Case Study on Google SERP Change: How removing 36% of the PPC ads effected AdWords performance

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On February 19th 2016 Google stop showing AdWords ads on the right hand side of the search engine results page (SERP’s).  Have you seen a change in cost per click, impressions or other performance metrics?

Here is a screen shot from Campaign Watch for the keyword “Call Analytics” on February 2nd before the change with ads on the right side.

BEFORE

Google SERP right side ads

Now lets look at the new search engine results page (SERP) layout. Without these 4-5 ads on the right side, the number of first page ads real estate dropped 36%, from 11 spots down to only 7.  As you can see below, the Google SERP now looks like this.

AFTER

Google SERP right ads removed

Remember economics 101 class and the correlation between supply versus demand?  Everyone that took this class in college knows that in any industry if demand is high (advertisers) and supply (Google SERP) goes down, then cost will most likely increase.

We conducted a study to evaluate how this change is effecting performance.  This analysis looked at both ecommerce and lead generation businesses to dig into several key metrics including impressions, Average Position, CTR, CPC, Conversion, CR and CPA.  We tried to find examples of AdWords accounts that maintained the same position before and after the change.  In this first example, the ecommerce client was in position 2.6 before and continue to be in average position 2.5 after the change.

Google SERP changes spike impressionThis advertiser saw a nice 36% increase in impressions and 19,104 more clicks for the same time period.  The only problem, the cost increased over 37% and conversion rate decreased 7.7% but the did have a 25% increase in conversions.

The second advertiser we analyzed was a lead generation site who stayed in position 2.4 – 2.5 and also saw an increase in impression of over 31% but their CTR and conversion rate dropped.

SERP changes lead generation

For smaller advertisers who typically bid below position 3, this change had a much bigger negative effect to the bottom line.  In this final example, a combo site that did both lead generation and ecommerce they saw a 10.7% decrease in clicks and over 16.6% fewer conversion.

SERP changes below position 3The biggest problem for this advertiser is that in under 60 days their CPA increased 22%.  If this trends continues, the cost to acquire a customer could double in the next 4-5 months.

In summary, this data shows a few alarming trends especially if you are a smaller company trying to survive with cheaper clicks in lower positions.  All 3 advertisers saw their CPA increase between 8% and 22% which puts even more of an emphasis on conversion rate optimization (CRO) to try and combat cost increases.  On a positive note, google is testing adding more characters to the ads, maybe they feel a little bad :) The big difference is that the text ads will feature a double (extended) headline and the full 70-character count of description copy

We will follow up and report again as more time goes by and the data size become statistically significant.  Please share your experience since Google made this change and specifically what happened to your AdWords performance.

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