Our April webinar highlighted our insights on the elimination of the right-hand side text ads on the Search Engine Results Page (SERP). Google made this change in order to have a unified design for the SERP across all devices. With the elimination of text ads, Google has paved more real estate for Product Listing Ads (PLAs).
The most important findings shared during the webinar included:
Cost Per Click (CPC) inflated for PLAs, but not for text ads.
The number of auction participants decreased. Advertisers were unable to enter the auction since there were less ad slots available for bidding.
The share of traffic from Pay Per Click (PPC) increased, while traffic from organic listings decreased.
During our webinar, we received some very pertinent questions and we’d like to take the opportunity to share the top three questions.
Q: You seem to suggest that there’s an inflation in the overall Cost Per Click in paid search. How can we really tackle this ?
A: There’s no direct answer to this. One thing we have to ensure is that your Return On Investment (ROI) is still maintained irrespective of the CPC inflation. The best way to do that is concentrate on your top selling products and make sure that they get the focus they need. Here at NetElixir, our one rule of thumb for account managers is to go with the products of the advertiser who contributes close to 80% of the revenue. These could be somewhere close to 20% of their product line. (Pareto Principle)
Q: Since there’s CPC inflation, as well as reduced real estate, small scale advertisers can’t really benefit from this. Do you have any specific tips for them?
A: Advertisers of all sizes should start looking at the overall value of search, instead of thinking in silos of paid search, PLAs, and organic listings. At NetElixir, we strongly feel that the value of the SERP is going to increase with more PLAs, unified design across devices, and related features. This enhanced value of the SERP will be there for advertisers of all scales.
Q: Is the CPC inflation quite seasonal and expected? Was that really an outcome of the change in the SERP layout ?
A: From comparing the CPC trends of the past few years, we concluded that the CPC inflation was a bit unusual and had to be a direct result of the change in the SERP layout. However, we should acknowledge that this is an ongoing study, so drawing conclusions can be somewhat difficult without the data from the second half of this year.