Will pharma advertisers pay the price for Google's pared-down search pages?

Print 26 February 2016
Beth Snyder Bulik / FiercePharmaMarketing

Is Google's latest ad move going to cost pharma money? The tech giant says it's removing desktop search advertising on the right side of the page, often referred to as right rail ads. With ad inventory available only at the top or bottom of search pages, some advertising experts are worried about cost increases.

Justin Freid

"The removal of those ads means there is less real estate available on a Google search engine results page, so it's going to be more competitive. It's like beachfront property--the less there is, the more expensive it is," said Justin Freid, VP of search engine marketing & emerging media at CMI/Compas. "We do foresee that there will be higher CPCs (cost per clicks) and more competition for those top spots. Basically, it will increase what it costs our clients to drive clients to their websites."

Based on early information, Freid estimates a cost increase of 10% to 15%.

An Ad Age article agreed that Google's move will likely raise cost-per-click rates for all digital search advertisers. One media buyer quoted in the article also warned that Google risks angering marketers, potentially leading them to take ad buys elsewhere.

However, Google search is akin to primetime TV--few online sites attract such high mass consumer traffic--and ditching it entirely could come with other concerns, such as reach.

More likely, Freid said, agencies like his will review media plans and ad placement strategies with clients to determine whether a more expensive Google search is still worth it on a case-by-case basis.

Google has been testing the idea for some time, but the abrupt implementation seemed to catch many people off guard. A Google spokesperson told Ad Agethat the move "is designed for highly commercial queries where the layout is able to provide more relevant results for people searching and better performance for advertisers." Some also think the move was made to bring the desktop product more in line with the mobile product, which does not have right rail ads.

"This is definitely something that's going to be big for pharma," Freid said. "We're already one of the biggest spenders as an industry on Google, outside of banking and insurance. So this is going to either going to cause us to spend a ridiculous amount more, or it's going to cause people to rethink their strategy and not be as aggressive (on search ad buys)."

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