Google: PPC and SEO

Whether you want your product or service to appear in the natural or organic listings, or you want to undertake paid search, Google is out to get you. It is a commercial undertaking with record profits, ploughing back into a plethora of new ventures, including hardware, software (to rival Microsoft), and mobile phones. Even MS Office is not safe now that Google has its own Excel. Not forgetting that Amazon is not safe as Google has a monopoly on all books. It won’t be long before as well as its own Mobile phone hardware, it will produce a tablet/iPad and then notebooks, laptops and office terminals to hang off its own cloud computing systems.

Take the natural/organic listings. Google is pushing these ever further down the first page. The first page is becoming larger and longer, but the first natural listings are now off the first page as we knew it , say 5 years, ago.

Take Google’s AdWords paid search flagship. It is becoming increasingly expensive and diffiucult. New rules….

So in effect natural listings are being crowded out by Google offering other features before the natural listings. Meanwhile paid search terms are inflating by several hundred percent from one year to the next.

You can almost liken Google’s AdWords to gambling. It is very easy and almost normal to lose loads of money without winning any sales.

Natural/Organic listings conclusions from the article below
There are two effects which together are squeezing out the traditional role of SEO or making organic/natural listings much more difficult to achieve.

The net effect is to a) diminish the importance of organic/natural listings and b) make the life of anyone relaying on organic/natural listings much more difficult.

Paid search/AdWords conclusions
The number of businesses now advertising on the web has been exponentially rising. Fuelled by a loss of conventional business during the current recession, everyone is advertising or trying to advertise and sell on the intent. And it is a world wide web. So there are no geographical limits frequently you are competing with a Chinese business (situated in China) to sell your own goods locally.

So these two effects combine. The number of business in your own back yard are exponentially increasing. The number of business who can now advertise in your backyard, because of lack of barriers to entry, have also placed an order of magnitude increase in competition.

This means that the same keywords - or slightly fewer as Google is displaying fewer and fewer keywords - are being auctioned among a massively much larger audience of bidders. Hence we are seeing massively increased cost-per-click prices.

Consider this recent example for a fruit grower in Florida (Xxxx Groves). The 2009 season runs from August 2008 through to May 2009. The 2010 season runs from August 2009 through to May 2010.
The CPC for the same keyword and match type has often risen between 250% to over 1500%. Of course there are some keywords with smaller rises and a few price drops. But overage the escalation averages out at between 2-3 with some volume keywords being as high as 4-5 times last year’s cost per click price.

Year Keyword Average cost-per-click Cost-per-click price escalation
2010 buy florida citrus
2009 buy florida citrus
2010 edible fruit baskets
2009 edible fruit baskets
2010 Florida fruit baskets
2009 Florida fruit baskets
2010 florida orange groves
2009 florida orange groves
2009 indian river grapefruits
2010 indian river grapefruits
2009 navel oranges
2010 navel oranges
2009 ruby red grapefruit
2010 ruby red grapefruit

So cost-per-click prices are rising – sometimes – quite rapidly. This trend was continued in 2011 and 2012. Also as new adverstisers with the name Xxxx (our client remember is Xxxx Groves) came on stream. This created tradmark problems even though these new Adwords clients were in gambling and clothing. So this meant that special offers for perishable could not be advertised in time. So as well as bid price escalation, this client ran into trademark problems with adverts taking mroe than 2 weeks to be approved by Google's Adwords team despite repeated phone calls. So it is becoming ever easier to lose lots of money on Adwords and the other search engines.

Google is a quoted company and has to look after its shareholders. To obtain increasing profits Google has to continue to squeeze Adwords customer hard. And Adwords is the major profit earning in our view subsidizing many other segments of Google's business - though Google denies it has any business segmnets.


Google search is changing…..

No one can have failed to notice. But the extent of the changes has probably been missed by many and these changes have occurred just over the last 15 months.

Whether spurred on by one of these two factors, Google is changing.

Which one is really irrelevant (a fact of life) and less important than implications of these changes. The most important question, in my view, is whether these developments have no stopped or are they part of a continuing trend?

If a continuing trend will paid search via AdWords and these newer additions to a search engine page result (SERP) effectively ‘crowd out’ the natural or organic listings making much or SEO irrelevant or more difficult to accomplish for clients effectively

In 2011 and 2012 hundred of new changes have been made. This includes remarketing, display netroks, broad match modifier, site links and so on. In 2012 further changes have been made to Adwords Interface, reporting, match types, geo-targeting, audiences, feeds, links, billing, TV ads, phone ads and so on.

