Google Adds a Third Ad to Its Top Tier

A major change has just occurred in the Google search engine results page. It’s the end of the world as we know it.

Before we get there, though, a quick review of the results layout of a Google page:

· The organic results appear in the bottom-left portion of the page (which takes up the most space).

· The “sponsored links” appear in a strip of ads that runs along the right side of the page.

· Another “sponsored links” section appears, in a vertical light blue box, on the very top of the results, just above the organic results.

That light-blue box is considered the prime real estate of search. It’s the search “winners’ circle.”

The change is this: Until now, the winners’ circle has featured two ads, at most. Suddenly, on many terms, it has been featuring three. We’ll get to the details in a moment. The bottom line, though, is that the way search engine marketing competition for the top slots works is about to change dramatically.

How people look at Google. To understand the changes, you need to understand why the top sponsored links are so important to begin with. And to understand that, you need to understand the way people look at a Google page.

Earlier this year, our firm in conjunction with Enquiro and Eyetools did a study of the way the human eye scans across the Google page (we mentioned the study two weeks ago in our piece about the real estate bubble). The findings: The human eye puts most of its attention on the winners’ circle box, followed by the very top organic results and the top paid results on the side. Everything else, for all intents and purposes, is a blur.

Now, at least for certain terms, the Google page has changed. But people’s eyes haven’t. And now, three paid listings in the winners’ circle effectively means that the top organic result has fallen away and been replaced by an extra paid listing.

Consumer/non-consumer. Before drawing major conclusions, we would like to point out a pattern: The extra top-tier listing tends to appear for highly commercial searches. Searches with less commercial interest don’t get the extra listing, or at least not as frequently.

A great example (at the time of this writing) is a search for cheap airfare. The search term “cheap airfare” gets three sponsored listings at the top; the search term “cheap airfare orlando” gets only two. What’s the difference between the terms? “Cheap airfare” is a search that’s relevant to every person on Earth who wants to fly anywhere. So everyone in any kind of air travel business will want to have their ads appear there. It’s powerfully commercial. On the other hand, “cheap airfare orlando” is only for the people who want to fly into or out of a particular city.

Google is putting three top-tier ads on “cheap airfare,” and not “cheap airfare orlando,” because the first draws much, much more commercial interest (from advertisers) than the second. And more interest means more bidding wars, and more money for Google. In other words, Google is adding an extra top paid listing on its most lucrative terms.

Where it’s all going. Of course, it’s not entirely clear what’s up Google’s sleeve. One possibility is that the more commercial/less commercial distinction or a distinction like it (say, expanding even into less commercially powerful terms) will stick. Another possibility is that Google has just begun testing the waters. Soon we’ll be looking at three ads in the top section on nearly every Google results page — which would mean that Google is changing across the board.

Shifts from SEO to SEM. Wherever Google plans to go with this change, it’s going to affect the relevance of SEM and search engine optimization in a big way. On pages with three top listings, people’s eyes won’t run to the top organic listing as much anymore. That spot has basically been usurped by the lowest of the top three paid listings. So SEO becomes a lot less relevant.

Not that SEO will become obsolete. SEO and SEM serve very different needs, and one could never replace the other totally. But SEO won’t be relevant in the same way — or perhaps not even as much — as it has been, or at least not for the highly commercial terms.

When more and more businesses catch on to the extra ad in the top tier, look for a migration of energy and resources out of SEO and into SEM.

Predictions. As we’ve said above, the extra sponsored results at the top could have any number of very different effects. Whatever happens, though, it seems like the two big factors at play are:

1. An extra slot has opened up in the Google winners’ circle.

2. Because that extra slot knocked off the top organic listing, there’s going to be some level of migration from SEO activity to SEM.

On the one hand, that could mean that getting to the winners’ circle will be easier than it ever has been. On the surface, that’s the most intuitive answer: More openings in the top tier mean more advertisers can land in the top tier.

That attitude could be right. But it has two huge hurdles to overcome. First, the rush to SEM from SEO will create a lot more competition for good rankings at all levels, which will jack up keyword prices. Second, the fact that it will seem easier to get into the top tier will drive advertisers to try ever harder to get into it.

Some advertisers will be driven by pure narcissism rather than by good business practice, and they’ll be determined to get into the top slot no matter what. Others will think, perhaps correctly, that a larger winners’ circle means that advertisers outside of that circle will be left unnoticed.

Whatever the specific chain of events, we’re betting that more slots at the top of Google will lead to far more, and more brutal, competition.

How to cope. And how do you deal with such brutal competition? You’re left with the options of brute force or strategy. The strategy option means devising ways of doing more with the less-fought-over keywords while learning how to manage better in the highly competitive keyword environments you’ll suddenly be stuck in. In other words, you’ll learn to embrace change.

The brute force option means paying more and more money to stay on top, or perhaps paying more and more money just to stay afloat. Not a pretty option, but it’s the only one to fall back on if you don’t have a good SEM strategy.

Whatever option you choose, you’ll have to pick it very soon. Your competition will be responding to the new changes any moment now.

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