Lightburn

Google has implemented a new ad layout that will change the lives of paid search advertisers. They are now inserting Google Shopping ads into the standard paid ad space. Google is shifting a great deal of their attention towards their shopping channel in order to compete with the rapidly growing Bing Cashback network. Shockingly, this update occurred without an official announcement.

In figure 1.1 you can see the standard sponsored ad layout for a competitive paid keyword. The standard layout consists of 3 ads on the top and 8 ads on the right sidebar. If you look at figure 1.2 you can see Google’s new ad layout which consists of 3 top ads, 3 Google Shopping (AKA: Base, Froogle, or Google Products) placements and 8 standard ads on the right sidebar.

Fig 1.1

Fig 1.2

Let’s breakaway for a quick side note on PPC bidding: It’s pretty basic. An advertiser bids for the location of their keywords in one of the standard 11 spots that Google makes available on the first page of search results. Generally, as long as you have a high quality keyword that is relevant to your website, the higher you bid on a keyword, the higher your ad appears on the search engine results page.

Google’s new layout has changed the rules. Google is clearly favoring advertisers that have their products listed in Google Shopping and it is penalizing standard PPC advertisers. In figure 1.2, find the ad paid for by CooperSafety.com. It seems to be in ad position #7, right? Wrong. Google AdWords reports that the advertiser is buying position #4. I feel that this is misleading. If an advertiser bids and pays for a position, they should get that position.

What does this all mean? This will cause advertisers to take two obvious actions. First, they will be more aggressive with their bids for the top 3 positions. No one wants to be stuck below 3 shopping ads on the right sidebar. Higher bids and more competition leads to more profit for Google. Second, more advertisers will enter the Google Shopping arena. This is a good tool for advertisers to use and I encourage it. However, it equates to more data and more opportunities to push companies to use Google Checkout. Once again, this means more profit for the search leader.

There are many reasons that Google may have made these changes. I assume that one of the main influences is Bing and Bing Cashback. Many shoppers are headed to Bing to do comparison shopping and it’s one of Bing’s strongest assets. Google is losing traffic and customers to Bing. By inserting more shopping ads into search results, they drive more traffic to their shopping engine. This in turn means more profit and more market dominance for Google. All hail Google.

*Note: It may seem that I am slanted against Google. I am actually somewhat of a Google fanboy.  I just like pointing out some of their craftiness. I welcome questions and comments (below).