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Google Adwords Shake-Up Part 3: Show Me the Data!

It’s been just over a month since Google rolled out their universal changes to the desktop search engine results page (SERP).

Not only did this announcement get a lot of coverage, but it was also the center of a lot of speculation and viewed as a possible market-changer.

So, was it?

We wanted to share some initial findings.

Before we do, here’s a quick note about our data: We’re obviously not the only SEM provider in town and many agencies and software platforms have begun publishing similar findings. However, at the time of publication, we are the first SEM provider in automotive to share performance data and impact.

What makes our data even more interesting is that in some cases, the findings differ from what other data sources similar to us (data aggregators from multiple industries and verticals) are reporting. Automotive SEM is not the same as e-commerce or other types of lead generation. It is different and it deserves to be understood differently.

If you’re interested in a deeper dive, watch our recent DrivingSales-hosted webinar on this topic.

Data-wise, we’ll look at the three key Google AdWords metrics that you would expect to have been impacted immediately by the change:

  1.      Impressions
  2.      Clicks
  3.      Cost

The data shown here is a direct comparison of client data two weeks before Google’s rollout vs. the first two weeks after the rollout. The sample size is extensive, with over 10 million impressions and over 200,000 clicks in each sample period.

Also, the data shared here is adjusted for spend. Think of this in the same way that economists compare 1920s financials to 2010s financials by ‘adjusting for inflation’. This is necessary to create a true apples-to-apples comparison.

Impressions

As predicted, the decrease from 10 to 7 ad slots on the SERP had a significant impact on total available impressions. Overall impressions dropped by 19%. Considering that this change reduced available ad inventory by 30%, seeing only a 19% decrease in impressions is pretty favorable for advertisers.

Google Shake Up 3 Image 2

Figure 1 (click to enlarge)

Even more noteworthy is the ad positions that were driving those changes. Notice in figure 2 how positions 1 and 2 picked up a tremendous amount of additional exposure, while the remaining positions lost traction.

Google Shake Up 3 Image 3

Figure 2 (click to enlarge)

Clicks

When measuring clicks, we look at both the total volume of clicks as well as click-through rates. In a sample size of 458,193 clicks, here’s what we found:

Google Shake 3 Image 4

Figure 3 (click to enlarge)

Interesting takeaway: While click volume fell by 4%, this actually represents a big win when compared to the 19% drop in impressions highlighted earlier.

Click-through rates by ad position also changed significantly, as seen in figure 4. With the fourth ad position getting relegated to either the bottom of the SERP or the lowest position in the ads at the top of the SERP (depending on the search query), this drop-off was expected because position 4 no longer occupies a premium position at the top of right gutter.

Google Shake Up 3 Image 5

Figure 4

Cost

This is without question the metric that has everyone the most concerned. Will the reduction in supply of ad slots drive up the cost of clicks?

The early data says ‘yes’ – slightly. Cost-Per-Click has increased, but only by a small amount. In a sample size of 458,193 clicks, most of our clients saw CPCs increase by 2-5%.

Google Shake Up 3 Image 6

Figure 5

In the spirit of full disclosure, we have to acknowledge that market-level changes cannot be accurately measured over such a small period of time. The rollout to the new SERP format occurred one month ago. This means that no matter how “deep” a data sample anyone has since then, it cannot be an accurate sampling of the market because not enough time has passed to predict long-term impact.

Fortunately, the early indicators are encouraging. The change to the desktop SERP has not made that dramatic of an impact yet, but it’s something you should be monitoring closely.

The best course of action now is the same as it always has been: Vigilant awareness of your own dealership’s data and trends paired with intelligent responses to those changes. Follow these four critical steps that we outlined in our previous blog post on this topics. Being smart, vigilant, and proactive will protect your dealership’s digital marketing strategy over the long-term.

Neal Gann, CEO
Neal Gann brings over 20 years of experience in the automotive industry, and his expertise in marketing, product development, sales and operations have made him one of the best in the vertical. A strategic thinker with a sharp eye for new ideas, Neal is dedicated to growing Showroom Logic through his collaborative leadership style and relentless drive for success. And with his strong roots in creating and optimizing online marketing programs for some of the most successful dealerships in the auto industry, Neal is able to challenge the status quo and lead the way towards innovation.