If case you haven't noticed, pay-per-click ads are slowly taking over Google's search engine results.

That should come as no surprise since approximately 97% of Google's revenues are generated by its core business, search engine advertising; Google is understandably protecting and extending its revenue turf.

If you're a business that depends on search ads to drive traffic, you probably see that as a good thing.

If you're a business that depends on organic, unpaid search results to drive traffic, you've undoubtedly seen a steady decline in visitors and sales.

"The click-through rate of paid search advertisements on Google now outnumbers 'free' organic search result listings by nearly a 2:1 ratio for high commercial intent keyword searches conducted in the U.S.," says Larry Kim, the founder and Chief Technical Officer of WordStream, a PPC technology and search engine marketing software company that just published some research on the state of Google search.

(WordStream defines a "high commercial intent keyword" as a keyword entered with the apparent intent to purchase a product or service, like "buy an iPhone" or "Seiko watch.")

So if you think no one clicks on Google ads, you're wrong: When people are searching in order to investigate or make a purchase, over 64% click a sponsored result. Keep in mind unpaid clicks still account for the majority of Google search clicks... but if a keyword is valuable to a business, PPC advertisements typically generate double the number of clicks compared to organic results.

Why? Google has steadily introduced bigger, more targeted, and more engaging sponsored ad formats:

  • Product listing ads: Previously free Google Product Search was transitioned into a "purely commercial model" in May. Product listing ads include large images and are automatically triggered if someone searches for a product in an advertiser's Merchant Center account.
  • Remarketing: Allows visitor tracking via cookies to follow users to various pages and display relevant banner ads. (That's why if you search for "rent a Tuscan villa" you'll start to see travel ads pop up on the sites you visit... and it's why jet ski ads are popping up all over the place for me.)
  • Click to call ads: Mobile ad formats that allow customers to call a phone number with one click.
  • Social ad extensions: Show who +1d a business's site.
  • Bottom of page ads: An oldie but a goodie designed to catch the user's attention before they head off to page 2 of the search results... or refine their search term.

Google has also increased the on-screen real estate for paid ads for high commercial intent keywords. In some cases, between the top of the page and the right-hand side,  sponsored ads take up approximately 85% of "above the fold" pixels. As a result the top three sponsored ad listings generate for over 40% of clicks on those pages, and product listing ads 19%.

And how, you might ask, do Facebook ads compare? According to Kim, "Total click-through rates for Google ads on high commercial intent queries are up to 600 times higher than the click-through rates for ads on a typical Facebook page."

For more detail, check out the WordStream War on Free Clicks infographic, and if you're using Google ads, consider trying WordStream's free AdWords Performance Grader. (It's a pretty neat tool.)

And if you depend on product or brand keywords to drive traffic and you've focused almost solely on traditional SEO strategies to improve organic search results... understand that Google has made your life even harder.