Google has changed their ad results, dropping side ads (i.e. those search engine ads from the right hand column). At the same time they've added a potentially fourth top ad, above the organic results. I say potentially as the fourth ad will be reserved for what Google is calling 'highly commercial queries' - this would be for searches like "events in Birmingham" or "theatre tickets in London" and the like.
The result is that, in total, a maximum of seven ads will be shown on desktop searches – up to four above the organic search engine results and three ads at the bottom. (And to be clear, the layout and format of mobile ads are unaffected). The full impact is still to play out but ...
What impact is this change likely to have?
I think it's going to be ok for most and good for some (not least for Google obviously) but as with so many things that'll depend on how well you're running your ad campaigns and how well optimised your content is (i.e. how good your SEO is).
High volume and general search terms will be most affected by Google's recent change and if you're running ad campaigns and running them well, you ought to see an improvement in click-through-rates (CTRs). Ads at the top of paid search results have historically received a significantly higher CTR than ads on the right.
At the same time fewer impressions will be wasted on side ads. Adding another ad to the more successful top line will see fewer wasted impressions and generate more traffic, CTRs up. What happens to cost-per-click (CPCs) is less clear. With fewer ad slots available, impression levels will likely fall and it would seem reasonable to expect popular keywords to become more competitive as ad managers invest in making sure their brand appears in top line results.It would equally seem reasonable to assume from that that costs and CPCs will increase for those more sought after spots. If your keywords aren't too competitive then it might mean no change but if they are then you might see increasing costs.
Worth watching carefully.
More competition for fewer spots makes it all the more important that you have a high quality score (QS) for your ads so make sure that your ad and your page content are closely aligned.
You should also consider bidding on long tail keywords - these are longer search terms that tend to be used by users who are looking for something very specific. These users are usually much more likely to buy/commit to something so you're more likely to get a higher conversion rate from them. And they tend to be slightly less expensive to bid for.
For organic search results, it's a different picture. A fourth top line ad search result means organic search results being pushed down, so it will also create greater competition for organic results. If you've got good SEO and good organic search results and you're appearing high up for your key terms, you ought to be fine. If not then you'll need better SEO as there will be fewer organic results above the fold. So, I think this change is a good thing if you're running a Google AdWords (or Ad Grants) account and especially if it's well managed.
Keeping an eye on CPCs notwithstanding, you ought to get better visibility and better CTR - both good things. For organic search engine results, you'll need to make sure your SEO is as good as it can be but you ought to be doing this as a matter of course (especially if you're NOT using AdWords or investing in other channels).