostling for the Top Three or Four Positions & Higher CPCs

It is well-known that the top paid search results get the better CTRs, with the positions on the right-hand side producing less traffic while still providing good visibility. With no ads on the right-hand side we envisage advertisers that were in these positions increasing their bids to show in the top three or four positions in the search results. This would result in higher CPCs as the competition for these top positions heats up.

Some ads will show at the bottom, but that involves the user scrolling “below the fold” and past all the organic listings to view ads, which suggests that these “footnote” ads will get a much lower CTR than the original right-hand side ads.

More Traffic

Ads showing in the top three or four results may see an increase in traffic through an improved CTR due to the lack of distracting ads on the right-hand side. Without the search ads on the right to distract the user, the focus will be drawn to the top of page ads, helping to make these top positions more coveted by businesses.

Brand

Ideally you will have a brand campaign in place to protect your company and ensure you are getting as many clicks from brand searches as possible.

However, if you don’t have a brand campaign and other advertisers are bidding on your brand terms, you could conceivably have four ads that aren’t yours showing above your organic listing (providing you appear in number one position organically). The visitor would have to scroll past these ads to get to your listing, which could make a significant dent in your traffic and/or sales.

Ad Extensions

With Google now displaying several ads at the top of the page, these could well become more prominent with advertisers using the full spectrum of ad extensions available. These maximise the space taken up by ads and we could see organic results being pushed further down the page.

Niche Companies and Small Businesses

There are lots of niche companies and small businesses out there who have been happy to pick up cheaper traffic from the right-hand side without trying to compete with the big boys that dominate the top of the landscape.

This change from Google could be very significant for these advertisers and we can see them having to focus more on longer tail search terms. They might also be limited to investing in very specific areas that are highly relevant to their business rather than chasing the more generic high volume traffic.

Shopping

With a large space to fill on the right, Google will surely be looking at ways to add in some extra features. We think there could be an increase in the number of Google Shopping Ads that are displayed – these are proven winners and Google must be salivating over what it could do with a larger canvas area.

SEO

SEO looks like it will potentially suffer some dips in traffic with up to four paid ads showing above them. This will mean the organic results will drop further down the page, and in some instances the organic results could be fully “below the fold”.

The Google Team is A Savvy Bunch

Google has removed the ads on the right, but it has performed various tests over the years to find out what impact this will have on the revenue from paid ads. The team have clearly not taken this decision lightly and it seems very unlikely they would be happy to lose revenue from the removal of the right-hand side ads without being sure they could compensate in other ways. This leads us to believe there will be an uplift in CPCs as well as Google utilising other means to monetise the right-hand side and expand out the shopping ads.

Feel free to tweet us @RocketMill and let us know whether you think Google’s decision to remove right hand side ads is going to benefit your business.