As the SEM world resonated cries of the doomsday for paid marketers, when Google removed RHS ads completely, there have been countless predictions of how this change will affect the search ecospace. Some are calling it quits for smaller businesses while others are calling it the rise of Product Ads. SearchEngineWatch spoke beautifully about why Google is doing it & how will this impact the SEO framework and strategies. The icing on the cake was an optimistic number jumble by Larry Kim, saying how it will only impact only 7.3% of search queries.
Reality is, removing the RHS ads may have some deep rooted impacts which advertisers big or small need to consider while constructing their campaign & keyword strategy along with the impact on bids. In today’s discussion, we pulled in thoughts from some of our experts on how businesses across verticals will really get impacted. We’ll be digging deep into keyword trends, bidding strategies, overall search strategies and potential impact on business goals which you definitely can’t ignore. We’ve broken the “Removing RHS Ads” discussion around major focus areas & highlighted what everyone has to say.
|#1 How do you think Google removing RHS Ads will affect CPCs across various verticals? Will it also affect the funnel logic and short tail versus long tail usage of keywords?|
[Karan, Business Intel Head]: CPC will definitely see a rise around 20%-30%, more so, in the initial stages while people try to figure out more cost-effective strategies. I believe BFSI would be impacted very heavily because of three major reasons. Firstly, the BFSI vertical relies on a very small set of high traffic keywords. as opposed to a fairly spread out category/product based keyword set for e-commerce, listings, and other high traffic verticals. Secondly, No Product Listing Ads for this segment means that there is no normalizing factor that BFSI can fall back on and hence all of their traffic volume would still have to come from Search. Thirdly, a lot of players in BFSI use Search as a medium of brand building in addition to performance marketing, and given the high LTV of potential customers, they might feel that it is still a good idea to bid higher on the main keywords (which already have insanely expensive clicks upwards of INR200). Looking at all of this I believe there could be a 50 – 60% rise in CPCs.
[Vinay, Strategy India]: Big players who are operating at average positions of 4-5 for profitability (as their brand name helps them even at 4-5 for driving CTRs and conversions) will see a steep drop in impression volume and will have to resort to selective higher bidding to maintain the ROI balance. Average CPC s will see a rise.
[Ashish, CEO]: CPCs would definitely increase as an increasing number of advertisers would be competing for the same ad space. Volumes on types of keywords will see a drop as keywords on the top 3 positions will absorb all the volume while keyword volumes of average positions 4-7 would have insignificant volume.
[Anubhav, COO]: We should see a 15-20% uptick in CPCs for customers with lower volumes (here one could get limited traffic at lower costs by bidding on large volumes of keywords). What will become critical is to ensure businesses cull out non-performing keywords faster than usual.
[Vamsi, Strategy US]: I think this will force players who were aiming for the positions lower than three to bid more aggressively due to the loss of business and exposure they’d normally get. This should force the CPCs up pretty high for the players who dominate the 1-3 positions. Hence making keyword themes on top more expensive to bid on.
|#2 Do you think search strategies overall will be impacted due to the removing of RHS Ads? Like Normal search, Remarketing List for Search Ads (RLSA), Product Listing Ads (PLA) or even Dynamic Search Ads (DSA) strategies?|
[Karan, Business Intel Head]: A lot of interesting changes can be expected, here’s a few I can think of:
1) Proactive optimizations before Launch – This move will force users to Identify their set of target keywords that are genuinely important for their business from the word go. Rather than starting the account with a multitude of useless keywords (generated by algorithms or suggested by google) and then eliminating what doesn’t work for them. It would, therefore, force people for proactive optimizations.
2) More emphasis on Exact match keywords – When quality score optimization becomes a key to reducing CPC, people would focus on improving CTR and hence would want to focus on tight groups of exact match keywords.
3) More importance to the Second Page of SERP – I see a possibility that top of the page Ads on pages 2 and 3 might turn out to be more effective (in terms of CTR and Click volume) than the bottom of the page ads on pages 1 and 2. This might lead to several interesting changes, like, the RoAS (Revenue on Ad Spend) balance game that is currently played at positions 4 to 6 might move to the top 3 slots on the second page. Further BFSI players who are not able/willing to afford the top 3 slots on the first page might concentrate on page 2.
[Ashish, CEO]: Advertisers would have to now fight it out for 1-3 positions for keywords they really care about; as against competing for 1 – 6 positions. So, all the keywords that are near & dear to the advertiser; they’d need to ensure the CTRs & Quality scores are well-optimized and they protect their turf else they could see a drop in their overall volumes. I think it’d be more of bidding strategy that’d need to be changed than anything else. Also, long-tail keywords will also play a more important role now than before.
[Anubhav, COO]: PLA & DSA formats will become more critical as they will offer cheaper CPCs consistently. RLSA will become key in an ever increasing CPC environment.
[Vinay, Strategy India]: Definitely the RLSA strategy will be seen as a savior and an important touch point by the businesses to drive conversions, as the new user acquisition through Google will become 10-20% costlier.
|#3 Do you foresee any impact on Ad Rank calculations?|
[Anubhav, COO]: I don’t expect any impact on this. Obviously, CTRs will shoot up on average and will become an ever important criteria.
[Karan, Business Intel Head]: If it actually turns out that top 3 slots on the second page perform better than the bottom 3 slots on the first page, Google might have to make some changes here. Right now we can only wait and watch.
|#4 What about campaign structures? Any concerns or advantages on specific verticals?|
[Karan, Business Intel Head]: As stated earlier, more emphasis on exact keywords would mean that in addition to the usual segmentation (based on categories, devices, locations etc.) match type would become an important axis for campaign segmentation. Additionally, people might want to segment the most important keywords further by grouping them in buckets based on CPC and Conversion rate.
