Right Rail Ads

Late last week, Google announced that they will be removing the right rail ads from desktop searches, and now will only serve ads at the top and bottom of the SERP (very similar to the current mobile ads layout).

First, let’s get one thing straight: Whenever Google says they are testing new changes, the only number they are looking at is total ad revenue. Meaning the removal of the right rail ads has shown an increase in ad dollars in Google’s pocket. Google is certainly banking on the increased in cost per clicks for positions 1 – 3 offsetting the ad revenue from the right rail ads. Simple economics say decreasing supply will increase demand and drive up costs.

That increase will come from the fight for relevancy for the top three or four positions, depending on the search query. If your ad is not listed above the organic results, you can expect a large decrease in your ad impressions coming from desktop searches. I pulled data from several accounts to see what we can come to expect when Google pulls the trigger on the change for all search queries. To do this I pulled an average position keyword report for non-branded search terms and filtered them by desktop vs. mobile.

More than 95% of mobile impressions are from ads in positions 1-3, and more than 97% of clicks come from top three positions. When looking at desktop volume, 72% of impressions and 77% of clicks come from ads in position 1-3. I would expect the desktop numbers to shift more in-line with what we are currently seeing in mobile. Meaning 20% of desktop impressions will be virtually removed from the mix unless you can pay a premium to get your ads in the top three positions.

For years I have worked with advertisers that rely on being creative with their ad dollars, meaning they often could not afford top placements but were able to generate cost effective traffic in positions 4-8 on the right rail of the SERPS. This change will either result in these vendors needing to ante up to compete, or needing to find more cost effective advertising channels because the cost of desktop search does not justify the return.

I do anticipate those with strong organic search presence will experience a click increase from the change because there will be less ad options available to end users. This is certainly one of Google’s bigger moves in search over recent years and should be monitored closely to understand how this could shift your ad dollars and account performance.

Winners

Google, Google Shareholders, SEO

Losers

AdWords Advertisers (specifically small- to mid-size budget companies)

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