On Friday, February 19th, Google started removing the right-hand rail ads from desktop search result pages. The worldwide change was progressively rolled out last week in all languages. The new Search Engine Result Page (SERP) architecture ends up eliminating one of the main characteristics that differentiate desktop from mobile queries. It particularly affects what Google calls “highly trafficked queries,” which impacts popular travel-related searches as such “hotels in New York City.” Needless to say, this change is very important to the hotel industry, but what does it mean for you as an hotelier?
36% Less Text Ads per Desktop Search Engine Page Result
The total number of text ads that appear on a desktop Search Engine Result Page (SERP) has decreased from 11 positions to seven. However, in a move aimed at increasing visibility for relevant advertisers, Google is now serving four text ads instead of three in the mainline area above the fold (the area positioned in the upper half of a web page and visible without scrolling). The change is also affecting the bottom of the page, where text ad inventory is increasing to three positions. From a quantitative perspective, the impact on the desktop Search Engine Result Page is a 36% decline in ad text inventory.
Does 36% Less Ads Mean Higher CPC?
Since Adwords is a bid auction system, it is logical to think that less supply and more competition will lead to higher prices for Cost Per Click (CPC) campaigns. However, there may be more at play than a straight forward supply and demand effect. More top of the page ad impressions may result in a lower CPC if you are a top of the page bidder. You may also receive a higher Click-Through-Rate (CTR) if you are in position three or four. Furthermore, it is not yet known whether right rail advertisers are willing to pay the same price for a bottom page ad with less impressions.
One thing is certain however, the change will continue to bolster ad relevance. As a result, we can easily predict that it will penalize advertisers with low quality scores who haven’t properly optimized their text ads, ad extensions, website and negative keywords. In other words, bidding on the right keyword with the wrong ad, or the wrong keyword with the right ad, is about to become more expensive.
Cendyn/ONE Monitors Change in CPC for Branded and Non-branded Hotel Keywords
At Cendyn/ONE, we are continuously monitoring the impact of the new desktop SERP on branded and non-branded text ad clicks, impression volume, CPC, and CTR. So far, we haven’t seen clear evidence of a high increase in CPC. In fact, the data shows that shortly after the change went into effect, CPCs actually dipped and then slightly edged up. However, we believe it is critical to let the dust settle as the rollout continues to get a better sense of the long-term impacts of these changes. Should you have any questions on your specific campaigns, please do not hesitate to contact your account manager.
Early Recommendations: Capitalize on Three Major Opportunities
While it is common to associate a major change with bad news, the new desktop SERP can be used to your advantage:
It has created more opportunities for ad extensions, such as call, call out, review and sitelink.
The addition of a fourth ad at the top of the page effectively pushes your competitor’s organic results below the fold. This is now an opportunity to convert guests away from the competition, especially if they are not diligent with their own search marketing efforts.
Incorporate the ‘Hotel 3-Pack’ in your SEO strategy. In many SERP instances, the pack has become the first organic content visible to the consumer.