Google has increased the number of ads shown by default in its Local Universal listings from two to four. In this post, we take a look at what changes Google has made and the impact these are having on hotel performance, as well as what can be done to capitalize on these changes.
A few days ago we spotted the full-scale rollout of a modification to Local Universal listings that Google had been testing for several months: increasing the number of “above-fold” ad positions (visible to the user immediately on being served the page) from two to four. As of December 6, the new experience appears to be very broadly serving.
The new Local Universal experience, with the top four ad positions shown by default. The Local Universal results show up in the Knowledge Panel for navigational queries like “ashton hotel fort worth.”
Other key features of the element, such as the 14-day nearest Sunday booking window, are unchanged.
Traditionally, the click-rank curve for Local Universal always had a steep drop-off between ranks 2 and 3: most users will not click the “View more rates” button, but instead just click one of the two visible ads. As a result, positions 1 and 2 were very valuable and highly-contested.
When observing this change for the first time, our instinct was that we would see a smoothing of the click-rank curve for the first four positions, along with a significant increase in impressions and clicks for properties in ranks 3-4. Our own data strongly supports this. Since December 6, when the new functionality went live, we have seen a considerable increase in both impressions and clicks for properties in ranks 3 and 4.
Click and impression data for properties in ranks 3 and 4
We also made another interesting observation: properties in ranks 3-4 have seen their click-through rate (CTR) fall by more than 50% since the new changes went live, and their CTR values are now lower than those of properties in ranks 1-2. That is, properties at ranks 3-4 now drive clicks from impressions at a lower rate than before, but the increase in total impressions more than makes up for this. We have not observed any significant change in the CTR for ranks 1-2 yet. The net result of this shift is that, while rank 1 continues to drive more clicks per impression, the difference is much less pronounced than before.
It is still early, and we will continue to look closely at the evolution of the performance of hotels with this change, but as of now several things are apparent:
Rank one continues to be the highest-traffic position, and the extent to which that remains the case merits further analysis as we get more performance data. In the meantime, advertisers not seeking top rank should take advantage of the opportunity for increased traffic afforded by last week’s change. A bidding strategy that targets ranks 3-4 now seems to be a viable way to drive a reasonable amount of traffic without the considerable spends associated with rank 1 campaigns.