First reported in August and September by Darrin Ward (USA) and iCrossing (UK) respectively, Google are now allowing some advertisers additional real estate at the top of the pops in paid SERPs. While this is largely a helpful step for PPC advertisers, what isn't discussed at length is the implications on natural listings, and the impact that has on SEO.
It's important to note that there are negative implications for brands invited to participate in the test. Firstly, the tracking needs four new layers added to a campaign to test the efficacy of sitelinks off one brand term. This can be a pain if you set it up with older tracking software which then requires individual tracking tags on the four different pages. A headache, but not an insurmountable obstacle.
You can't measure brand engagement on a home page when you deeplink searchers to a microsite within the main homepage. The advertiser provides Google with a list of ten possible sitelinks; while they respect the order you give those sitelinks in, Google reserves the right to change your list without notice depending on performance. These are brand searches, not additional query strings with pets, motors or business tacked on to the back - it's also possible that searchers will not feel like their particular query (let's say content insurance) is being met, even though they searched on the pure brand term. Let's not discuss additional revenue generation methods by Google, it's something akin to beating a dead animal with a nuclear weapon.
On the positive side of the argument, you have the potential to give your brand extra prominence (in paid SERPs at least, more on SEO later). More users can engage with different strands of your brand - pets, motors, business, etc - without having to search or navigate through different parts of your site. Let's also not discuss the conversion potential for pure brand queries in paid search without additional sitelink help, either - see dead animal/nuclear weapon reference above.
Does this hurt traffic to natural listings? Potentially. When pages in the natural part of SERPs are pushed further and further down, this can't help with a case for SEO and brand optimization. Forget about outranking on key generic terms, either - if there are three paid ads at the top of the SERP and one of them has sitelinks, you can pretty much forget about appearing above the fold on most computer screens. To be fair, paid sitelinks are largely within the domain of brand terms, not generics. However, the rollout potential is dangerous when you consider the work that goes in to jumping even a one place above a competitor in natural rankings.
It's far too early to comment on the efficacy of Google's newest PPC beta test, but it will be very interesting to see if it increases brand engagement on different areas of a site or drives searchers to exactly the same place they wanted to go in the first place - the home page.