Google does not make money from organic search. It’s simply content they need to monetize like any publisher.
As with all publishers, their goal is to maximize revenue by:
- Increasing market share
- Improving user loyalty and product usage
- Monetizing users more effectively
In the past few years, Google has made significant improvements in the relevance of their organic search results (content) by introducing Universal Search – the integration of new types of content such as video and product listings directly into search results.
While those changes occurred, PPC ads have largely remained text only. It’s possible that as universal search has gone mainstream, clicks on paid search ads may have suffered. Something had to give.
The Text Ad Revolution
As I noted in my post 2009: The Year AdWords Attacked Organic Search, Google made a series of changes, some rather dramatic, to their once staid text ads last year.
- February 20, 2009 – Updated Display URL Policy
- March 4, 2009 – Expandable Rich Media Ads on the Content Network (beta)
- March 11, 2009 – Interest Based User Targeting on the Content Network (beta)
- May 14, 2009 – Google Loosens Their Trademark Restrictions
- July 24, 2009 – Local Extensions for Local Business Ads
- August 6, 2009 – Google Moves Paid Ads Closer to Organic Listings
- September 17, 2009 – The DoubleClick Ad Exchange is Integrated on the Content Network
- October 29, 2009 – New AdWords Comparison Ads
- November 3, 2009 – Ad Sitelinks in AdWords
- November 11th and 24, 2009 – Product Extensions Open to All
These changes largely fall under Google’s AdWords New Ad Formats Initiative. When I was at SES Chicago, I asked Devin Sandoz, Product Marketing Manager for AdWords, about the guiding principles behind the initiative. He pointed to the evolution of organic search results as the model for the initiative.
Google is playing with the visual balance between organic and paid search to balance user satisfaction and the average revenue per click/SERP. Any combination of images, videos, PlusBoxes, icons, product listings and multiple text ad links can now appear mixed in with paid search ads.
And this is only the beginning.
2010: The Year of Universal Paid Search
2010 will be the year of what I’m naming Universal Paid Search – the evolution of online advertising served to searchers on Google and across the web.
Universal Paid Search will be driven by 4 major trends:
- Increased Ad Diversity
- Moving Beyond Clickthrough Rate
- Personalized Text Ads
- Search Retargeting with Display
Increased Ad Diversity
Text ads will continue to dominate most search results. However, we’ll see a greater percentage of SERPs with new ad formats and ad extensions blended into text ads, specifically:
- Product listings ads
- Product listing extensions
- Comparative Ads
- Ad sitelinks
The conditions that trigger comparative ad and ad sitelinks are somewhat limited. It’s more likely, then, that product listing ads and extensions will be the first step in increased ad diversity.
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New ad formats are more disruptive than ad extensions, so I expect that Google be more liberal with their beta tests for ad extensions. These often come in the form of their PlusBox. For example, rich media ads were introduced to the Content Network through the PlusBox earlier this year. As this analysis shows, the presence of PlusBox does increase clickthrough rates.
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I wouldn’t be surprised if we see video ads wade into the waters through the PlusBox. They’ve already tested these out in the entertainment area. PlusBox could also help recoup some of the massive drop in search spending within the pharmaceutical industry by adding a place for fair balance.