How Changes to Google's New AD Layout Will Affect Paid Search Advertising

It turns out Google is making more changes than just an updated logo. Google is also updating its algorithm, which will have a major impact on advertisers. The search giant will no longer show paid search ads along the right side of desktop search results. Additionally, Google is going to show four paid ads (up from three) above the search results for what it calls "highly commercial queries" or high-value search terms.

Google’s official statement on the change:

"We’ve been testing this layout for a long time, so some people might see it on a very small number of commercial queries. We’ll continue to make tweaks, but this is designed for highly commercial queries where the layout is able to provide more relevant results for people searching and better performance for advertisers."

Why the change?

It is likely that Google is hoping to drive up the mobile spend by advertisers. They could also be trying to align a user’s mobile and desktop experience. This makes sense: Mobile search traffic surpassed desktop traffic for the first time in 2015. Increases in mobile traffic will be a growing trend over time as consumers continue to rely more and more on their mobile devices. By eliminating paid ads from the right side of its page, Google will be able to make even more money.

What does this mean for advertisers?

Buying the ad slots above search results just got much more competitive, making that ad space more expensive for advertisers and driving up CPCs (cost-per-click). Organic search results will also be affected by this change because Google is making room for one more pay-per-click (PPC) ad at the top of the page. This will bump down organic results and in turn decrease their value. With this ad space becoming more expensive, advertisers may have to turn to other marketing channels to make the most of their client’s media dollars.  

You can expect Google to continue to make updates; advertisers will have to adjust as that happens.