[Ashish, CEO]: Long-tail keywords will become important. Though, I don’t see there needs to be any change to campaign structure (as long as you adhere to best practices already). It’s more of bidding strategy change here than anything else.
[Anubhav, COO]: Fine-grained campaigns become key. Bidding only in segments which are really important and successful will be key to manage CPTs (Cost per Transaction).
[Vamsi, Strategy US]: No, I don’t think this would. Maybe create campaigns targeting specific positions but that would get very difficult to ensure. (How can you make sure that one particular campaign/ad group comes in 1st, 2nd, or 3rd position – point to ponder upon!).
|#5 How would optimization strategies be impacted? Like those of hour of day and geography location segmentation?|
[Karan, Business Intel Head]: Will become more important like any other cost optimization. More people would want external help on this front. Also may lead to bid optimization tools becoming a must have rather than just a luxury.
[Vamsi, Strategy US]: Companies may be forced to bid super aggressively during their best hours and in their best states. They may also pull away their targeting from the times/places that don’t have much value addition. This would result in a hyper-specific targeting with high bids in many cases.
|#6 Would we see more spend moving to Google & Bing Shopping ( Product Listing ) Ads? Especially for users who were focusing on generating ROI from 4-7 positions?|
[Ashish, CEO]: For eCommerce, sure (that has already been happening anyways – since the ROI is better on PLA Ads). For other verticals, not yet till Google figures other ad formats to show on the right side.
[Anubhav, COO]: Yes. I think Google will come up with more PLA like formats across other key commerce categories as well – like Travel Ads.
[Vamsi, Strategy US]: For eCommerce clients, yes, but service clients will be forced to fight more aggressively for the top spots.
|#7 Is Google Targeting to make Desktop look more like Mobile? What kind of impact can it have on the cross-device strategy? Any specific benefit to users?|
[Ashish, CEO]: Not sure what the real benefit here to the user would be. As a user, I go to Google to get more relevant information. I don’t think the “similar looking page” on Desktop versus Mobile will make me use Google more or less than what I do anyways! However, for Google, it may mean a more consolidated & leaner code-base by making it look like Mobile.
[Karan, Business Intel Head]: Aesthetically the search results page would definitely look better, less cluttered, better visibility and more space for PLA. Possibly sensing new ad formats to come about.
[Anubhav, COO]: Yes. User behavior changes will hopefully lead to overall improved CTR (when measured against clicks on Google Desktop + Mobile impressions).
|#8 Do we see a market increase in CPC values? Or would it be specific to certain verticals? Any specific benefit to users?|
[Karan, Business Intel Head]: There are some specific views I have here:
1) As discussed above, CPCs would rise for the top slots. This might also make it tricky for smaller businesses / new entrants to compete with the more established names in the domain.
2) In markets like India where the focus on performance optimizations and bidding algorithms is not as high as some of the more matured markets like the US, advertisers might lose money initially due to higher acquisition costs, unless they adapt quickly.
3) This should lead to revenue gains for Google. As the traffic that is moving away from RHS Ads would move either to the now more expensive top 3 slots or to PLA (where the CPCs are comparable to text CPCs for positions 4 and below).
4) Advertisers might benefit from being forced to experiment with and identify more cost effective channels
[Ashish, CEO]: While the CPCs will increase, I personally don’t think the overall revenues will increase or decrease. The rise in CPCs will be off-set by the drop in ad-clicks that used to come from ad positioned between 4 & 8. Though the rise in CPCs will impact advertisers who in turn can move budgets outside of Google – to other avenues like Facebook.
|#9 Will Google removing RHS ads make it more challenging to run PPC Campaigns? Definitely, more focus is required on the Keyword strategy, right?|
[Karan, Business Intel Head]: With advertisers paying more attention to where their clicks are coming from, they would tend to avoid irrelevant / inactive / low search volume keywords in the account. Hence, optimization becomes all the more important.
[Ashish, CEO]: Advertisers will need to figure more of long-tail keywords to garner volumes that would otherwise are now gone from keywords that were positioned 4 & 8. Usual keyword optimizations will still be as important as before.
In a Nutshell
There is still a lot of speculation, but how is this change going to impact overall search eco-space here are the final sign-offs:
1) Google becoming more Visual: The rise of dependency of Product Ads on Google and possibility of new ad formats like image ads for services or video ads could be the future.
2) Impact on Smaller Businesses: As smaller businesses will now fail to get the ROI on the RHS side of Google Pages, they will have to complete with top players or resort to other channels. Either way, it will lead to a potential CAC (Customer Acquisition Cost) lift.
3) Keyword Strategies need to be Optimized: Businesses need to identify their top converting keyword themes & possibly do a top of the page auto rule to make sure their search revenue streams are not impacted.
4) Lead Gen Businesses will have cut throat competition: Verticals like BFSI will have to account for increasing CPCs while conversion rates will stay the same or even reduce. Hence increasing the average CAC cost again.
5) Spend Moving to Newer Channels, the trade-off: Businesses may be forced to increase spend on other avenues like facebook or display inventory. They will have to balance the higher Cost per Lead with the low CPCs in this channel. Based on data and optimizations, this litmus test will determine how much of additional spend can businesses really move to these lower conversion rate channels. Business objectives like traffic versus actual conversions and attribution measurements will also become key.
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