After much speculation, Google has confirmed that all text ads will be removed from the right hand side of the search engine results page. These will now be replaced with PLAs/Google Shopping ads and this will roll out on all desktop searches.
So what is happening to text ads?
Google is replicating what you currently see on mobile devices. All texts ads will now be found above and below the organic search results.
In fact, for what Google calls ‘highly commercial queries’ there will now be as many as 4 text ads above organic listings. These could be searches for hotels, holidays or car insurance for example.
Despite there being more text ads at the top, the addition of PLAs on the right will drop the overall amount of text ads from 11 to 7 (4 at the top, 3 at the bottom).
With more ads, will this affect the clicks to organic listings?
Yes it probably will. This will perhaps infuriate retailers who spend a lot of time and money to get their site ranked well for certain keywords.
The graph above already shows how powerful top ads are in regards to click through rate (CTR), so another ad will only increase the amount of clicks to these ads.
Will the CPC of text ads go up?
Almost certainly, the fact that there will be 4 less text ads on the first page suggests these ads will be more competitive.
Therefore, if your budget is relatively low it will be worth monitoring your CTR over the coming months to see if this drops.
Adwords are becoming increasingly popular for retailers year on year and it’s a massive revenue generator for Google. In fact, it generated 17% more revenue for Google in Q4 from 2014 to 2015, which equates to a staggering $19.08 billion.
So how important are PLAs to retailers?
They are massive for retailers and this shows in the fact that year on year retailers are spending 47% more on PLAs. The visual element makes them a great proposition for consumers.
eResearch has shown that PLAs get 50% of all click throughs and this will probably only increase with the recent changes.
Google has responded to the popularity by recently rolling out assortment and shopping insights, which allows retailers to view reports on possible new product ranges and popularity on certain products.
This process is still in its early stages, Moz recently reported that results of the PLAs/4 top ads went from 2% of all searches to about 20%.
It will be interesting to see in the next few weeks what impact this has on the CPC of text ads, the importance of SEO and the spend on PLAs.
As a retailer what affect do you think this will have on you? Is it a good move from Google? Leave your thoughts in the comments box below.
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Written by Matt Warren
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