Last week, Gord Hotchkiss wrote about the interesting testing Google is conducting in search results pages. Today, I'd like to make some speculations about this development. A friend sent me a screenshot two days ago that had no right-hand ads. I brushed it off as something weird with her settings. I did notice she had Instant turned off and it was only occurring on her searches in Chrome. My initial thought was there would be no way this would ever roll out. It would be revenue suicide in Q4... or would it?
Working with several large ecommerce clients, I've found an uncanny urgency to SEM in November and December. A poor Q4 in search can be devastating to a business. What would you do if all of a sudden your ads that were strategically positioned with an average rank of 4 in order to deliver optimal ROI just stopped serving? Would you accept the fact that you cannot get those sales efficiently -- or would you enter a bidding race to get to the top? Once there are fewer advertisers on the page, these terms probably will perform better for you -- but just how much will it cost?
This has to be quite alarming to small and medium-sized companies reliant on search. What if the big brands reach into their deep pockets and see it as an investment? If cost per click skyrockets, then Google could make out very well in Q4; however, some businesses would suffer.
You have to take a step back and look at the user experience. What Google is testing here presents a much cleaner page, and assumably a better experience. The limited real estate available to paid search advertisers will require them to step up their game and strive for the best relevance, click rates and conversion rates. Quality Score optimization is only a part of it, though. The average rank formula is:
Average Rank = CPC Bid * Quality Score
Now, cost per click may go up, but so too should click rates, maybe even enough to offset the bid increase. Conversion rates should climb, too, as the competitive landscape lightens, so higher click costs may even be completely justifiable.
But what happens to those companies that do get pushed out? Is there potential backlash from consumers towards Google if a change in the search results page drives companies out of business after a devastating fourth quarter?
While the verdict is still out and this testing is in its infancy, advertisers cannot afford to wait. In the meantime, I recommend pushing your limits and trying to conquer those top spots now. It's the holiday season and conversion rates and cart sizes are already on the rise. Focus now on setting the bar for Quality in your category and buckle up for an exciting ride. I love working on Black Friday and Cyber Monday -- and I'm ready for whatever Google throws our way.
Editor's note: Yesterday's Search Insider was mistakenly bylined Derek Gordon. The error has been corrected, and Rob Griffin now gets full credit here.
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