How to Navigate the New PPC Structure for Google AdWords

The search giant announced the change in late February, although various iterations of this format have been tested for well over five years now. As often happens when Google begins tinkering with its search engine, this latest change has prompted an avalanche of analysis in terms of how marketers should recalibrate their PPC strategies to maximize the new format. Below are some key takeaways to keep in mind to help you navigate this intriguing new PPC structure for Google AdWords.

1. The top ads will get the lion’s share of the clicks.

This should be no big surprise, as countless studies have confirmed over and over again that AdWords ads positioned above the organic results garner the majority of user clicks from search queries. This was just as true before the right sidebar ads were phased out as it is now.

According to a report published in January by WordStream, over 85% of all ad clicks came from the ads positioned at the top of the search engine results pages, while the side and bottom ads made up the remaining 15 percent. The prominent positioning of ads that appear above the organic results perfectly accommodates the natural tendency of the human eye to scan a page from top to bottom.

2. Some search results will show a fourth top ad instead of just three.

Google has also mentioned that when “highly commercial queries” are being offered (e.g., “hotels in NYC” or “cheap flights to Houston”), they will show four ads instead of three in the top section. This may actually work in favor of advertisers who land this last spot, because the fourth ad position essentially sits in the same place that the top organic search result used to occupy.

Since multiple studies have shown that users typically favor organic results over paid ads, a fourth-position ad in this new format could quite possibly garner significant click volume, as it essentially benefits from the muscle memory of searchers.

3. Higher costs-per-click (CPCs) are likely.

Since the right sidebar ad section has now been eliminated, there’s less on-page real estate for advertisers to display their ads. What this means is that there will more than likely be more competition for the PPC ad spots above and below the organic results, since they’re the only spaces left for advertisers to place their ads.

As with any other supply/demand scenario, now that there are fewer ad impressions available at any given time, costs-per-click (CPCs) may increase since the competition for this space is higher. For this reason, advertisers might need to increase their minimum bids in order to obtain a better ad placement on the search engine results pages. In short, it will probably be a good idea to make allowances in your PPC budget for higher click costs, at least until you can see how this change might affect your campaigns.

4. Advertisers will be able to better take advantage of Ad Extensions.

Sidebar ads were notoriously cramped for space, but with this new ad format, advertisers are now able to better take advantage of Ad Extensions, which are an additional set of enhancements you can include in your PPC ads to make them more interactive. Google AdWords provides several highly effective Ad Extensions including:

• Sitelink Extensions – Extra links that can take users to specific pages within your site

• Location Extensions – Your street address and/or a Google Maps link to your location

• Call Extensions – A click-to-call button (primarily for mobile traffic)

• Review Extensions – Showcases positive third-party reviews of your website or service from reputable online sources

No right-hand sidebar ads means that your top or bottom-listed ads now have more breathing room to be able to use these Ad Extensions. This will give search engine users a more complete picture of what you’re offering, which is likely to boost click-through ratios.

As with any new change that comes down the Google pipeline, the first thing to remember is to keep a cool head and don’t panic. Digital media tends to adopt an apocalyptic tone any time Google makes a major change, but you don’t have to get swept away in the hubbub–just make adjustments as you see fit, pay close attention to what your results are telling you and let balanced analysis guide your decision making for your AdWords campaigns.