Current 2012 (to May) include some specific technical changes: Improved Keyword Tool & Traffic Estimator, More Details on Quality Score Calculation, Adwords Labels, Near Matches for Exact and Phrase matches, new Mobile Apps, Google Adwords for Video and TV, more Billing changes, Google Analytics major change (no parallel running of old system), more changes too AdWords interface, additional features and complexity of the AdWords interface including major changes to the Keyword Tool and Traffic Estimator – the later with no parallel running.


Additional Google search features
Any search now has a news results, video results, shopping results, may be RSS feed, tweet results, image results, blog posts, book results, latest results, a Wikipedia result or two, a You Tube result or two and so it goes on(1).
Just consider the search page results for ‘social networking’. Google has tried lots of complexity, such as image adverts, video adverts etc.
In the search result for social networking the top red box has news results and image results. The bottom red box has blog posts, book results and searches relating to social networking.


Impact so far on organic listings?
My view is that Goggle’s changes to AdWords and its SERPs (Search engine results pages) have had a major impact on the balance between organic and paid search – many of the changes (see above) have the effect of reducing the importance of natural search or moving the organic listing off the first page results’ listing. Let’s call this the ‘crowding out’ effect.



Expanding AdWords page search
There is also a second factor at work. One clearly motivated by the profit incentive. AdWords makes money (it could be argued that it is the most significant profit generator that funds many of Google’s other activities)(2).

The second factor which is discussed below in greater detail is that we will see a greater percentage of SERPs with new ad formats and ad extensions blended into text adverts(4).
Note that the crowding out effect is noticeable here. The first red box shows two natural search results for the same company which, may or may not have been manipulated there(5). The second red box shows a ‘shopping results’ section with images and pricing information chosen by what often appears as a random algorithm.

AdWords Ad Sitelinks – taking space away from organic listings
Each of these advert extensions have the result of increasing the space allocated to paid search or AdWords adverts and reducing that available to organic listings.

AdWords sitelinks (6) is defined below (by AdWords) with an example below that: Ad Sitelinks is a new AdWords feature that allows you to extend the value of your existing AdWords ads by providing additional links to content deep within your sites. Rather than sending all users to the same landing page

A high quality (not the keyword quality field more to do with a high CTR%) to be permissible and you may need to be whitelisted (plead with your Google rep on hands and knees but it won’t always work). Great for paid searchers because it allows them to advertise new products, special offers and a continuing sales on discounted items. In effect this allows the AdWords advertiser an additional 140 characters in their adverts. Reported improvements in CTR range between 20%-30%. Bad for SEO.

Product listings and extensions – taking space away from organic listings
Product extensions pull relevant Google Merchant Center products into a box featured at the bottom of a traditional AdWords advert. Product extensions may show the product images, pricing and titles of products that are the closest matches with an individual advert – but it does not always work that perfectly.
Again you may need to be whitelisted and you also score a sufficiently high CTR and internal Google quality score. Google controls the product selection or rather the Plus box extensions. This can be very trying - sometimes the plus box extensions will not show on the adverts you like it to show on.
With whose major product sales were TVs (second green box), the Plus box extensions mainly showed accessories – see right
Possible good for paid searchers.
Again bad for SEO.

Other types of text adverts – taking space away from organic listings
Some of these are on beta or restricted use as of now. But my view is that they migrate to common usage:








All these three advert extensions are bad for SEO.

Other influences – taking space away from organic listings

And the list goes on. All possibly bad for SEO.

So where does that leave organic listings?
There are two effects which together are squeezing out the traditional role of SEO or making organic listings much more difficult to achieve.

The net effect is to a) diminish the importance of organic listings and b) make the life of the SEO professional that much more difficult.




(1) I am not the only one thinking this. See: Posted 04 March 2010 13:34 pm by Patricio Robles.
(2) Note that Google does not believe in segments (accounting definition) and therefore in its Form 10-K reporting does not have any segmental reporting. Google states: ‘we consider ourselves to be in a single reporting segment and operating unit structure’.
(3) The size of the first page has also grown though.
(4) Alex Cohen agrees. (Alex Cohen, Search Engine Watch, Feb 10, 2010) In this article he outlines a plethora of new diversity in Google’s AdWords text adverts.
(5) The European Commission claims that Google does manipulate results in an anti-monopoly case against Google in the European Union. See Financial Times: “Google hits back over algorithm dispute” By Maija Palmer in London, Richard Waters in San Francisco and Nikki Tait in Brussels. Published: February 26 2010 02:00.
(6) See for a good explanation.