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Are the days of cheap mobile search over?

While Google?s recent AdWords update is receiving a warm welcome thanks to larger ad formats, fewer top paid placements means marketers will have to pay more to get noticed on mobile. 

With mobile search volume surpassing desktop a year ago, marketers are looking for better experiences and Google is under pressure to boost mobile revenue generation, which continues to lag desktop. Google tried to deliver against both of these needs this week with a number of AdWords adjustments, including separating tablet and desktop bids, new ad formats and a tighter integration with Maps for clearer online-offline engagements. 

?Google's new AdWords changes are very significant and marketers should prepare to increase their mobile SEM and SEO budgets for late 2016 and beyond,? said Brian Klais, CEO and founder of Pure Oxygen Labs. ?Most of the changes are systematic in nature and designed to increase advertiser competition. 

?Google's theory is that larger ad formats will result in more clicks per impression,? he said. ?More expansive headlines mean a bigger canvas for advertisers to compete on. The larger ads will mean fewer ads per page, creating further upward pressure on CPC rates.

?As with other recent AdWords changes ? like removing the side rail ? the new ad format will suppress organic listings further down the page. If you're not advertising or ranking naturally in the top 5 spots it will be difficult to get visibility. The days of cheap mobile search ads and mobile SEO are over.?

Getting to work
The big changes include the provision for two 30 character headlines, replacing the one 25 character allowed previously. Additionally, marketers can now write an 80-character description whereas previously there were two 35-character description lines. 

Additionally, there are now two paid spots appearing above organic results whereas there used to be four. 

Marketers are likely to be happy about being to include additional text in their search ads. 

Advertisers who move quickly and adapt to the new format can leverage the additional creative real estate to weave in new messages that could result in more clicks and purchases. Additionally, ads in the new format are likely to look more aesthetically appealing compared to any older ads that are still showing up in results. 

However, marketers should not assume the switch over to the new formats will be easy.

?Simply pushing line one and line two descriptions together won?t work, plain and simple,? said Tim Krozek, CEO of Boost Media. ?Advertisers have written the two lines of text as disparate ideas, and when they are placed side-by-side, they don?t flow logically as a cohesive message.?

A win for big brands?
The reduction in the number of top paid spots could have a significant impact on some marketers. 

?Advertisers that used to depend on being in bid positions 5 to 7 on the sidebar, and more recently lived off of cheaper clicks in the top 4 paid search ad spots, those marketers will struggle,? Mr. Krozek said.  ?This change is a mainly a win for bigger advertisers that can afford to pay for what is now an even more scarce resource ? fewer spots on the SERP.?

Another welcome change is that keywords and bid options are now more closely tied to a device type, walking back some of the changes Google made several years ago with Enhanced Campaigns. However, some would like to see Google put even more control back in the hands of marketers. 
?These changes are not large enough that it reverses Enhanced Campaigns, where we?d be able to create, optimize, and track separate campaigns by device type,? said David Lau, vice president of paid search and programmatic at iCrossing. ?However it does help with the current limitations on bidding for devices ? we can now bid on tablets separately again ? and having desktop/tablet reporting separated.?

On location
With nearly one-third of all mobile searches related to location, according to Google, new location extensions will help advertisers showcase their business locations in search results. 

Google is investing in more branded, customized experiences for businesses on Maps. For example, Map users may begin to see promoted pins for nearby businesses along their driving route. Local business pages have also been refreshed with the addition of special offers and the ability to browse inventory. 

?The most innovative feature Google announced is the ability to place local search ads inside of Google Maps,? Pure Oxygen Labs? Mr. Klais said. 

?Geo-based searches are huge among mobile users, and of course Google Maps is one of the most popular apps out there,? he said. ?Enabling location-based advertisers to promote their logo as a ?pin? seems like an interesting first step forward towards smart location based mobile search ads.?