AdWords Changes One Month On: Tsunami or Storm in a Teacup?

Now the data is in. It’s been over a month since Google removed AdWords ads from the right-hand side of desktop search results. And the impact of that change hasn’t always been as search marketers predicted.

When Google made the change, there was no shortage of opinions on the possible impact. And, depending on who you heard it from, the change would have the devastating effect of a tsunami, or scarcely cause a ripple.

It’s refreshing then to see the candid confessions of those who got some predictions wrong.

Take the team at Philadelphia-based Seer. In a well-constructed analysis of the changes seen for their clients, they got some things right but admit to some surprise results at odds with their expectations.

We’ve reviewed campaigns for several of our clients, and while there’s some consensus with Seer in our findings, there’s small differences from one account to another.

One point of difference, perhaps indicative of a less competitive market, is that when ads are now shown in positions 5-8 we see a drop in clickthrough rate (CTR) for our clients (where Seer reports an increase). With that drop in CTR comes an increase in Cost Per Click (CPC).

So what can we agree has been the effect of the changes? We can’t fault the Search Engine Watch report from Rosetta’s Jason Tabeling, if only because consensus is easier to establish given the limited number of findings.

And remember:

• We are looking at desktop search results on Google only.
• We are only looking at generic (non-branded) keywords.

While results can vary between accounts, this is what the data in aggregate tell us:

• There’s less ad inventory (that is, fewer ad impressions).
• In total, top of the page ads traffic is up. This is particularly true for ads in positions 3 and 4 (when shown at top of the page).
• Overall, clickthrough rates are up and CPCs are down.

Why should you care?

OK, OK, OK.

We’ve got this. Even if the fall in CPCs caught pretty much everyone by surprise.

And, yes, it’s more a storm in a teacup than a tsunami.

Like most people, we thought that (like clickthrough rates) CPCs would also go up. And they have — but only for some ad positions (exactly which varies by account in our analysis).

Clickthrough rates are up as we expected, but drop when ads are in position 5-7 (although, to be fair, the drop is more like sliding down a gentle incline than falling off a cliff).

So, then, the winners:

• Ads in position 4, when shown at top of the page. They’re getting a bucket load more traffic than they were previously. Yes, the CPCs are higher, but if you want that traffic you have set sensible maximum bids, right?
• Google — the higher clickthrough rates are offsetting the overall drop in CPCs, and ads in positions 1-4 are, more often than not, paying more for the privilege than before. And, of course, shopping ads are now showing on the right-hand side of commercially-oriented search results (in those countries lucky enough to have them).
• Consumers who want less ads on the page. These are the same people who tell you they never click on them anyway, and now have even less to click on.

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