How Google could be earning billions by making just one small change to its search results layout

Last week Google rolled out one of the most drastic changes to its search results format by adding little logos (called “favicons”) next to organic search results. However, users saw this as a “sly” attempt to make ad results less distinguishable from organic search results.

It’s interesting how the company disguised it as an attempt to improve the user interface and experience and even claimed that the purpose of this change is to “(help) searchers better understand where information is coming from, more easily scan results & decide what to explore”. Google also defended the move by referring to the fact that this change had already been rolled out for mobile search users months ago and no one complained.

It’s also worth noting that until 2013, Google’s ads had a separate background color which would help users distinguish them from organic results. In fact, even post 2013, different colors were used to demarcate ads which helped users identify where ads ended, and organic results began.

All of that has changed and it hardly seems harmless. In 2016, Google justified removing the ad label color with the following statement: “We want to make it easier for users to digest information on the page, so we’re gradually trying to reduce the number of variations of colors and patterns on the page and bring a little bit more harmony to the page, which is why we reduced one of the color elements on the page.” However, in my view, adding colorful company logos next to organic results would also increase the color variations on the page and disturb this “harmony”.

It’s hard to dismiss the feeling that this “harmony” may have something to do with boosting Google’s ad revenue. According to one digital marketing agency, click-through rates have already increased for some search ads on desktop, and mobile click-through rates for some of its clients increased last year from 17% to 18% after similar changes to Google’s mobile search layout.

Let’s not forget that Google is at its core an ad business with 85% of Alphabet’s $136bn revenue in 2018 coming from ads. I’m curious to see research around the actual extent to which this seemingly small design change could increase these ad revenues.

For now, as a result of immense backlash and criticism, Google rolled back the changes for most users but has said that it will continue to iterate on search designs and the favicons may not be gone for good.