AdWords is taking up more and more space

Google is letting ads take up more and more space in each search result. This has some effects, and there’s a lot of speculation about it. We’re not going to talk too much about it today, but rather about why this is happening.

When Google started, they had the premise that you couldn’t buy your way to the top of search results. AdWords, when it was launched, seemed like the perfect solution. With ads in the right-hand column and actual results to the left. They had created a way to make money that aligned with their own values.

However, when we talk about a different kind of values, business values, there’s a problem. Good values here require constant growth, and in Google’s massive success, they’ve found themselves in a bit of a bind. It’s been a while since they got there. They’ve come so far that it’s difficult to attract more people to search, no matter how well they do their job. Over the years, this has had some effects on the company. A good example is how much they invest in ideas or inventions that result in us spending more time online.

Some interesting examples include self-driving cars, Android, the Wi-Fi balloons, and so on. All of these things can clearly have their own merit, but they also have another positive (for Google) side. They make you spend more time online. The more time you spend online, the more you Google.

How AdWords makes more money even though everyone is already searching

Another solution, aside from getting you to spend more time online, is to get you to click on ads more often. For that to happen, there are three paths:

• Bigger ads
• Better relevance
• Trick people into clicking

Google is systematically working on all of these. Better relevance and bigger ad space are probably things no one would react to, but would they really trick people into clicking?

40% of searchers aren’t aware that the results at the top of the page are ads. This isn’t by chance. When Google tests new colors for ad labels (green right now), it’s not by accident which one they choose. Think for a moment about what they are testing—do they choose the version with the most clicks or the one with the fewest? When they used a very pale yellow background as the only label, they actually got stopped by a court—it was too unclear to be acceptable.

Also, think for a moment about Fat Thumb Syndrome—as much as 60% of clicks on mobile ads could be mistakes. Have you ever accidentally clicked on an ad on your phone?

Also, consider local results and map results. Fewer people click on them (at least that’s how it was for a while). It’s no accident that they push down the real organic results.

Does this mean AdWords is the only thing that works?

No, as usual, people don’t stop choosing the real results. Sure, it’s great to have an agency that does both AdWords and SEO, but I’m not afraid that SEO would lose too much. Yes, more clicks will go to ads, but SEO still provides such a strong return on investment that it’s a hard channel to beat. AdWords, which is great in many ways, tends to never reach the same return on investment per dollar spent, since you’re competing with your money to a large extent.

There’s also a (pretty large) group of people who both know that these are ads and have a reluctance to click on them for that reason. There are also areas where ad prices are skyrocketing, and there could be a lot to gain in those cases.