Google and sponsored search results: is there a “war on free clicks?”

What’s happening to Google? The search engine that famously barely tolerated paid links has transformed into a high-powered advertising engine that, in some cases, leaves just 15 percent of page space for regular, non-paid, organic listings.

Online marketing company Wordstream just completely a study of “high commercial intent” search phrases — keywords that indicate a potential sale may be near. For those queries, Google’s unpaid search results have almost disappeared from “above the fold” screen real estate.

VentureBeat spoke with Larry Kim, Wordstream’s chief executive.

“We’ve seen more and more sponsored results and fewer and fewer organic links on Google pages,” Kim said. “The pace has accelerated considerably over the last 12 months, and especially the last 90 days.”

The net result of Google’s various changes and updates is that search engine optimization is becoming less and less effective. When even the highest-ranking sites are buried beneath a sea of paid links, highly search engine optimized sites are essentially competing for ever-smaller slices of the same pie.

Kim calls it a “war on free clicks,” as Google aggressively monetizes search results.

And it seems to be working. Particularly since Google integrated Google Shopping results into main search pages, sponsored results account for 64.6 percent of clicks, compared to only 35.4 percent for organic search results. Note that this is only for terms that indicate searchers are looking to buy something.

Perhaps a bigger problem, Kim says, is that almost half of web surfers can’t consistently tell the difference between sponsored results and organic results. (Just a month ago, search expert Danny Sullivan asked the FTC to review Google’s ad-labeling practices for similar reasons.)

The Google rationale is fairly obvious. Google’s revenue is still 97 percent from advertising, and the equation is simple: Google revenue = number of searches X number of ads X clicks X cost/click. Make any of those numbers bigger, and revenue goes up.

Judging by the number of ads on this page, Google revenue is going WAY up.

The question is, however, will users eventually rebel against an extensively commercialized search environment?

See all the details of Wordstream’s research in the infographic below: