The Conspiracy Theory

Have you noticed over the past six months that natural search results are gradually disappearing from the first page of Google? No? Then the following post might seem like a conspiracy theory to you. But have an open mind.

Just humor me and do a Google search for any term that could end in a potential advertiser making some kind of profit. Everything from “checking account” to “car insurance” to “Abraham Lincoln costume” returns a results page that is increasingly cluttered with some form of paid results or a link that takes you to another Google property.

Most of these updates are made to the search engine to “increase usability” or “mirror user intent”, but it’s still interesting that almost all of these updates that make it easier to access information are also ways for Google to very quietly make a little more money off of the search results they show people.

Where’s Your Proof?

A few examples can be pointed to that prove out my theory.

1. Redesigning search results: Google announced on Wednesday that they were redesigning the search engine results page to “to provide the best experience for [their] users” by removing ads from the side of the page and place them at the bottom instead. Yes, this might provide less clutter on the page, but they also make the top spots even more valuable to advertisers now. After all, ads above the fold are seven times more likely to generate clicks. And now that the ads above the fold are in short supply, we are going to be paying more to get them.

2. Sitelinks: When I search for Empower client “U.S. Bank” to login to check my account statement, I’m now served six sitelinks. This is up from the previous four sitelinks, below the top ad (pictured below) that take me to supposedly more relevant deep content within a website. These results also conveniently push down the natural rankings. Add to the fact that Google now serves internal sitelinks for natural results, and suddenly there’s one natural ranking above the fold.

Google Sitelinks

3. News Results: See the screenshot below for the term “online banking”. Notice that aside from the large amount of real estate dedicated to paid ads, news results also appear in the natural search results. Now you may be asking, “how is Google possibly making money on that?”. Well click through to the top news story and you’ll find there’s a DART Floodlight tag on the page. Remember, they make money off of display ad exposures too, not just clicks.

Google News Results

4. Places: When I type in “auto insurance”, I see the standard paid search results with the various ad extensions, which give me more incentive to click, but I also see the natural results heavily populated with localized search results powered by Google Places. When I click through to these Places results, not only am I served more ads, but I’m also served results that are solely powered by Google users since they stopped using results from other platforms. Sorta takes away the need to visit Yelp and Citysearch, or use their apps, all things that were the major revenue drivers for those companies.

Google Places

5. Social Search: I’ve been observing social search for quite awhile now, and while it is an extremely exciting development, it also gives incentives for users to stay logged into their Google profiles and to share content across its new social network. Right now, Google Plus doesn’t show any advertisements to its users, which is one of the many reasons I love the platform. But we all know that the ads will come, the same way we accept them now on Facebook, which is scaling its ad serving platform to hit $7 billion by 2013. There is obviously a lot of money to be made in owning a social network, which is why we will see Plus become increasingly integrated into all Google products in the future, making it a bigger part of the everyday lives of Google users.

Where’s the Motive?

The above are just five examples. You could also include Google Advisor, shopping results, and the endless list of ad extension updates to Adwords, and it becomes very clear that Google knows the search page is where it is going to continue to make most of its revenue and there are no shortage of new ways for Google to capitalize on information. And I can almost guarantee that advertisers and consumers will continually be told that each update is for their benefit.

But how much could this really be worth? Take the term “online banking” I searched for above. Google’s own Adwords Keyword Tool tells me that more than 20 million people search for it monthly and that the approximate cost-per-click is $1.41 (which is a very low estimate, trust me). Assume that 25% of people click-through an ad since historically about 70-80 percent of web traffic goes through natural search results. Google could make more than $7 million off of that one word every month. The Oxford English Dictionary currently contains over 170,000 entries. And Adwords is just one ad serving platform.

Compound that with the fact we typically see 1-3 natural search results now, as opposed to the 5-7 we saw a few years ago, and the idea that Google’s platform is going to be more and more populated by paid advertisements does not seem so crazy. They are without a doubt one of the smartest companies in the world. And smart companies make money. Lots of money. Any way they can.

:: By Alec Painter, Digital Search Strategist

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