Over the past few days there has been a lot of buzz surrounding an update to Google’s Search Engine Results Page (SERP) for desktop and tablet traffic. While the primary battleground remains mobile, which continues to grow rapidly (~65% of our dealers’ search traffic is from mobile devices), there is still a significant amount of search traffic coming from desktop. Let’s explore what this means for you.
What Has Changed?
The traditional Google Results Page consists of a mix of sponsored and organic listings. For over a decade, sponsored listings have resembled an inverted “L” with the top 3 sponsored ads showing at the top of the SERP (just above the organic listings) and the ads for positions 4-10 occupying the space in the right hand margin (commonly referred to as the Sidebar or Gutter ads).
This has changed.
For Google searches on desktop computers and tablets, the gutter/sidebar ads have been removed and the user now only sees sponsored ads immediately above and below the organic listings. The “top” sponsored ad block now contains between one and four ads while the remaining sponsored ads have been forced to the bottom of the results page. See Figure 1 below for an example of a before/after SERP.
Figure 1: Example of Google SERP (Before and After)
This format has been tested at scale in the US and internationally. and Google has confirmed that it has been completely rolled out. All indications point towards the new format being both “global and permanent”
What Does This Mean for AdWords?
Google’s results page used to display ~10 ad slots. The new SERP displays ~7. The two big questions everyone should be asking are:
- What will be the long-term impact of reducing the number of sponsored ads on the results page by 30%?
- Will positions 5-7, now relegated to the bottom of the SERP, still drive as much value as now as they did when they were in the right margin?
As any student of economics can tell you, when supply is limited and demand holds steady, the price will increase. Given the reduction in available ad slots, is that what will happen here ?
Some industry experts are already predicting an aggressive market reaction as advertisers bid up in an effort to grab more of the diminishing shelf space. Showroom Logic, on the other hand, will be taking a data-driven approach to determine how this affects dealerships on a case-by-case basis.
What Does this Mean for My Dealership?
While there is no consensus on how the market will react, one thing is clear. This announcement represents a significant change in the landscape. Like all changes, it will hurt some advertisers while creating opportunity for others.
With limited ad positions at the top of the Google SERP, your direct competitors, AutoTrader, Cars.com, CarGurus, Edmunds, KBB, Autobytel, brand conquestors, and OEMs will all be fighting for a few positions. To maintain or grow your market share, it may be more important than ever for your dealership’s ads to be in one of the top three positions for your most strategic and profitable keywords.
Having highly relevant ads will be even more critical. Ads that closely match Google searches tend to drive a higher click-through rate, which tends to drive down your CPCs.
Whether it hurts or helps will depend entirely on how you respond. Ignoring your data and continuing full speed ahead may leave you vulnerable and in a position to lose market share, while intelligently leveraging your data can push you ahead of your competition.
Meeting the Challenge Head On
Now more than ever you need to have access to your data and an understanding of what’s going on in your SEM accounts. You should be closely watching your impression share metrics, your costs, your average position, and your loss-by-rank stats.
That can be challenging to do at scale, but it is much easier if you have great technology and people on your side. Not only is Showroom Logic a Google Adwords Premier SMB Partner, but every Client Success manager at Showroom Logic holds an individual Google Certification, as well. Our people train rigorously on a weekly basis to stay current, sharp, and ready to bring even more value to your dealership. Make sure you’re taking advantage of their expertise.
You’ll also need to use advanced technology. The AdLogic engine is built on a self-adapting framework that builds highly relevant ads, manages bids and target positions at a keyword level. Every day the technology makes millions of bid decisions to ensure you maintain your position in the market. That granularity and specificity will be crucial in the months ahead. Competing in this new environment means that it’s more important than ever to have a sophisticated bidding engine to ensure your company does not lose market-share.
As we learn more from Google and see how the marketplace reacts, we will be following up with additional posts to help dealers stay ahead of the game. Please follow our blog for the latest information on this and other key automotive digital marketing topics.