In the beginning of January 2016, Google struck with the Panda core algorithm update. Next, we saw major updates on Google AdWords.

You might have noticed one of the biggest changes for AdWords—desktop search results no longer show text ads in the right sidebar. Instead, they appear only on the top of the display above the organic search listings.

Don’t panic! Google has been working on updating AdWords for awhile, and the current updates were not a big surprise to those of us familiar with past updates. Read on for more Google AdWords changes and how to tackle them before they negatively affect your business.

Biggest Google AdWords Updates

Google AdWords Updates1. Ads no longer appear on the right side for desktop search results.

We’ve already covered the first one, but it’s worth noting that this change correlates with the shift to mobile. Because mobile searches don’t show ads on the side, the experience was different for desktop and mobile users. The update fixes this issue by creating a similar experience with placement of ads. It’s important to study your website’s traffic and where it is coming from. Many people are using mobile devices and you might be missing out on valuable conversions from mobile device searches. ComScore research compares digital media consumption on various devices from 2010 to 2014 years. The growth of smartphone usage increased by 394%, compared to only 37% increase in desktop use.

2. Google shows four ads instead of three above the fold for more Highly Commercial Queries.

Highly Commercial Queries provide more relevant results for people searching with a strong intent to purchase.  For example, if you search for “apartments for rent in New York” or “ iPhone repair,” this new layout will provide more relevant results (and better performance for advertisers).

3. Less visual competition for lower-positioned ads

The top four ads will now dominate above-the-fold search results. But, because there is no longer competition visually with sidebar ads, ads that appear on the bottom are likely to receive a higher click-through-rate. However, this might negatively affect advertisers’ budgets, because ads will become more costly..

4. There will be fewer ads—meaning they’ll cost more

These updates came out permanently worldwide on Google and its partners (although not all search partners offered the sidebar). Previously, if advertisers could get away with lower cost per click search terms, the ads would still show up at the bottom of the right side ads placement. Now with fewer ads appearing (about 7 instead of 11), search term bids will increase—meaning advertisers will need to spend more money to stay in higher ad positions.

It’s hard to tell if these changes will lead to increased CPCs for the top four ads spots.There is not enough data to support this argument yet, but we at ThunderActive don’t believe we’ll see less volume of impressions or clicks.

There are a couple of ways these changes might play out:

On one hand, the top four ads will appear and blend in with organic search results, which could result in more clicks.

On the other hand, the competition for the top four ads will be high, and in order to appear on the top of the page, you’ll need a strong PPC strategy with in-depth keyword research. Now is a good time to start rethinking your PPC campaign!

How to Tackle AdWords Changes (and Win)

Google AdWords UpdatesThere are two big ways to take advantage of the AdWords update and come out on top.

  1. Use ad extensions. Extensions were once available only for the top-of-the-page ads (but not the sides). Now, if your ad drops to the second, third or fourth position on the search results, you will be able to use location, sitelink, or other ad extensions to regain a better position.
  1. Perfect your SEO best practices game. Now that ads will be pushed to the top of the page, organic search results will inevitably be pushed down, and no longer be visible above the fold on many desktop devices. Staying on the top of the game for local search results will be even harder. It will require a strong implementation of SEO best practices.

Understanding the Impacts of This Update Will Take Time

There is not enough data to predict what kind of ads will perform better at this point, but ThunderActive attentively follows the impact of these changes so we can use best practices and gain more conversions for our clients.

What we do know is if ads were in positions 5-11 before, they’re most likely at the bottom of the page now, and the number of clicks will decrease.

On the other hand, if the ad was in the fourth position before AdWords updates, now it appears at the top of search results and advertisers should expect to receive more clicks.

The cost to stay in the top four ad positions might increase due to higher competition, but price is only one of the factors in the bid auction that determines where the ad will be placed. The quality of a landing page and keywords will affect the overall performance and health of the successful AdWords campaign.

If you notice decrease in clicks from the ads and no conversions, it is a good time to rethink the your ads campaign.

Not sure where to start? We are a data-driven agency that will provide insights on your customers and help you navigate AdWords changes and come out on top. Contact us to get started!