Commentary

How Will Google's Latest Search Layout Affect Small Retailers?

Google recently shook up search results by announcing the rollout of a new layout for its search engine results pages (SERPs), which has been tested for several years. The aim is to return more relevant results, but each time Google applies a change, marketers are fearful of its impact on their Web site’s ranking and paid-search campaigns. How will SERPs change? What does this imply for your business? This article aims to explain the answers to these questions in more detail.

What will the new SERPs look like?

Until now, the right-hand side of SERPs featured AdWords ads. Now it will either be empty, feature product listing ads (PLAs) or contain a Knowledge Panel. The top results will also be impacted by this change: for "highly commercial queries," four ads will be displayed rather than the traditional three. 

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These changes confirm Google’s strategy to put more emphasis on Product Listing Ads and Google Shopping. Last month, the search engine was reported to be testing three new features to improve this type of ad: displaying 16 Shopping products in the SERPs, placing PLAs in its ‘Image’ search results and adding emojis to these ads. 

SEO: fewer organic results per page for commercial queries

This new layout will change the organic results for “highly commercial queries," which show a strong intention to buy. For this type of search, a fourth ad will be added at the top of the results page, pushing down organic results.

AdWords: smaller retailers will particularly feel the effect

Overall, this change means fewer inventories will be available for textual AdWords ads. However, the right-hand side ads make up a small proportion of the overall click share in comparison to ads at the top. Knowing this, and given the higher click-through rates for top-spot ads, the additional top spot will more than likely cover the click share of the right-hand side ads.

The reduced inventory for textual ads will likely increase competition and CPCs. Small retailers in particular will feel the effect, as they will have to consider their own margins if they want to compete. It also means fewer inventories for long-tail keywords, from which small retailers get most of their traffic as they generally can’t afford generic terms. Their traffic from these sources will then be reduced significantly.

Google Shopping: e-commerce sites should focus on PLAs

The consequences of this change are much more positive for Google Shopping. It means more space available for Product Listing Ads, which are proven to perform better for retailers than textual ads. According to Explore Consulting, Google Shopping ads generated better Web site interactions over AdWords: when comparing PLA performance versus AdWords, PLA visitors had a 16% lower bounce rate and a 201% increase in average visit duration. This is because they have a richer format than textual ads, featuring images, reviews and calls to action. Google is constantly testing new features to make them even more attractive and increase their performance.

In order to cover the likely fall in AdWords traffic, retailers should focus on Google Shopping. The additional space for PLAs is a good opportunity to seize: given their higher performance compared to textual ads, retailers can expect better results by adopting them.

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