Google SERP Changes: Advertisers Pay for More Traffic from Google

Last week, Google made a major change to their search results page for desktop computers, eliminating the right hand column of paid search ads and increasing the number of ads that could appear above natural search results from three to four (check out our POV on the impact of this update). Since this change, SEM managers and Google advertisers have been closely monitoring to see how it’s going to impact the landscape. Many speculated that the impact would be significant, both in terms of paid search CPC and natural search CTR and traffic. Some have even speculated that this was an opportunity for Google to increase profits from AdWords search.

So, we're now one week into the new SERP format. What was the impact and what does it mean for advertisers?

Traffic shifts from Organic to Paid….again.

iProspect has analyzed performance results for over 100 of our clients, and the initial data suggests that natural search is the loser for this particular Google update. For brand queries, organic click through rate dropped 8% in a pre/post comparison, indicating that the addition of the fourth ad at the top of the page is decreasing the searcher’s propensity to click on the natural search listing.  For some verticals, this change was even more pronounced—for example, B2B clients saw an 11% decrease in organic CTR for brand queries and an 18% decrease for non-brand queries.

Yet, overall paid search CPC actually declined 2% week-over-week for brand keywords. Does this mean Google is actually losing money on the change? Absolutely not! The decrease in organic CTR means more overall paid search traffic from brand terms, and that 8% adds up!  This is another in a series of shifts in the SERP layout that has shifted traffic from Organic to Paid. Read more about iProspect’s findings in the mobile SERP

As with most Google changes, some verticals were hit harder than others. Travel clients saw a particularly aggressive increase in cost for their non-brand terms. Organic CTR for travel declined 11%, while paid CPC jumped 33% week-over-week. In contrast, the retail vertical actually experienced a decline in CPC, contrary to many predictions. 

What’s next?

Google has run limited tests of this new SERP format off and on for several years, but the tests only affected a very small percentage of traffic.  Since the full change only went into effect one week ago, the ultimate impact of the change is yet to be determined—and this is certainly not the last time Google will make a major change to the SERP. There are things advertisers should be doing to support the most effective search marketing strategy.

From a natural search perspective, a focus on content is increasingly important, and that content must be optimized to speak to the ever-changing needs of the digital consumer. Users will always click on natural search listings, and an effective presence in this cost-free SERP zone is critical to maintaining traffic and visibility.

In order to avoid significant impact on marketing dollars, advertisers should focus on improving quality score in their paid search campaigns and aligning budget against the most critical audience segments─ collaboration with SEO in this area is key. Advertisers with custom audience segmentation through effective use of RLSA and/or Customer Match are best-suited to swiftly react to this recent release and re-allocate funds as necessary.

About the data:

  • Based on Google AdWords and Google Webmaster Tools data for over 100 clients
  • Traditional paid search only—data analyzed excludes PLA, Hotel Ads, YouTube, or GDN