Google made a big change in October to the algorithm behind ranking ads in paid search. With this update, AdRank will take into account an additional component - the expected impact from your ad extensions and formats. This POV explores the impact of this change in detail and helps marketers understand how to adapt their AdWords approach accordingly. Read our Havas Media Group focus to understand more.

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adrank
extensions
November 2013

2. HAVAS MEDIA GROUP FOCUS
Google AdRank Extensions
Lead contributors
Anna Stoyanova
Search Director
Havas Media UK
anna.stoyanova@havasmedia.com
Eleonore Quint
Search Manager
Havas Media UK
eloenore.quint@havasmedia.com
Mark Sutton
Search Manager
Havas Media UK
mark.sutton@havasmedia.com
Claudia Rowe
Search Manager
Havas Media UK
claudia.rowe@havasmedia.com
Daniel Hinton
Search Executive
Havas Media UK
daniel.hinton@havasmedia.com
Lisa Butterworth
Search Executive
Havas Media UK
lisa.butterworth@havasmedia.com
© 2013 Havas Media Group
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3. HAVAS MEDIA GROUP FOCUS
Google AdRank Extensions
Google made a big change in October to the
algorithm behind ranking ads in paid search.
What is the change?
Google uses a calculation called Ad Rank to determine positions for paid ads.
Previously, Ad Rank was calculated using max CPC bid and Quality Score. With
this update, Ad Rank will also take into account a third component: the expected
impact from your ad extensions and formats.
Below is the official statement from Google for this change:
“When people use Google to research and buy things, they’re interested in the most
relevant and useful results. Ad extensions help by providing more information to
potential customers and additional ways for them to respond. For example, they
can call your business number, see your business location on a map, or choose an
even more relevant landing page that you’re promoting with sitelinks. Ad extensions
typically improve clickthrough rate and overall campaign performance because they
make ads more useful.”
More information is available on the official blog:
>> http://adwords.blogspot.co.uk/2013/10/improving-ad-rank.html
What is the expected impact?
Improvement for the user experience on Google:
• It will encourage advertisers to improve the quality of their ads even more since
they will need to increase their ad rank to reach higher position for the extensions
to appear.
• In Search results we expect to see more relevant ads, with beautiful extensions
that will be the most relevant to the users.
© 2013 Havas Media Group
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4. HAVAS MEDIA GROUP FOCUS
Google AdRank Extensions
We will hopefully see less of this...
And more of this...
For Advertisers, there are pros and cons:
• The overall performance of the ads is likely to improve since the algorithm will
show the highest performing ad extensions combination.
• The average CPC might decrease if the combination of format and extensions is
relevant and the Ad Rank is improved.
• We can however as well expect the average CPC to rise at first given that extensions
show on high positions and the competition might be more aggressive to rank in
these positions.
© 2013 Havas Media Group
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5. HAVAS MEDIA GROUP FOCUS
Google AdRank Extensions
What we make of it
• Overall we think this is a logical move by Google, if you’re doing a good job
of managing your activity and creating good, relevant ads then you should be
rewarded for it rather than just giving the top spot to the highest bidder. Similar
to how your Quality Score suffers if your mobile offering is bad / non-existent,
this change should only penalise advertisers who are behind the times, so for
most savvy companies and agencies this is a positive change.
• The only part of the announcement that is perhaps a little odd, is that the impact
of your ad extensions will form a third factor in ad rank alongside Quality Score
and bid. Given that the impact of your extensions is likely to be directly related
to their quality, it would have made more sense that this factor was included
in Quality Score rather than considered alongside it. The fact that ad extension
impact will be a third factor implies (though of course is not confirmed) that its
weighting in the ad rank calculation will be more significant than had it been
absorbed into Quality Score.
• What is needed going forwards is an extension level quality score or some other
similar indication from Google as to how much impact your extensions are having
on your ad rank so people have some basis on which to optimise what they’re
using - there’s presumably been something like that created in order to factor
extension impact into the Ad Rank calculation, but advertisers need visibility on
that in the front-end. Google is promising to improve reporting for ad extensions.
• This change is also likely to punish the smaller advertisers, who aren’t big
spenders or run by big agencies and thus don’t get access to the various betas. If
extensions that are still in beta get factored in then it would penalise those who
can’t access them, unfairly benefitting large advertisers.
• In any case, the adoption of ad extensions is likely to increase and create
additional competition for the top positions.
• On the other hand, SEO may lose out even more (or so it seems) by pushing
organic search results lower and lower down the page. This would however give
rise to some interesting testing opportunities.
© 2013 Havas Media Group
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6. HAVAS MEDIA GROUP FOCUS
Google AdRank Extensions
Next steps
• Ensure you are taking advantage of relevant ad extensions for your business.
Speak to your PPC team to prioritise the implementation of higher impact vs
lower impact ad extensions.
• Consider higher involvement with beta products which will give you a head start
and most likely a competitive advantage when the product is fully released.
• Monitor campaign performance closely and optimise ad extensions to improve
performance - e.g. test different sitelinks combinations or image variations.
© 2013 Havas Media Group
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