Google advertisers have a lot to contend with this week. Google has implemented the previously announced changes to the AdWords position calculation and billing algorithm, which use a more sophisticated quality score to calculate AdRank. The algorithmic change is accompanied by a simplified keyword state that replaces "on hold," "in trial," and "disabled" keyword states with "active" and "inactive" states.
The really big news is that Google boosted the screen real estate dedicated to paid search ads. In more searches, particularly queries with commercial intent, Google now displays three paid (sponsored) PPC (define) links instead of the traditional one or two.
Google spokesperson Michael Mayzel confirmed a change was made to the sponsored links area of the SERP (define), particularly when PPC results are highly relevant. Google clearly feels the user experience is positively affected by the change. It will also generate significantly more revenue for Google and deliver more clicks to marketers.
Mayzel commented, "Google is always working on improving the user experience and ad effectiveness. For highly commercial queries, we believe that an additional ad above the search results is good for both."
The two changes have significant ramifications for Google AdWords advertisers. Failure to change strategy in response will result in some surprises and less-than-optimal campaigns.
Here are some changes you can expect and appropriate alterations in strategy or tactics you might want to consider:
Based on my research, Google hasn’t generally bumped up to three results for brand searches. So trademark holders and merchants who bid on trademarks may not be affected by the third position. However, the AdRank calculation change may be significantly affected over time as Google tunes the quality score.
With three PPC links at the top of the most important commercial queries, organic SEO (define), while still important, becomes less so. Organic links are pushed further down Google’s SERP, as they are in other engines’ SERPs. Yet a balanced search campaign always includes both organic and paid search.
The additional position in Google clearly escalates the importance of PPC search. Even if you have good organic SEO position, it isn’t enough. If you aren’t in PPC search results, chances are your competition is and will grab some of the valuable clicks you need for your business.
Recent Eyetools research predicts all three sponsored ad listings in Google will get a significant amount of eye-scan activity. That attention will translate into paid clicks. This has already been confirmed by the data we’re seeing.
On a side note, given the media and analyst frenzy, it’s surprising Wall Street analysts haven’t yet discovered Google’s changes. As I write, we haven’t seen much buzz in the analyst community or the mainstream media. One thing’s clear. Google is engineering the perfect storm for the holiday season: more listings and a more accurate relevancy-based yield maximization algorithm. It’ll be interesting to see what happens when "The Street" processes Google’s changes.
Want more search information? ClickZ SEM Archives contain all our search columns, organized by topic.
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Kevin Lee, Didit cofounder and executive chairman, has been an acknowledged search engine marketing expert since 1995. His years of SEM expertise provide the foundation for Didit's proprietary Maestro search campaign technology. The company's unparalleled results, custom strategies, and client growth have earned it recognition not only among marketers but also as part of the 2007 Inc 500 (No. 137) as well as three-time Deloitte's Fast 500 placement. Kevin's latest book, "Search Engine Advertising" has been widely praised.
Industry leadership includes being a founding board member of SEMPO and its first elected chairman. "The Wall St. Journal," "BusinessWeek," "The New York Times," Bloomberg, CNET, "USA Today," "San Jose Mercury News," and other press quote Kevin regularly. Kevin lectures at leading industry conferences, plus New York, Columbia, Fordham, and Pace universities. Kevin earned his MBA from the Yale School of Management in 1992 and lives in Manhattan with his wife, a New York psychologist and children.
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