Before we even get started, I must warn you…this post is rant-heavy.
Ok, so many of you may have noticed the cool new yellow Ad labeling happening on paid search ads in the SERP’s this week on Google.com making paid search ads stand out more prominently on the page. If you have no idea what I’m talking about, Bryant Garvin put up a good summary of the change with his Breaking – Google Changes the SERP – Images are King and PPC Holds the Key to the Kingdom post over on Search Engine Journal.
Unfortunately this inevitably means higher competition, higher CPC’s, higher budgets, and lower visibility for some unlucky advertisers.
Let me explain what I mean and why I’m pissed about this change:
PLA Competition Will Heat Up & Increase Costs
PLA’s will be moved to the top of the page above the paid search listings for all searches. Yes, all searches. Bryant’s article says the change will be complete by December 4th, but my Google team has confirmed the roll out to be complete by December 9th. Either way, soon we will see PLA’s take their new spot at the top of the page on all searches.
This means it’s more important than ever for advertisers running PLA’s to get their products to surface in the abbreviated Google Shopping snippet pulled through into the SERP’s on Google.com. There’s only room for five listings in this space, so the battle for these top spots will heat up even more than they already are. Competition for this space is about to get really hairy. I mean, it’s already hairy, but it’s about to go DefCon 1. I don’t know about you, but I’m not interested in getting into a bidding war with big boxes like Home Depot or Target.
Increased competition leads to increased CPC’s and of course increased budgets to support the increased CPC’s. Way to go Google…you’ve just given yourself a raise. I guess I better buy more Google stock before the 9th!
Top Ad Position Competition Will Heat Up & Increase Costs
PLA placement at the top of the SERP’s means all other paid placements get pushed down one ad position. So, ad position three gets booted over to the right side of the page. Along with screwing up all of my ad position data, now I have to bid higher for the only two available ad spots at the top of the page if that’s my transactional sweet spot.
Competition will get even hairier for these two top ad positions and CPC’s will rise and budgets will need to rise to accommodate those higher CPC’s. For all you apparel vertical advertisers that have been able to get anywhere near break even or positive return on non-branded terms…pfft, those days are over!
Overall CTR Loss
Yup, I’m already seeing CTR’s come down due to this change. With PLA’s overshadowing everything else on the page, we’re going to inevitably lose out on clicks on regular search ads to these eye catching images. To recover the lost CTR we have to boost bids to move up in ad position now that we’ve all been pushed down one ad slot and so begins the CPC inflation ripple. Are you seeing the trend yet?
Advertisers Without PLA’s Lose Out
I happen to work with at least one advertiser who does not have an eCommerce website due to the extreme customizability of his products. He’s going to have an even harder time getting his ads visible over his competition, since they do have eCommerce websites and run PLA’s.
Advertisers in this situation will see their traffic and conversion volumes fall even further and will need to battle for top ad positions. Bigger bids, bigger CPCs, bigger budgets.
So, as you can tell I’m not super excited for this additional stress right in the middle of the holiday shopping season. I’m going to have to put my brain cells to work to figure out my combat strategies. No worries. I’ll share with you once I’ve got some ideas. I think a focus on quality score along with cleaning up product feed and keywords inventories to ditch any low ROAS products or terms may be a good place to start.
I don’t know, what do you guys think? Am I over reacting? Do you have an action plan to head off some of this potential damage already? I’d love to know what you think!