Google has this week announced a change to Ad Rank. Ad Rank is Google’s serving calculation on AdWords that determines where your ad shows and how much you’ll pay per click. With the changes made, Google has now said that Ad Rank will no longer be based solely on your maximum cost per click bid and your Quality Score, but instead will now also be based on the expected impact  of your ad extensions and formats.

So, what does this mean for you, as an advertiser? Well for starters, it means extensions and formats now play a part in the price that you pay per click and in the position your ads display. Google have said they want advertisers to use all of the available extensions that make sense for their businesses. “Ad extensions typically improve click through rate and overall campaign performance because they make ads more useful”, was their official line.

Google have said the changes to Ad Rank can affect:

  • The position of your ad on the search results page, with Ad extensions and formats now having an influence on this. If two competing ads have the same bid and quality, the ad with the more positive expected impact from extensions will now appear in the higher position
  • Your quality score and bids. In order for extensions and formats to appear these may need to be increased
  • Your average cost per click (CPC). You may see lower CPCs if your extensions and formats are highly relevant, but these may increase because of an improvement in ad position or increased competition from other ads

So how will Google estimate the expected impact of your ad extensions and formats? Well, they have said they will consider factors such as the relevance, click through rates and the prominence of the extensions or formats on the search results page.

To demonstrate, they have used the example of a person searching for garages, or auto repair shops as they are known in America, using their mobile phone. Using this example, the user might be most likely to respond to your ad when they are able to click to call your phone number or click a link for directions to your premises. By displaying these options, Google may then show a combination of call and location extensions within your mobile search ad.

But if someone was searching for garages using their laptop at home and your ad had earned the 3rd ad position above the organic results, Google may then show your seller rating and site links because they would be the highest performing and most useful combination of extensions that could be shown with your ad in this particular position.