Did Google’s New Green Ad Labels Affect Ad CTR?
June 29, 2016
The Google SERP is constantly changing. In fact, Google Chief Economist Hal Varian admits that they “ran six thousand experiments on search [in 2011] and probably another six thousand or so on the ad monetization side […] Google is doing on a rough order of ten thousand experiments a year,” in Nate Silver’s The Signal and the Noise.
With so many frequent changes on Google, it’s impossible to notice them all. Most SEMs were quick to notice the removal of the right-side ads back in February but fewer realized another SERP update that has been silently affecting advertisers’ click-through rates (CTRs) for the last few months.
First noticed around April 14, Google has been slowly rolling out a change to the SERP in which the ads were displayed slightly differently. Before April, you may recall that ads were shown with a small yellow “Ad” label beside the display URL.
Now, that yellow ad label is green, and Google has confirmed that change will affect all search ads moving forward
The change was a subtle one to most, but many industry experts took notice, and I’ve heard some questions about how or if this new green “Ad” label would affect their ad CTRs, if at all.
How Google’s New Green Ad Labels Affected Click-Through Rates
I did what I normally do in times of confusion and turned to the data. To see if the green ad markers made any difference, we want to compare how CTRs have changed before and after this change that occurred from mid-April to now. And as with all experiments, we want to define a control group that was not changed during the test.
Conveniently, this change only affected searches on Google.com, but not any other ads Google runs on its search partner search engines, like Ask.com. The SERPs are identical, except the search partner SERPs never served a marker – either Yellow or Green.
You can see two examples of the same ad served on Google.com above and Ask.com below for contrast:
Search ads for “Bruins tickets” on Google Search and Ask.com, a Google Search partner, yield the same ads – but search partner engines have never shown their ads with an “Ad” marker.
So, if we compare how search ad CTRs differ between Google.com compared to the same ads on search partner engines over the past few months, we’re able to see exactly how this these green ad labels have changed CTRs. The left axis below is the relative CTR of the two ad types (the ratio of Google search ad CTR to search partner ad CTR):
To spell this out: Before the ad label change, the search ad CTR on Google was roughly 11 times higher than that on a search partner’s page. Starting the week of 4/16, when the green ad markers began to roll out, we start to see that figure rise. Now that this change is universal, when this SERP rollout was complete, CTRs with the new green ad label on Google.com were up approximately 15% relative to the control group on the search partner sites without the ad marker. Now Google.com search ads get approximately 13 times the CTR of partner site ads.
Why Would the Green Label Increase CTR?
It looks like the green ad label (displayed next to the similarly colored display URL) may be less noticeable than the old yellow labels. As searchers notice these green labels less, it makes ads look less distinct from the organic results and thus drives ad CTR up. In a world where nearly half of users couldn’t identify paid ads from organic results and we’re become more used to native advertising, this subtle change to make ads look more natural on the SERP is likely helping Google monetize the ad space more effectively – and it’s also good for advertisers, to be sure.
The change is long overdue, in my humble opinion. When these yellow labels were first introduced to the SERP in December 2013, we actually saw a 15% decrease in ad CTR on Google in the following months:
Bonus Effect: Less Click Fraud?!
But SEMs may have more to celebrate than just a boost in their ad’s CTRs. Not only are users more likely to click on their ads, but it appears that bots and spammers may be less likely to click on these search ads!
Since the green labels were introduced, invalid clicks from automated traffic have been falling substantially each week, and the invalid click rate from these search ads is currently down roughly 35% since early April!
TL;DR
Google’s ads have finally gone green and advertisers should be celebrating that both the quantity and quality of their clicks from PPC ads have improved significantly over the past few months as a result.
Data Sources:
This report is based on a sample of 2,708 WordStream client accounts in all verticals who were advertising on both the Google Search Network and Search Partner networks between March 7 and June 9, 2016.
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