Revenue increased 11.9% in Q1 of 2015, to $17.26 billion compared with $15.42 billion in the year-ago period.
The search giant first rolled out yellow ad labels next to paid links on smartphones and tablets, and in recent months the labels have also begun appearing on desktops. The change is a subtle shift from helping users follow links by clicking on underlined text to tapping a target instead.
As part of an overall refresh to the look and functionality of Google Search on its 15th birthday, Google Inc. has begun labeling paid ads in search results with a yellow button reading “Ad.” It started the trials on smartphones and tablets, a spokesman for the company says, but today more consumers are seeing the yellow signals in their desktop searches, too.
When Google announced the search refresh in September, it said in a blog post that the new display was “cleaner and simpler,” and “optimized for touch, with results clustered on cards so you can focus on the answers you’re looking for.” By cards, Google refers to a new organization of the types of results as they appear. For instance, a search for books on “Malcolm X book” returns a large shaded area at the top of the page with small images of various Malcolm X books. Clicking on any one reorganizes the links beneath to show results more related to that title.
Tim Kilroy, CEO of search marketing technology vendor AdChemix and a former e-commerce executive at retailers Wayfair LLC and Karmaloop Inc., says the addition of the mobile-first design changes to pages viewed on desktops is about more than Google standardizing its display on all devices. “This is clearly moving towards touch as a focus,” he says. “In the old days, the underlined hyperlink told you where to point your mouse. Today, your finger hits a touch target—it is a subtle difference, but the underline doesn't help you click the link with your finger. As all of the world moves away from the mouse, it makes sense that the interface would adapt.”
Additionally, Kilroy speculates that Google simultaneously is helping to drive more clicks to ads with its search refresh. For certain kinds of searches, such as for products, Google has begun showing more paid ads in the results when the engine is sure of what the consumer is seeking, he explains. “So clearly in the case of products, Google thinks that the searcher is better served by ads than by organic listings,” he says.
“My instinct tells me that this, in aggregate, drives more clicks on ads,” he says. “This is not to say that Google is deprecating the quality of its organic results, but rather that advertising links have risen to the quality of relevancy that Google is able to provide organically.”
As Google considers ads as more relevant to consumers in certain contexts, retailers will need to start measuring the value of both paid ads and organic search results more holistically, says Seth Dotterer, vice president of marketing and product at Conductor Inc., a company that helps retailers with their search engine strategies. “We often see retailers who view their paid and natural search strategies as separate things—and that’s a huge mistake,” he says. “Especially as the listings merge, you need to have an approach that takes into consideration both so that you can optimize your spend and efforts.” For example, if a retailer consistently sees its organic links appearing at the top of searches, it might not want to spend money on paid ads to promote those links, or vice versa, he says.