Google’s Ad Rank formula now takes ad extensions into account, as well as quality score and CPCs. In this post, senior PPC account executive Joe Farley looks at the potential implications for PPC managers.

PPC just got a little bit more complicated. Google is now taking ad extensions into account when calculating Ad Rank.

What does this mean for paid search account managers? I’ve jotted down some of my thoughts on the subject below, but first things first, a refresher:

  • Ad Rank
  • the position in which an ad appears in Google’s SERPs (search engine results pages). Previously, this was based on two factors: the maximum you’re willing to bid for a click, and the Quality Score of your ad. Higher bids and better quality scores meant higher ad rankings.
  • Ad extensions
  • These allow you to include extra pieces of information alongside the traditional paid search ad ingredients of titles and creatives (ad copy).
  • These include location extensions (which tell your customers exactly where your nearest store is), call extensions (which make it easy to call your business from a mobile device), and review extensions (which let you include positive reviews underneath your ads).

Ad extensions are gradually becoming more and more popular with businesses. After all, there’s only so much great creatives can do – a positive opinion from a third party, or a mobile-optimised ‘click to call’ button could make all the difference in gaining customers’ trust and improving user experience.

And as adoption has increased, Google has responded by expanding its ad extensions offering. At first, businesses could only choose to display relevant site links. Now they can choose from many more – and there’s little doubt we’ll see even more extension types in the near future.

So, Google and customers believe ad extensions are Good Things – it makes perfect sense that the search engine is now incorporating them into its Ad Rank formula.

What does this mean for PPC campaigns?

If you’re thinking, ‘this is just a way for Google to encourage people to use ad extensions,’ then you’re most likely right. At least in part.

But ad extensions are far from a flash-in-the-pan novelty. They improve user experiences and, generally, improve click-through rates for brands too.

What’s more, this update to the Ad Rank formula also improves relevancy in terms of when and where ads are displayed. For example, if you’re searching for ‘Chinese restaurants’ on a mobile device, you’re more likely to see an ad with a location listing or click-to-call button – whereas a search on a desktop would typically show an ad with review scores.

In short, ad extensions are great and everybody should be using them.

Indeed, more and more people probably will. Even if they’re not convinced by the engagement-improving potential of ad extensions, brands will likely adopt them as a necessity. As they’re now part of the ad rank formula, they’re just as important a part of the account optimisation process as quality keywords, creatives and landing pages.

There are two potential implications of this which are worth bearing in mind.

Firstly, it is likely to unsettle the paid search landscape somewhat, with CPCs (cost per click) potentially increasing or decreasing as more people adopt the extensions.

It’s especially important to keep an eye on the positions of top traffic keywords. And remember, some ad extensions appear almost exclusively at the top of the SERPs – and these positions command higher CPCs.

Secondly, ads with extensions take up more space. So if more people start using them, it could mean organic search results are pushed further down the page.

Whether or not this is a deliberate move by Google to put more focus on PPC, it’s quite likely we’ll see more brands starting up paid search campaigns if ads are seen to take up so much prime SERP real estate.

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About the author:

Since joining ClickThrough as an apprentice in 2011, Joe has demonstrated enormous natural talent for PPC. Thanks to his paid search expertise, Joe is now a senior PPC account executive, and works on several large and complicated PPC accounts. Outside of work, Joe enjoys going to the gym regularly.