When Google Inc. removed text ads from the right side of its desktop search results pages last month, experts (including one on InternetRetailer.com) predicted the change would cause cost-per-click prices to soar.
But data gathered a week into the change suggests little movement for retailers and other marketers, according to digital marketing firm Kenshoo Ltd. “The sky has not fallen,” says Chris Costello, Kenshoo’s marketing research director. In fact, changes within click and spend volumes were typical of week-to-week variance.
The cost per click fell 1.5%—to 67 cents from 68 cents—the average position of the ads improved 9.1%—to 2.0 from 2.2—and the click-through rate increased 0.1 percentage point—to 2.3% from 2.2%.
The click-through rate increase was expected, Costello says, but changes in the average position movement and cost per click were not.
Google showing consumers fewer ads per page may have impacted the average position metric in aggregate because many lower-positioned impressions no longer existed to pull the average from the top.
The cost per click change might reflect that retailers and other advertisers typically use large sets of keywords, most of which aren’t competitive.
“We’re looking across large portfolios of keywords. Some will move up, some will move down, and some will stay the same,” he says. “When you take into account, for example, an algorithmic portfolio approach to bidding, the end result shouldn’t change too much, because the algorithms account for the changes across all keywords and adjusts to produce the same result based on predefined objectives.“
Even if marketers are not on that sort of system, their high-ranked keywords will likely perform better due to fewer other ads on the page, which can offset mid- or lower-positioned keywords, he says.
But it is still early days so it may be too early to draw too many conclusions, Costello says.Favorite