Scott Services: How will Google’s new ‘Ad’ label impact marketers?

Tuesday, 28 February 2017

How will Google’s new ‘Ad’ label impact marketers?

Google started testing a new ‘Ad’ label in January this year, and late last week it was confirmed that this will now be rolled out globally.

This white label with green text and a green outline will replace the green label that was launched in June 2016.

The instant reaction to this is that the new labels fit in quite seamlessly with the rest of the paid placement, perhaps creating less of a contrast between them and their organic counterparts.

So why has Google made the change now, what impact will it have have, and will users even notice the change?

The official line on this update is that Google wants to streamline the number of colors on its results pages, particularly on mobile devices. A Google spokesperson revealed:

“After experimenting with a new search ad label with a green outline, we’ve decided to roll it out. The new ad label is more legible and continues to make our results page easier to read for our users with clear indication of our ad labeling.”

Additionally, they claimed that “the color change had no bearing on consumers’ ability to distinguish ads from organic listings on the page.”

So why make the change at all?

First of all, these changes never occur in a vacuum. This is just an indication of a wider trend and should be viewed in the context of the removal of right-hand side ads, expanded text ads, and the consistent drive towards a ‘mobile-first’ approach.

Add in the growth of ad blockers, intensifying competition in the search industry (with both Facebook and Pinterest upping their efforts), and the constant pressure on Google to grow its revenues, and the reasons for moving to a less noticeable ‘Ad’ label become apparent.

We should also beware the source of this information. Google may say it has had no impact in testing, but that seems a convenient line for a company that is close to obsessive in its desire to attract more paid clicks through attention to the minutiae.

Google is famed – sometimes ridiculed – for this constant tinkering, but it does work.

Their highly-publicized ‘50 shades of blue’ experiment was seen by some as a step too far, but Marissa Meyer made sure to state that it drove an extra $200m in ad revenue. Even at a company of Google’s size, those figures talk.

It is also worth remembering where we have come from with these ‘Ad’ labels. People can have short memories – a fact that such frequent adjustments take advantage of – and this latest change makes sense when viewed at a higher level.

Google’s ‘Ad’ labels have gone from garishly overbearing to their latest camouflage iteration in the course of just two years:

The change from yellow to green in mid-2016 was reported to have a positive impact for paid search CTR, and few will doubt that last week’s move was led by exactly the same motive.

But is this just a myopic attempt to gain clicks (and the accompanying revenue) in the short term? Or is there more at play here?

For many in the organic search industry, this will just be another step in the inexorable march towards paid search domination of results pages.

One assumption at the heart of Google’s latest update is that users simply want to get to the result that answers their query, whether a brand has paid for their click or not. Giving more space to paid placements and a never-ending stream of new products to make these ads more attractive undoubtedly gives prominence to sponsored listings.

But, the counter-argument goes, people prefer organic listings. They know an ad when they see it and will go out of their way to avoid it.

Perhaps.

However, one of the reasons this has held sway in the past is that paid search landing pages have at times been of lower quality or of lesser relevance to the query than organic listings. Brands are willing to pay their way to the top, while that right has to be earned in SEO. The quality of the search results in each camp reflected this.

Which brings us to the growing impact of content marketing and user experience signals in SEO. These factors are essential for any successful SEO strategy and they touch all aspects of a brand’s digital footprint – including paid search.

All that effort site owners have put into creating ‘great content’ to improve their SEO rankings plays directly into the hands of AdWords. If Google can convince brands that the best way to get this new content in front of people is to pay for that right, they will do so. The same great content ends up in front of consumers, so everyone wins. Brands still get the traffic (at a higher price), users get the result they want, and Google makes more money.

Someone has to lose, though, and SEO traffic seems most likely to assume this position.

A diminished SEO landscape would be to the detriment of user experience, though, and no monopoly (even one as seemingly immovable as Google) has a divine right to market ownership. Higher CTR for paid listings will have to go hand-in-hand with a better user experience if this pitfall is to be avoided. If the quality of results starts to dip, alternative search engines do exist.

Another argument is that perhaps the role of paid search is starting to change. The AdWords business model is beautifully crafted for a direct response strategy, but it has its limits when it comes to brand marketing. As brand budgets start to move into the digital space, it would make sense to have a less obvious ‘Ad’ label if Google wants to encourage advertisers to spend this budget on AdWords.

As always, there is much room for speculation, even if the central thrust behind this move seems to be an intended increase in paid search revenues.

One thing is for sure, though: we will be keeping a very close eye on CTR for both paid and organic listings over the upcoming days and weeks to see how this plays out.

Clark Boyd is VP Strategy at Croud, a global digital performance agency.