It’s about a month from when Google made changes to the desktop SERPs that saw the right-hand rail text ads removed entirely while there was an increase in the number of text ads above the organic results from three to four. However, the impact of this change has not reflected in any significant shifts in CPCs and traffic. It is still early to see the effect of this change. However, advertisers are expected to get more aggressive to the shifts in the SERP.
First-page minimum bids are increasing
The change in results was being monitored for some time and it was confirmed that indeed first page minimum bids have increased significantly since the removal of right-hand rail text ads. The way it looks, most increases that have been recorded in 2016 were due to the desktop SERP changes and not seasonal increases.
At the moment, Google has not updated the minimum bid estimates in light of the new auction limits which could be the reason there haven’t been any real change in competition since the current updates were implemented. Advertisers could be upping bids to compensate for those that fell off from the first page of results. For Google, it is easy to make these bid adjustments to keep pushing the keywords bids to the minimum on the first page. Therefore, the steady increase in the text ads on the first-page minimum bids is all about competition.
It is important to know that some advertisers will spend more money to keep their sites on the first page all the time. If they do that, bids will likely reach a plateau point where advertisers will reach the highest point they are willing to pay for their traffic.
Top-of-page minimum bids are increasing too
The top-of-page minimum bids have recorded a sharp decline after Google made the ad changes. Many researchers believe the reason is because there are more ad slots at the top of the page. However, it appears it has recently started climbing again at the beginning of March.
Several factors are against CPC increases.
One of them is the Google’s changes to show ads on the top-of-page, and the first page will only affect some clicks. These ad ranks are only translating to minimum CPCs required to enable the advertisers stay in the first page and to get to the top-of-page. However, all other ad rank requirements are still implemented to ensure the user gets quality ads.
The second factor is that bottom ads, against many researchers’ expectations are doing much better. In fact, bottom ads according to Google.com non-brand text ad traffic by location, bottom ad click represented 10 percent of the share to ̴ 20 percent compared to top ad click 10 percent points to ̴ 80 percent.
Conclusion
The changes made by Google have not had a significant impact on the CPC yet. However, the top-of-page and first-page bid minimums is an indication of the ongoing effect of the Google’s updates. More evidence will be visible in the weeks to come.
