Google's Newest Search Ad Format, Loved and Hated by Brands

'Sitelinks' Work Really Well -- Too Well -- for Marketers Choking on Costs Per Click

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NEW YORK ( -- The most significant change to Google's search ads in years could be the most controversial to the nation's biggest brands.

Google Ad Sitelinks - Toys R UsEnlarge
Ad Sitelinks allows advertisers as many as five links in three lines of text.

Last fall Google rolled out the change to AdWords, called Ad Sitelinks, that allows search advertisers buying their own brand names to add additional links to a traditional search ad.

A typical search ad contains one link, or sometimes two -- one to the advertiser's home page and sometimes one geographic link. Ad Sitelinks allows advertisers as many as five links in three lines of text. Macy's, for example includes links to "free shipping deals," "shop online," "find a store," and "account login," in addition to a link to its home page. Toys "R" Us includes a link that says, "Buy one get one free little tikes!"

Bypassing the home page
These deeper links bypass the advertiser's home page but are giving them a huge increase in click-throughs; Google estimates a 30% to 40% increase over standard search ads. That click-through success has caused trouble for some marketers: Consumers searching for a brand using Google will click on the sponsored ad and not on the organic result. And all those clicks on the Sitelinks ad are also driving marketers' search ad bills up 30% to 40%.

"It's a bit like payola," said Kevin Lee, CEO of search-marketing firm Didit. "Many advertisers just think of it as another toll they have to pay Google."

Still, just about every marketer eligible opts for the new ads. Why? Because they're also getting much higher conversion rates, so the additional spending is generally covered by higher online spending. That and the Ad Sitelinks give them more real estate on the all-important first page of search results.

Higher search bills
But since these searches are navigational in nature -- someone searching for "Macy's" on Google is probably using the search engine as a shortcut to typing in Macy's URL -- the prevailing belief among some marketers is that these are customers of the brand anyway. And Google has just charged marketers an additional fee to reach them. For advertisers spending $100,000 a month on keywords, their bill just went up $40,000, a jarring increase for some marketers.

"You're buying your own customers back," Mr. Lee said. "Ironically, it almost always pays to do it. Does that mean marketers are happy about it? Absolutely not!"

Yet not all marketers are unhappy. For brand names that have meaning beyond the marketer buying the ad, Sitelinks is a way to take greater ownership of the name, and force alternative natural results further down the page.

Take Nationwide Insurance, for example. Nationwide is a descriptive term used by a lot of businesses, not to mention news and other search results. But by participating in Sitelinks, Nationwide Insurance can control the top-third of the first page of search results. Google restricts the ads to brand names, rather than generic (and expensive) search terms like "insurance" or "flowers."

For a company already spending 50% of their digital marketing budget on search, Nationwide is happy to reach existing customers and sell them additional products and services.

"In contrast to the organic results, I control the experience there," said Chris Cotton, director of interactive marketing for the insurer. For existing customers, he said, "it allows me to demonstrate other products they may or may not have."

With both the expanded search ad and the top organic result, Mr. Cotton said, "you end up using up a lot of real estate."

Innovation for search ads
From Google's perspective, Sitelinks is merely keeping pace with innovation in natural search. Over the past few years, Google has added video, maps, book excerpts and, more recently, real-time results from Twitter and Facebook into natural search results while search ads have remained pretty much the same.

"About a year ago we were looking at this and saying, ads are information too, so we kicked off an effort to revolutionize the format of search advertising," said Nick Fox, director of product management for ads quality at Google.

Sitelinks, which began testing last summer, is the first of those improvements to actually launch. "The results were stunning," Mr. Fox said. "From my perspective, it's the best thing an advertiser can do to their ad."

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