Those agents and brokerages who generate leads off of pay-per-click might have noticed some significant changes last Friday with Google AdWords. Those ad slots that once appeared on the righthand side of all Google search results are now gone, and in their place, a new ad slot has been opened above the organic results — bringing the total number of ads that appear there to four.

  • Google AdWords has reduced the number of ads that show on search results.
  • It's a good idea to diversify your ad dollar with both PPC and free advertising.
  • In the future, organic positioning will matter more than before.

Those agents and brokerages who generate leads off of pay-per-click might have noticed some significant changes last Friday with Google AdWords. Those ad slots that once appeared on the right-hand side of all Google search results are now gone, and in their place, a new ad slot has been opened above the organic results — bringing the total number of ads that appear there to four.

Here is one example of a current result set with the fourth new ad spot.
Zionsville Real Estate Agents New

And here is what it looked like before last Friday:
Zionsville Real Estate Agents Screenshot -Old

It’s a pretty dramatic difference with the side ads gone! Although it’s still early, and it’s going to take awhile for the dust to settle, this is potentially a huge change for those who have been using those now-missing righthand slots for more affordable exposure or to test out new campaigns.

Why did Google do this? What does it mean? I’ll try to cover what we know now, what I think will happen and how to deal with it.

Why did Google make this change?

Google didn’t roll this change out with a lot of fanfare. In fact, it didn’t even formally announce that it was going to happen.

One theory is its motivation was to bring things in line with the mobile platform. Side ads haven’t been used in mobile results for quite a while.

Consumers’ searches will now look mostly identical whether they’re using a desktop, tablet or phone. Google has recently been pursuing a mobile-first strategy, and this change could have something to do with that.

Right-rail ads have also been a quality concern for Google. Compared to the ads that appeared at the top of the results, right-rail results had a notoriously poor clickthrough rate (CTR). Google might hope that limiting the number of ad slots to the best options will remove the less relevant ads that appear in the cheaper slots now.

The result we’re left with is better-placed ads but fewer of them to fight over. Although I’m sure there were a lot of pieces that went into the decision process, in my opinion, this ultimately comes down to maximizing revenue on the page. It’s likely a good move for Google as a company — now we have to adjust.

What I think will happen, and how I’m preparing

1. Expect to pay more and get more, but you’ll need better ads

As a result of these changes, I expect pay-per-click (PPC) to get more expensive. This is simply supply and demand at work (hat tip to James Stewart).

With fewer (though better) advertising slots, when you look at head terms (city homes for sale, city real estate agent(s), etc.), this might ultimately make it too difficult for small buyers to play.

In the real estate space, we don’t often see a ton of awareness ads or branding-only initiatives in the head-term space, but what little was there is likely over.

Big agent and team buyers and larger brokerages, however, will want to take advantage of the less-crowded field to make their ads stand out even more. Mobile search, just like the electoral college, is already a winner-take-all arena where lower positions are nearly invisible.

New features included in these top slots such as site links, snippets and extensions take up ever more space and push lower results further down the page. We can expect to see the same issues begin to define the desktop results now.

2. Diversifying your ad dollar will become much more important

If you haven’t already diversified, big changes like this one should remind you why it’s so important. You never know when one source is suddenly going to change course on you, and you don’t want to be the agent with the proverbial eggs in one basket.

I think as a company we’ve done a pretty good job in the diversification area, but we’ll be continuing to spread our investment dollars into new channels — both paid and unpaid.

3. Organic position will matter more, not less

Your organic listings need to stand out more than ever before, and that’s now even more important if you rank for a major keyword. For both organic reasons and to prove ourselves against further paid changes, we are always doing everything we can to improve the optimization of our site.

Even though we rank well for our market across the gamut of terms, we are constantly looking at our site and what might be outdated or underperforming. These are things such as meta-tags, schema organization, internal linking, narrowing focus of pages, etc.

It’s quite possible that much of the current organic-search strategy will change as a result of this update, particularly if every ad slot will now enjoy the ability to use site links.

That new fourth slot means more search page real estate is taken up before organic results even appear. If you are being aggressively bid against by enough competitors to fill positions one through four, that might mean that consumers will have to scroll even farther to reach your organic result.

These ad results already take up the top fold for most mobile phones, and that psychology will now play a part in desktop searches, too.

4. Learn about RSLA and customer match

As fighting for the top spots gets more and more expensive, it’s going to matter a lot more that you can do it efficiently. Remarketing Search for List Ads (RLSA) and Customer Match are two Google AdWords tools that can make your marketing more effective. So if you haven’t started using them, you should move toward testing and adopting them now.

RLSA is a feature that allows you to focus your ads and direct them to people who have already visited your website. These adjusted ads appear only to those who are being remarketed, and you can use your better understanding of these customers to target them more cost effectively.

To even further refine your ads, consider training your team on the Customer Match feature. Customer Match is even more exact than RSLA because it allows you to build ads tailored toward your email list.

By focusing in on key customers, depending on the terms and how you are structuring your funnel, you might be willing to bid much more aggressively for customers already familiar with you and your brand.

Although this might seem like doom and gloom, it’s not necessarily all bad. First, though I think cost-per-click will increase for at least spots two through four, and CTR is going to get a bump for everybody. With approximately seven fewer links for consumers to click, every entry should see some bump, and that’s a good thing.

If you’ve ever had somebody teach you how to shoot, you’ve likely heard the expression, “Aim small, miss small.” I think this maxim is applicable here.

More than ever, your strategy with PPC should have a solid foundation — focused small, concentrating on hyper-local terms around your key markets. If you haven’t already been doing that to maximize your ROI, it’s becoming more and more essential.

Long-tail search phrases are going to have lower search volume, but you’re going to find much less competition, and the result is lower cost and greater ROI.

Brian Mayo is the Digital Director of  F.C. Tucker Company. Follow Brian on Twitter or Facebook.

Email Brian Mayo.

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