Are Branded PPC Ads Becoming More Expensive? Let’s Take a Closer Look.

Are Branded PPC Ads Becoming More Expensive? Let’s Take a Closer Look.

There’s been quite a bit of chatter since Google rolled out their new SERP layout that removed all of the text ads from the right side. As Google informed us, the right side will now be reserved for Product Listing Ads (PLAs), Knowledge Graph entries, or Google My Business locations.

Paid ads will now only show up at the top (as many as four) and the bottom (no more than three) of the search results page. If you’re doing the math, that’s seven total paid search listings – four fewer than previously displayed (yes, there used to be a maximum of eleven text ads including the top, bottom and right-side).

There was a recent article that talked about how branded PPC ads were getting more expensive, and we wondered if the same was happening with our client accounts. The article claimed cost-per-clicks (CPCs) were getting more expensive for branded campaigns. However, this generalized claim made very little mention about its data influencers, such as industry type, seasonality and competitive landscape before/after. It also didn’t mention other account, campaign, keyword or ad copy changes, making it hard to fully gauge the results.

Our search department at Fluency decided to take a deeper look and test our own clients’ branded CPCs.

In the article, the author compared date ranges for February 7–16 vs. March 27–April 5. In our experience, the first and last couple of days in a month cause searchers to behave differently than during the middle of a month, so we decided to adjust the timeframe. We chose the dates February 7–16 vs. April 3 – 12.

Here are our CPC results across different industries:

  • Major healthcare providers
    • Narrow brand (brand name only) CPCs were down 34%
    • Modified brand (i.e. healthcare +brand +name) CPCs were down by 5%
    • Steady climbs from click-through rates (CTRs) on some campaigns up as much as 25%
  • Consumer food goods
    • Exact match brand terms down 29%; broad match up 10%
  • Real estate and housing: Down 26%
  • Education: Down by more than 50%

Final thoughts

The vast majority of our client’s brand CPCs are actually down significantly. From the campaign level, only a couple are steady, but the overwhelming majority are showing reductions anywhere from 5% to over 50%.

With any campaign, results may be subject to fluctuation. However, since we’ve commonly sought the top position for our clients’ brand terms, we suspect that since costs are down, and CTR is up, this could be due to more competition being pushed down to the bottom of the page, or off of it entirely.

We highly doubt that competitor ads can be given higher quality scores for branded terms that aren’t theirs, so we could certainly assume that with fewer paid search listing positions available, it could be even harder for competitors to gain traction.

We’ll definitely continue to keep an eye on increased CPCs or any other changes that might arise from the removal of the right side ads from Google searches. Have you or your clients seen any changes with CPCs on branded campaigns? We would love to hear from you. Comment below!

 

Google’s New PPC Layout: What You Need to Know

Google’s New PPC Layout: What You Need to Know

Last month, Google confirmed they would no longer show ads to the right of its desktop search engine results page (SERP). This means that up to four ads will appear up top, above organic search results, the next three will show up at the bottom, and subsequent ads will appear on the next pages, often only at the bottom.

ppc-old-new-comparison

So clean.

Why did Google remove ads from the right sidebar?

Ads in the right sidebar are statistically low performers and get clicked at a much lower rate compared to ads in the top 3 positions. Moving ads away from the right sidebar will also give Product Listing Ad (PLA) boxes and Knowledge Panel results more prominence.

caramel corn knowledge graph

Who doesn’t love caramel corn??

How does this affect advertisers?

Fewer paid search listings means fewer competitors appearing on the same page. This could mean a potential increase in clicks to ads, especially in the top four positions. Previously, right sidebar ads couldn’t display extensions, but now all ads can, which gives bottom ads the opportunity to also increase their ad real estate.

Some have suggested that decreasing the number of ads shown on a page plus the lower visibility of ad position 5-7 will increase the cost-per-click due to higher competition for a more limited ad space. However, it is still too soon to tell, and the impact will continue to be debated until more data is available.

What are my next steps?

In these next few months, PPC bids will need some extra attention to account for potential click loss and higher competition. To save on cost, take a look at recent search terms that triggered your ad and update your keyword match types and negative keywords to ensure that only the ones that are relevant and generate conversions are bid upon. Pay extra attention to the cost-per-click and average ad rank columns, and use the Ad Preview Tool more frequently to see how your ad compare to others. Since this is a recent change, each campaign will be affected differently, so the best course of action is to monitor them closely and make necessary adjustments.