Google’s New Ad Rank Algorithm to Benefit Advertisers who use Extensions

Recently, Google launched an update to its Adwords Ad Rank algorithm. The Ad Rank algorithm determines where your Adwords ads appear on SERPs and how much each click costs. There is nothing particularly alarming about this new update, but it can have a negative impact on Adwords advertisers who do not use ad extensions.

To make a long story short, Adwords advertisers who use ad extensions might see lower CPC and better ad placement as a result of this update. What if you don't use ad extensions? If that is the case, you had better start using them now. Or else, your Adwords campaign can be more costly and less effective.

Now Ad Rank takes into account the anticipated effect of your ad extensions and formats. Until now, the Ad Rank algorithm was only looking at your maximum CPC and Quality Score. But now your ad extensions and formats also play a significant role in determining where your ads appear on SERPs.

The new update also puts a great deal of emphasis on your bids and Quality Score because they determine whether your ads are eligible to display with extensions.

Extensions make your ads more useful and interactive. They allow the advertiser to display more information in different ways and make it easier for potential customers to connect to their brand. For example, location extensions allow you to display your business name, address, and phone number along with your URL and description lines. Call Extensions allow users to click directly on the phone number displayed in ad text from their mobile phone. This can be a great thing for local businesses. What's more, extensions improve your CTR.

So if you are already using extensions and formats, you have nothing to worry about, right? Well, not really. In this latest announcement, Google has revealed that the new and updated Ad Rank is based on 'expected impact from your ad extensions and formats'.

What do these Ad Rank changes mean?

Ad extensions play a significant role in determining the price you pay per click and where your ads show up. Of course, Google wants advertisers to make use of all available extensions because they can improve CTR. Better Click Through Rates (CTR) means more ad revenue for Google. In the near future, Google may also automatically serve extensions that seem to be the most beneficial. That means advertisers will not have to worry about choosing the right combination of extensions. Besides serving extensions that match the context, Google says it will show the highest performing extensions and formats.

Since your Ad Rank determines whether your ad is shown with extensions, you will have to increase your bids and Quality Score for extensions to appear.

If your ad extensions are highly relevant, you might see higher CTR and lower CPCs in your account. On the other hand, if your ads are not eligible to display with extensions, you might see a drop in CTR. This can affect your Quality score and increase your costs. For the time being, this update only affects search ads appearing on Google Search.