Google recently announced that AdWords display URLs can no longer contain capitalization in the root domain. Capitals in subfolders are still acceptable in the display URL (e.g., BlueAwesomeWidgets.com becomes blueawesomewidgets.com; but blueawesomewidgets.com/BigBlueWidgets is still good to go).
Google claims to have based this decision on testing and research. Supposedly, they tested this change on a portion of their search traffic and it led to "better" results.
This testing is nothing new. Google continually tests tweaks to their search engine results pages, and most of the changes benefit searchers and advertisers.
Many advertisers, myself included, have performed extensive testing on display URLs. Most of us have found that using initial caps gets a better click-through rate (CTR) than all lower case -- it's easier to read, and grabs attention better. It also prevents the possibility of unfortunate morphing of words that shouldn't happen, as illustrated in this SEW Forum thread.
Furthermore, some advertisers are concerned about branding. For many companies, their official URL brand contains initial caps. They've incorporated their brand into their website, printed materials, business cards, business vehicles, and so on.
And they use the same brand in their pay-per-click (PPC) ads. Not anymore. More than one advertiser is publicly considering pulling out of AdWords because they can't use their proper brand name in their display URL.
Let's look at this another way: advertisers have tested all lower case against initial caps, and found that lower case gets a lower CTR, which ultimately leads to less revenue for Google. Advertisers have created brands around URLs with initial caps, and are considering pulling their dollars from AdWords altogether, which ultimately leads to a lot less revenue for Google.
Even Google themselves, in their AdWords Help section, says it's a best practice to use both upper and lower case in URLs because this drives a better CTR.
Why Did Google Make This Change?
We can only speculate. Maybe they're trying to level the playing field between PPC and organic listings. After all, display URLs in organic listings are displayed in all lower case, and there's no way to change that through search engine optimization (SEO) or other means.
Maybe they're trying to conserve bandwidth in the AdWords system. This wouldn't be the first time.
Google has made it clear that keywords with few impressions can hurt your quality score. A secondary concern is AdWords server space -- if every advertiser had thousands of keywords with zero impressions in their account, even Google doesn't have enough space to store all that data.
But do capital letters take up more server space? Does advertiser testing of display URLs somehow cause bandwidth issues?
Maybe they're trying to curb abuse of the display URL. While I haven't seen this, it's possible that people were trying to slip through URLs in all caps. In the past, we've seen abuse of dynamic keyword insertion trying to get around the "excessive capitalization" editorial policy.
Or, maybe their testing really did reveal better CTR with all lower case letters. It's rare that Google makes a change to AdWords that doesn't benefit their bottom line in some way.
If the reaction from the advertiser community is any indication, it's hard to believe that the display URL change can possibly benefit Google, especially if advertisers abandon AdWords. While the impact of the change remains to be seen, it's definitely one of the more puzzling modifications to AdWords in recent memory.
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