Google AdWords has rolled out an update to Ad Rank, the algorithm it uses to determine the position of Pay Per Click ads.
The update, announced in an AdWords blog, means that ad extensions and formats will now be factored into the algorithm. Extensions can include business address, phone number, offer extensions and sitelinks.
Ad Rank traditionally used the maximum bid and the ad's Quality Score to determine the position of ads; the new third element it will take into consideration is "the expected impact from your ad extensions and formats". In judging this, Google will take into consideration the relevance and click through rate of an extension. However, Ad Rank will also now be determining whether or not ad extensions are displayed, and will automatically display the most useful and highest performing extensions.
As for the impact on cost per click, Google explained:
"You may see lower or higher average CPCs in your account. You may see lower CPCs if your extensions and formats are highly relevant, and we expect a large positive performance impact relative to other competitors in the auction. In other cases, you may see higher CPCs because of an improvement in ad position or increased competition from other ads with a high expected impact from formats."
Enhanced extension targeting
When Google rolled out Enhanced Campaigns earlier this year, extensions became adjustable at ad group level. Businesses could therefore choose the most relevant extension to include based on the landing page or detailed scheduling that Enhanced Campaigns provides.
Natalie Booth, head of search at theEword, commented: "Google has always been keen to provide high quality and relevant ads to users, as proven by its strict guidelines and removal of so many 'bad ads'. For many businesses including a relevant ad extension is already a useful tool, and for those not already using them, now is the time to get acquainted with the system."