We’re seeing a pretty big change currently occurring in the world of Google Adwords, which could see a massive impact in how people use the service. What is happening is that Google is going to be drawing down the number of search phrases that display sidebar links.

It has always been the case that Google would display a few links at the top of the page, which would be the most valuable and expensive positions to bid on, with a number on the side, which would allow those with a lower budget the opportunity to bid for first page placement, but in a less prominent position.

Google’s change is to remove the sidebar links that they display and simultaneously increase the ads that are above the fold from 3 to their new maximum of 4.

This change is something that they have been toying around with for years, but it looks like they are finally ready to implement it en masse and across the board.

The change, while seemingly small to outsiders, has the potential to have a huge impact on how people can use the adwords system. If you’ve got no experience in the area, you may be asking what impact this is going to have on your ads? Well, Google’s ad bidding system means that if you bid higher than your competitors for a first page listing, you will get that position more than them. That competition was potentially spread over 10 different listings, but this change more than halves the spread, which means that competition, and therefore the minimum bid needed, are going to increase.

Another negative affect that this can have is in the realm of SEO, search engine optimisation. Organic listings, as the free links on Google are usually referred to, depend upon exposure in order to be worth anything. Increasing the number of above the fold links to 4 means that less organic listings are going to be immediately displayed for the search query, which will likely decrease the click-through-rate of these listings.

In regards to how you can adapt to the increase in competitiveness in Google adwords for placement on the first page, you should stop judging the effectiveness of a click by the metric of cost per click and start using cost per conversion. If you in turn optimise your ads for how well they convert, then you get a clearer idea of your maximum allowed bid, as well as hopefully some insight into how you can increase your conversions.