February 2016: Changes made to Google ad layout! We clarify what it means for you.

Reports of Google testing four ad positions can be tracked all the way back to 2010 when they experimented with an extra slot of mortgage related searches. More recently, people started to notice it appearing for a broader range of terms, something that immediately stood out to any paid marketer with the long-term standard of 3 ads. Last week, the Google ad layout changes became a reality, that anyone will notice after a quick search.

We know Google continuously tests new layouts, extensions and information snippets in their never ending quest to improve user experience as technology advances and habits change. However, over the weekend it was confirmed this particular change of removing the ads from the side results, while introducing an additional 4th slot would take immediate global effect.

It’s not often we see a change with potential to heavily impact performance, especially with no announcement prior to it being made to track and adapt. This means SEMs now need to pinpoint the change in their data, analyse the impact and adapt strategy moving forward.

What exactly has been changed?

Google has removed ads from the right side of results, adding a fourth ad slot above organic listings for “highly commercial queries”. This has effectively limited above the fold text ad slots to a maximum of 4.

Ad positions 5-7 are now below organic search results, which also means fewer ads overall on the page. While this isn’t a new placement there has been a significant increase in their presence this week.

The only exception to this rule is Google Shopping which may appear in two formats, both of which you should already be familiar with. The first being a 4×2 box to the right-hand side of results, and the second at the top of results displaying 5 products in a single line.

Overall this has removed a lot of clutter from some search pages, especially highly competitive terms such as “Car Insurance”. It’s also much closer to the layout we come to expect on mobile devices where we’ve previously seen changes lead to paid dominating above the fold.

How could this impact performance?

With the change only being made a few days ago it’s still too early to accurately determine the impact, but simple supply & demand will lead us to believe competition will increase for these highly visible top 4 slots.

Average position will also play a big factor in the level of impact. If a campaign is mostly in position 1 the change may be positive; the ads will remain top of results but less competition and distraction from side ads could increase CTR.

On the reverse of that if average position is 4, the campaign may see visibility plummet as impressions are demoted to the bottom of page. However, a low average position does not necessarily mean you will not show in these positions at all.

Top positions are generally much more visible and have stronger CTR, so despite a low average position the majority of traffic may be coming from higher ranked impression. This data can be determined using the “Top vs other” segment within AdWords, and you’ll want to compare the two figures in terms of both impressions and clicks.

Google Ad Layout - Post
You may find a high proportion of clicks are coming from top positions, so appearing on the side added very little value overall. This would cushion the impact on bottom line, and the additional top slot could improve that proportion to work as a positive.

For example, over the past 30 days one particular client in a highly competitive industry has an average position of 5.0, with 73% of impressions on Google search credited to ‘other’ positions, but 84% of clicks comes from ‘top’ positions.

This means CTR is almost 14x higher in top positions, and appearing on the side of results added very little away from large volume of impressions.

Should I be worried?

Nope. Remember the switch to enhanced campaigns, forced close variations, shopping becoming a paid platform? These were all changes that greatly worried people at the time, but ultimately the best account managers quickly adapted to embrace the change, using it as a way of gaining a competitive advantage. The Google ad layout changes are very much a similar case.

They key is to make data driven changes; keep a close eye on short term data, monitor the competition (both auction insights, and their copy) and analyse what opportunity and threat exists to leverage an advantage.