On the 19th of February, a change was confirmed by Google which affects the layout of paid search ads on search results pages, through desktop devices. This change involved completely removing text ads showing on the right side bar, and having up to a total of four text ads display above organic results on the top of the page, whilst showing three at the bottom. This rollout was tested at various times late last year, and the change is expected to occur late February as a permanent fixture.

Note: This change affects desktop results only. This rollout does not affect mobile search results pages, which never displayed ads on the right-rail.

During the testing phase, Google’s view on the matter was that a new design layout would be able to provide a higher user experience, especially for high-end and valuable commercial search queries. By removing the right side of the rail for desktop search queries, Google is aiming to decrease the number of paid ads shown, and possibly increase revenue from the costs incurred by advertisers. Not all search queries will show four paid ads in search results. Industry experts have identified Google’s target of ‘high value’ keywords, whereby the examples of care insurance, home loans and Chicago hotels were given. Google will show four paid ads at the top of search results, up from the previous figure of three paid ads, for what the search terms it deems valuable.

Early Indications: What Are The Results Like?

If your ad is already within the top three ranking slots – this latest change is likely to benefit your AdWords performance and results. Research from Moz shows that top positioned ads already get 14 times the number of click-throughs than the ads positioned on the side or bottom of search result pages. Following the latest update, initial data shows that ads positioned 5th and below (i.e. ads on the bottom of search result pages) are declining in the amount of impression share gained. Conversely to this, ads on the third and fourth spots are improving dramatically, with click-through rates improving by almost 15%. Following the addition of the fourth ad spot, organic search results have been negatively impacted as some desktops and tablets no longer display results above the fold. About 36% of SERP’s feature the four-ad block at the top, meaning that the 4th paid position now occupies the previous position of the first organic search result. This means that SEO results are getting pushed further down the page. Highly-contested keywords, where features such as news, images and local maps further exacerbate this situation as they further take up space in the organic real estate.

Predictions: What Does This Mean For CPC’s?

The rollout of this change means that fewer paid ads are now available from search results pages. Professionals and others in the industry are predicting that the less number of ads may lead to higher prices due to the simple notion of supply and demand.

This may even impact the number of users who are advertising through Google AdWords: higher costs may reflect when businesses review their situation and see if they are willing to bid the same amount to show on the bottom of pages, instead of paying the same amount for the right-side of the search results.

The new layout may cause an influx in the volume of impressions for the top page ads, suppressing CPC amounts. However, more top spots would also mean lower prices for the top, as the CPC would be distributed.

This change may be in line with Google’s stance on aligning the mobile and desktop experience. On mobile devices, ads were never shown on the right-rail, instead it always employed a top-down approach. Speculations are that Google may be trying to encourage advertisers to drive mobile spend. Through the reduced inventory on desktop, Google can incentivise advertisers to spend their remaining budget on mobile, thus increasing mobile CPCs.

This change would no doubt affect businesses who advertise through Google AdWords. Eliminating the ads on the right rail will have an impact on those who cannot afford top placements. The cost for advertisers may have an inadvertent result on the overall revenue for Google as well.