Google’s decision to add review extensions to Adwords is a big thing. The percentage of clicks around searches has always skewed heavily in favor of organic listings to the tune of ~90%.
The paid listings, shaded in an orange background on the right and recently to the top, received <10% of clicks.
The reason for this? People inherently don’t trust paid advertising. No one likes being “sold.” Organic listings ostensibly were placed on page 1 in the results because they were the most trustworthy information on the web according to Google’s algorithm. We all know there are many holes in that theory but alas I digress.
So why is this move a big one? Well, according to a study, 72% of customers believe reviews on 3rd party sites. Hence, the explosion in unique users on Yelp to over 100MM monthly.
Google appears to be betting heavily that the integration of reviews on Adwords will lower a potential customer’s defenses and the heavy emphasis placed on 3rd party reviews will move said customer to click on the ad. It should also lead to a higher CTR and increased conversions for advertisers because potential customers will enter their site a little more comfortable after seeing the “favorable” review on the ad.
The obvious question is what will Google do to dissuade spammers from including fake reviews which lead customers blindly to websites that are potentially harmful to their interests? Not much is known at this time, but according to its policy, each review must come from a “reputable 3rd party source”. Google also states that ”automated and human-based systems” will be used to review and validate all review extensions.
It’ll be interesting to see how this impacts Google’s Adwords business. Nearly all of Google’s revenues today are generated from Adwords and the recent shift by consumers to mobile has been accompanied by a decrease in eCPCs due to how we find and access information on mobile. Google tried to minimize losses from mobile by implementing enhanced search, which limited the ability of marketers to decide how much budget was allocated to mobile vs. tablet and PC, and by also putting parameters in place for bid prices on mobile vs. the other platforms.
That move took place towards the end of June, so we likely won’t have a true indication of its impact for at least another quarter or two. However, integrating 3rd party reviews into Adwords is another step towards including social approval into paid ads and although Google doesn’t have the large swaths of social data that Facebook and Twitter have per se, marrying social approval with intent based searches could prove a boon to Google and the advertisers with a strong reputation.