UPDATE – We have received word that ReachLocal is not affected by the new policy
Beginning April 1, 2008, Google has officially changed their display URL policy. In short, what that means is that the URL that shows in your ad absolutely must be the URL that visitors get to when they click on your ad. In most cases, if you have a website and are directly paying Google AdWords to advertise on Google then this should not effect you. After all, when someone clicks on your ad they directly reach your website. If you are paying a third party to manage your pay per click (PPC) advertising, you may have seen an interruption.
The Google AdWords Display URL policy has changed, and the following is a Google AdWords message describing the policy change.
This policy change is in line with other changes that Google has made to their policies, which has typically included a policy to do everything they can to make sure that the URL displayed is going to be the URL that you get to when you click on that URL. This been a goal of Google’s organic search for a while; now it is coming into effect on Google AdWords, and you can find out more information here.
Let’s take, for example, the case of ReachLocal (www.reachlocal.com). ReachLocal is a company that manages local PPC advertising for their clients. They appear to have been hit hard by this latest update to the Google AdWords policy. Local companies (such as a local air conditioning contractor) sign up with ReachLocal. When someone searches for a local keyword phrase such as “Dallas Texas air conditioning service”, a ReachLocal PPC ad shows up amongst the Sponsored Results. ReachLocal sends PPC traffic to their clients.
Before the new Google Display URL Policy took effect April 1, 2008, ReachLocal clients’ website URls were displayed in the search results. When someone clicked on the PPC ad, although something like www.dallas-air-conditioning-contractor.com was displayed in the Google AdWords ad, the visitor was brought to an unique page on www.reachlocal.com. However, after April 1, 2008, ReachLocal, just like all the other Google AdWords advertisers, has been forced to change the display URL in the Google AdWords Ads. Now, the display URLs show something like “dallas-air-conditioning-contractor.reachlocal.com”. The following is a sample screen capture from a recent Google search:
By looking at the ads, I personally would tend to click on an ad that I know is a specific air conditioning contractor. In this case, I probably would click on the first, third, or fourth ad. Before I was familiar with what ReachLocal does, I might not click on that particular ad, thinking it’s just another “yellow pages listing” of a bunch of other ads. Therefore, my conclusion is that ReachLocal and their advertisers must be seeing lower click-thru ratios, which ultimately has an effect on the Quality Score. A bad Quality Score ultimately means that you’re going to pay more.
Another consideration is that Google has an auction affiliate policy as explained here. Google will “only display one ad per search query for advertisers sharing the same top-level domain in the display URL.” So, in the case of ReachLocal’s local advertisers, ReachLocal can only have one type of local client as their client. If there are more, then those other local clients will “lose out”. For example, if more than one Dallas real estate agent hires ReachLocal, then only one of those real estate agents can bid on the word “Dallas Real Estate”, a highly-sought-after keyword phrase. Google’s auction affiliate policy only allows one ad to show up per domain, which includes subdomains.