Have Google’s Yellow Ad Labels Had an Impact on Your Campaign?

Three months after rolling out its Yellow Ad labels in mobile-based search to coincide with the launch of “Enhanced Campaigns”, Google has expanded the inclusion of the yellow identifier on all ads at the top of desktop-based search results pages. A test of the label was rolled out in the UK, Germany, France, US and Canada but was not being used on all searches.

The traditional highlighted ad box familiar to Google users has been replaced by the Yellow Ad Label in response to a letter sent to search engines operating in the U.S. (June 26th) from the US Federal Trade Commission warning them to “Clearly and prominently” distinguish advertising from organic search results.

The initial trial rollout occurred quietly, without much fanfare, and some recent feedback from the search community has centered on a drop in clickthrough rates attributed to the new Yellow Ad labels. While clickthrough rates do not appear to have been impacted on mobile-based browsing, search blogs have lit up with feedback on desktop-based browsing that show some advertisers experiencing a drop in CTR ranging from 30-50%.

Google confirmed with Media Experts last week that two new changes were to have been rolled out on Wednesday December 4th:

The first saw the new yellow ad labeling running on 50% of traffic, and it will be progressively rolled out globally to 100% of searches featuring the same look and feel across both mobile & desktop. The second will see Product Listing Ads (PLAs) move from their traditional position on the right hand side of the page to occupy the space above the top paid search ads on the left, “when relevant to the query”. Our constant monitoring reveals that if they have been implemented, they are certainly not being applied to all searches.

What impact will all this have on the performance of your SEM Campaign?

We asked our SEM Team to weigh in the possible impact these recent changes to the user experience might have on our customers’ SEM campaigns

“One certainty is that the left side of the search results is premium real estate” confirms Chris Sylvestre, Manager Search Marketing. “That’s where people look first. The less relevant results end up on the right. Even for regular search ads there is a huge difference between being in the third position and being in the fourth position.”

“If PLAs are going to start displaying on the left, we expect a pretty big increase in CTR. The only question is, how often will they show on the left and will they ever show above paid search results?” ponders Chris. “Also, when PLAs are showing on the left side of the page, the percentage of the screen area reserved for organic search results will decrease. That should mitigate the concern that people are expecting lower CTRs with these new Yellow ad labels.

“It’s no coincidence to us that ad labels and PLAs on the left are coming at the same time. Expecting a lower CTR? It’s simple! Increase the ads to organic ratio!”

Vanessa Beaulac, Search Marketing Analyst in our Montreal office feels that these new developments signal a continued focus by both Google and advertisers on images in Search Engine Results Pages (SERPs), given their superior performance and consumers’ natural attraction to resonant visual elements.

“And the re-positioning of the Product Listing Ads (PLAs) is even more important” explains Vanessa. “Advertisers can expect to pay more for PLAs both on a Cost per Click and global budget level. As such, we anticipate that Advertises will have to increase budgets in order to capitalize on the increased click volume that will result from the re-positioning of the PLAs to the left side of the page.

“Even though ads are now being clearly identified with the Yellow Label, PLAs will keep a ‘sponsored’ tag – making them appear more organic to users.

“While Google’s ad labeling seems a prudent response to the FTC warning, with PLAs becoming increasingly essential to paid listings, they have found a clever workaround to profit from this while appeasing their regulators.”

Media Experts will continue to monitor the roll out and its effect on both clickthrough and conversion rates. Time, and the data, will tell.

In the meantime, what are your thoughts? Leave us a comment below.