May 302013

AdWords Brand Ads Shifting to Bottom of SERP Leading to Lower Sales

About two years ago, Google announced that they would begin serving paid search ads at the bottom of search engine results pages (SERP). The reasoning behind this change was supposedly to improve the user experience with a new layout that “[fit] better into the user’s flow as they scan the page.”

Purportedly, ads served at the bottom of the page had a higher average click-through rate than side rail ads in tests conducted by Google.  Sounds like everybody wins, right?

Not necessarily.  What if your ad is the only ad on the page and it still shows in the bottom position? Even worse, what if it’s your brand ad?  Fast forward to today and that’s exactly what’s happening to some of our clients.

Part of Google’s rationale for serving brand ads at the bottom of the SERP is the lack of competition on certain brand terms. When searching for these brand terms, Google predicted that customers would either click on the organic link or scroll through the entire SERP and click on the brand ad served at the bottom of the page.

If this hypothesis proved correct, the benefits of shifting brand ads to the bottom of the SERP were obvious; for clients with a strong organic presence, it would cut ad spend by increasing the likelihood of receiving a free click. Additionally, potential customers would get a less cluttered SERP, presumably yielding a better user experience.

While initially plausible, the problem with this theory is that, in some cases, our clients aren’t seeing the detoured traffic come through on their organic listings. Instead, we’re seeing a decline in all-site sales growth.

For one client we studied, the absence of paid search ads above the fold did not result in website revenues shifting to an alternate channel. In fact, total website revenue dropped dramatically, despite the fact that the client owned the number one organic listing, as well as a Knowledge Graph image on the right-hand rail.

In the six months prior to the change in brand ad position, overall website sales for the client had exhibited 53% year-over-year growth. After the layout change, website sales growth has slowed to a more muted 31%. This change is statistically significant even at an alpha of 0.5%.

This client’s experience supports the conclusions of several research studies over the last decade -- namely, that organic and paid presences can reinforce each other, causing click-through rates to be highest when both are visible.

Studies have also shown that the co-visibility of organic and paid on branded search queries causes a 7% increase in purchase intent, and a 13% lift in brand recall. (Brand Lift of Search, Enquiro & Google, April 2008)

RKG's own research suggests that the degree to which brand paid search is incremental varies on a case by case basis, but for some sites, cannibalism is quite low.  Meaning, we should not expect the organic listing to capture all brand traffic in the absence, or in this case, with the lower prominence of the paid search listing.

So what do you do when the only competition you have on your brand terms is from Google itself?  Unfortunately, it seems that advertisers are left with only two unpalatable choices:

  1. Increase bids to surpass Google’s top of the page bid threshold, putting brand CPCs completely at the mercy of Google, but still meeting the overall sales goals, or;
  2. Refuse to increase bids, hoping Google realizes that its misguided effort to decrease SERP clutter is actually decreasing the revenue of their advertisers, and ultimately themselves.

One last question for the more speculative readers: where is all your lost traffic going? And for the more pragmatic: how do you get it back?


10 Responses to "AdWords Brand Ads Shifting to Bottom of SERP Leading to Lower Sales"
This is just nuts! Sad as it is, the one good thing to come out of this is, some more proof that bidding on brand keywords is worth doing. It has a definite impact on companies even when you own the top/multiple SEO results. Would love to know what the decrease in spend and clicks were for the same time period. I am a little surprised that Google would minimize revenue by doing a move like this. Great insights though! Thanks for sharing.
Thanks Bryant. On individual terms that were moved to the bottom of the page, clicks and spend fell 75-85%. In aggregate, brand clicks and spend fell 35-40%. From this particular client, Google is losing about $100 in revenue a day, which is a small amount but adds up quickly over time.
Sam Mazaheri says:
I noticed this recently for our in-house brand campaign. We have a strong organic presence and no competition on our brand terms. I'd be fascinated to see how this develops...
Neil McKenna says:
What we may be seeing is the impact of intent sans incent. We all know Search's clean-up hitter (happy Met fan) has always been intent, but now without the common and expected presence of the brand paid ad we are missing the incentive to convert the intent. No runners on base for the clean-up hitter, less overall runs. The hope would be that some portion of the traffic would funnel into other channels. I would look for an increase in the first or early touch driving traffic from affiliate and couponing sources. In a behavioral context, users have become accustomed to an eccom pattern - now that a key component of the pattern has changed, what will become the new pattern?
Chris Oliver says:
Great post and confirms something we've seen not only on brand keywords but other keywords with a low cpc. The CTR's are usually great and due to a 'relative' lack of competition the ave cpc can be pretty low for a top position. Surprise surprise Google decide to show these ads at the bottom of SERPS !!! As the above research reveals this can have a dramatic effect on sales. The solution - do nothing (unlikely) or increase the max cpc to get the ads back on the top of SERPS. Yet another change by Google to increase revenue. This has nothing to do with improving the user experience. Google are going to shot themselves in the foot at some point with these underhand tactics. We've already had two long standing AdWords clients significantly reduce their PPC spend and divert this elsewhere into PR, social and even print advertising !!
It's all about making money for Google. They are able to talk out of both sides of their mouth. On one hand, they say they are improving the layout and search results of their page. Which they are, I'm not taking anything away from that. But on the other hand, they also need to keep their business model in mind.
I just hope the great google gods know what they are doing. Other search engines are more frequently giving me a better return.
Vinnie says:
I just noticed this as well. For many of our terms we are the ONLY ad that is displayed, but it's at the bottom. Was told by Google that their "eye-scan" research indicated that visitors were more likely to click on bottom ads and it was supposed to improve my CTR. Really? Scrolling is more effort. My eye rarely scans below the visible browser window, especially on a small device (i.e. tablet) where more scrolling is required to get to the bottom. It was never in my head that if I wanted to find company ads for a particular search that I should look to the bottom of the page if I don't see any at the top or right side.


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