Changes to Google’s Ad Rank Algorithm

Google is making big changes once again. About a month ago, Google rolled out Hummingbird, the new algorithm for organic search. You may have assumed Google engineers were on vacation sipping Mai Tais in wake of this recent update, but in reality, they’ve been hard at work updating another algorithm—Ad Rank. The way Google ranks its pay-per-click (PPC) ads is changing in a big way, so it’s important to stay up to date on how these changes affect your paid search efforts.

Recently, Google announced that the Ad Rank formula is taking into account whether or not your campaigns and ad groups contain ad extensions. We love ad extensions here at Blue Corona because they can potentially increase click-through-rate and make it easier for searchers to find what they’re looking for. Now that ad extensions are a component of Ad Rank, they’re even more crucial to AdWords success. Before we discuss how this directly impacts your AdWords campaigns, let’s break down the former components of Ad Rank.

What Is Ad Rank?

The Ad Rank formula is how Google determines the position of your paid ad, as well as how much you will pay per click on that ad. If you achieve a high Ad Rank, your ad will appear higher up in search results, and you will pay less per click. Prior to the recently announced changes, Ad Rank was made up of two crucial components:

• Max CPC bid—the bid you set on your ad groups or keywords to let Google know the maximum dollar amount you are willing to pay per click on your ad.
• Quality Score—a “grade” on how relevant and useful your ad is to Google’s users, based on expected click-through-rate, ad relevance, and landing page experience.

This means that before the algorithm update, improving Ad Rank was a matter of bid management, ad and keyword optimization, and great landing pages. Now, the presence of ad extensions is a determining factor in achieving a high Ad Rank. In Google’s words:

This means that if two competing ads have the same bid and quality, the ad with the more positive expected impact from extensions will generally appear in a higher ad position than the other.

Keep in mind that this new formula is already in effect and is likely impacting your campaigns at this very moment. If you aren’t currently using ad extensions, contact us today!

Types of Ad Extensions

There are multiple types of ad extensions that you can apply to your PPC campaigns or ad groups. Each type of ad extension has unique features, but all serve a similar purpose—giving searchers more reasons to click your ad.

Call Extensions

Call extensions allow your company’s phone number to display with your ad text. On mobile devices, they provide the searcher with a click-to-call button, so they can contact your business in one simple click. If your business is highly driven by appointments made over the phone, call extensions are a great way to drive more phone leads.

Location Extensions

Location extensions are similar to call extensions, except they display your company’s address with your ad text. These are particularly helpful if you operate as a retail storefront, or want to appeal to a local audience.

Sitelinks Extensions

Sitelinks display links to additional pages on your site, beyond the one landing page that your ad directs to. Again, this allows you to give customers more reasons to click on your ad. They also cause your ad to take up a larger space on the search results page. Sitelinks are a great place to advertise promotional offers and coupons.

Review Extensions

Want to let searchers know about the awards, accolades, or third-party rankings your company has received? Review extensions do just that. Always make sure that the quote you use is linked to the published source.

Social Annotations

Social Annotations display the number of Google+ followers your business has. Be sure that your Google+ URL matches your ad’s destination URL, and that your Google+ page has a significant number of followers.

How to Create Ad Extensions

Ad extensions can be added at both the campaign and the ad group level. To get started, click on the “Ad Extensions” tab in the AdWords interface, and choose which extension you would like to create.

Always keep in mind that extensions will not show every time your ad is served. The appearance of an extension depends on your bid, your quality score, your position, and Google’s approval. As a rule of thumb, add as many relevant ad extensions as you can to keep up with the new Ad Rank algorithm.

Which Ad Extensions Should I Use?

The next question on your mind is probably, “that’s great, but which ad extensions are best for me?” That depends on your business, your campaigns, and frankly, what Google determines to be the best experience for its users. At Blue Corona, we have a proven pay-per-click management system and tons of experience optimizing ad extensions. If you’re not sure where to start, give us a call or complete the form to your right!

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