With very little build up or fanfare, Google tossed out the old paid search layout and imported a new one last month. And all the other changes over the past six months have drastically changed what you see when you do a simple search for “basketball shoes”. Now, there’s a rich snippet, two more inorganic “above the search” ads, almost twice as many image ads, and no more sidebar ads.

Among all these changes, is Google’s decision to move the sidebar ads to above the search results.

Here’s the details:

1. Up to 4 text ads will be placed above organic search queries especially for the more commercial keywords.
2. Three more text ads will be below the organic search results at each page.
3. No more than 7 ads will show on each page of results.
4. Knowledge panels, rich snippets, and product listing ad blocks haven’t been changed.
5. This changed has been set worldwide.
6. Sidebar text ads aren’t coming back at least for now.

The results of these changes are as follows.

Winners

• Those who stick to AdWords with a strong bid structure. With fewer ad placements available, costs could potentially go up for those who refuse to back down on some keywords, thus inciting a bidding war.
• Those who are able to consistently capture 4^th position ads. They are seeing 4-10x higher CTR than those in higher positions.
• Ecommerce brands will likely be putting out more shopping ads due to the new lack of ad space on the page.

Losers

• Small agency ad partners. With less ad placement options, seeing success with AdWords will now be more difficult for those with many different companies in the same location as less eyes will be put on their ads.
• Less experienced advertisers in highly competitive verticals. Fewer spots mean those who just put in minimal money and minimal effort to get high quality scores will be pushed down across the board.
• Low profit margin industries. Less ads and higher bid costs mean those who stick to the old system of advertising for low margin companies will eventually have to pull out of AdWords or find another system of generating traffic.

Unaffected

• Advertisers using just brand based ads
• Niche/low competition advertisements
• All display ads or video ads
• Mobile advertisers are unaffected if not more profitable now.

Key Insights

Overall, the AdWords community has spoken. Written about in a Lunametrics blog, we see that.

“A positive side effect is increased overall audience reach. With more ads at the top of the page, you should expect to have a high level of interaction with your targeted audience. The only potential negative effect is the one you have already mentioned – expected cost increases.”

More competition = more cost per click. However, those that invest a lot of time figuring out the new system and getting it perfect could see better conversion results.

See how our paid search work has impacted our clients in the past.