There have been rumors, but Google has confirmed that it will remove all sponsored search results from the right hand side, except for PLA (see example below) and knowledge panels. The total number of ads on a search page will decrease to 7 (up to 4 at the top, from 3 before, and another 3 at the bottom).
There are many guesses, but the truth is that Google is known to test (literally) everything. They have probably tested the new format and have found it more successful.
How come? that answer is easy: Users have learned that sponsored ads aren’t necessarily the most relevant, and the right side ads are very noticeable as sponsored. The more “native” looking ads listed above and below the organic search results are less conspicuous and thus more clickable. If you take a look at the Google SERP (Search Result Page) design in a historical perspective you’d see a shift from marking the sponsored results (again I give you exhibit A, with sponsored links’ area above the organic results marked in pink), to presenting a more blending
How does it impact advertisers?
Costs will be higher –The math is simple: less results above the fold (or on the 1st page in general), higher cost per each
SEO will suffer – Even today, a single cleverly designed ad (with an array of sitelinks and preferably a map) can push all other results below the fold. Imagine what 4 ads will do. Some guess this would push organic results straight out of the 1st page, but I doubt that.
eCommerce gets more room – PLA is still there, any questions?
What should advertisers do?
That really depends on the advertisers.
- Start by estimating your costs. Several of my clients have given up entirely on Google’s paid search, simply because of the CPC. If you’re a small business, chances are prices are too high for you (a good rule of thumb for a SMB is to multiply the CPC by 50-100 to estimate the Cost Per Acquisition. If that cost is higher than your margin, you’ve got no business in Google Adwords I’m afraid).
- Compare to the competition. Some of my newest clients have ruled out Google altogether and a focusing on Facebook (again, really depends on the industry you’re in. Some have found that Facebook is a bit too crowded for them). Facebook’s latest move might be in your favor.
- Use Google’s features. Some companies use Google’s features strategically, pushing the competition down by adding all sitelinks they can think of.
What does the future hold?
I think that Google will continue down this path, and eventually even put ads in the middle of the organic SERP as a countermeasure to the native content (Taboola and Outbrain to name the biggest) performance.
Google will perhaps realize that it pushed SMBs (who were Google’s bread and butter in the early years) out of the game and come up with a new feature for those mom and pop pizza places etc.