Last week, Google began testing banner ads in search results in the United States. This followed changes to the Google ad rank algorithm, which now favours advertisers using visual enhancements to their search ads, such as location extensions or social annotations. These changes are pushing advertisers to more quickly embrace Google’s growing ad product suite. If not, advertisers run the risk of higher costs-per-clicks or even losing traffic to competitors who embrace these changes faster.
These extensions include location products which can drive footfall and highlight local offices, which is still important in much of Australia and beta video units which are sure to be in high demand considering the widely held view that there are not enough avenues for distributing video content.
The large banner ads are now appearing across the top of branded search results on Google for 30 advertisers in the US including Virgin America and Nike. This is a limited beta test, but as with similar beta programs it is likely to be opened up to a wider pool of advertisers before becoming a permanent feature. Google has not yet confirmed the price or cost model, but this is likely to be paid on a CPC or CPM basis.
This is not a new development in search itself, as Chinese search engine Baidu has been running a similar format for a while. If Google follows the same model this ad format will probably be limited to branded searches; however there is a strong possibility that in the future Google will make the banners more interactive given the recent changes to the ad rank model.
According to research from GroupM UK and Nielsen published last year, search engine users overwhelmingly click on organic results. But search extensions are known to improve click-through-rates, therefore evening up that difference and, of course, also ultimately attracting more clicks to ads.
This announcement is a big departure from Google's original philosophy of keeping the search results pages uncluttered and free of banners. Marissa Mayer famously stated in 2005 that "There will be no banner ads on the Google homepage or web search results. Ever." As such, many industry experts are questioning Google’s motives as this appears to have a major focus on driving increased ad revenue. However, Google has built its success on not cluttering the search results page, so it’s safe to assume that this product will continue evolving towards positive user engagement.
At the same time as Google’s move, Microsoft has launched a pilot product called ‘Hero Ads’ on Windows 8.1. For brands, ‘Hero Ads’ present a unique opportunity to dominate the search results across branded search queries, and to provide a much richer experience for the brand to engage with its existing and potential customers. The problem of course is that those potential customers will always be limited until Bing does something to push up its audience.
Large banner ads are another step towards integrating visual elements into the search results and giving brands more control of their branded experience. With the changes to Google’s ad rank algorithm being rolled out at the same time, it is clear that Google is pushing advertisers to improve their ads in search by forcing them to adopt visual ad formats/extensions so that search results deliver the most relevant results for the end user and more ad revenue for Google. In a market as competitive as Australia, advertisers should be looking to snap up every opportunity they have to stand out.
Dan Ambler
Biddable media director
Mindshare Melbourne