In my last post, I analyzed the recent changes to the Google Grants program. In case you missed it, Google now allows grantees to bid up to $2 on keywords, but your ads will appear below traditional AdWords advertisers. At the time, I predicted it would negatively impact the effectiveness of the program.
After monitoring the changes for one week, we took about 1.5 million impressions from charities of different industries and sizes to get a better idea of the impact.
The bad news is that in aggregate, clicks decreased by 7.5%, average position worsened by 8%, and average CPC inflated by 70%. The good news is that it wasn’t as bad as we feared, and in fact smaller charities came out stronger than before. Here are the full results from the study.
Inflation In CPC
As expected, average CPC inflated by about 70% to $1.24. By allowing grantees to bid up to $2.00, generally against each other, it made the same keywords more expensive for everyone.
Slight Drop In Ad Position
Surprisingly, average ad position only dropped very slightly from 2.35 to 2.54, or by 8%. I was expecting worse as a result of losing top positions to traditional AdWords, but it seems to have held up reasonably well. This was likely due to a majority of the ads not competing against regular advertisers. However, when we examined the impact for one particular charity that was prone to competing against paid keywords, there was a 13% drop in position.
Lower Spending Charities Doing Better
The silver lining in all this is that the grantees with less spend saw 82% more clicks and more than tripled their ad spend (although some of that is due to increase CPC). Considering that Google reports the average grantee spend at $300 per month, this is a positive sign as a whole.
High Spending Charities Doing Worse
Charities that were spending virtually $10,000 per month saw a 30% drop in clicks, simply because each click has become more expensive. Lower spending charities weren’t limited by higher costs because they had ad spend to spare.
Considering that most grantees were previously not reaching their maximum spend, it looks like a lot of nonprofits will benefit from the changes. You’ll naturally be spending more of your budget since costs have gone up, but more importantly be getting more traffic. For the organizations who were spending up most of their budget, unfortunately luck was not on your side this time, but take consolation in the fact that you’re still getting $10,000 every month in free advertising.