Important AdWords Auction Update.

Important AdWords Auction Update ...

Last week it was announced that the AdWords auction was receiving an significant update

The AdWords platform has evolved significantly in recent years with a wide variety of ad extensions enabling advertisers to create stand out for their PPC ads and serve more relevant ads to users based on their location, the device they are searching on and when they are searching.

Ad extensions include

- Sitelinks: Providing links to more relevant parts of your website thus shortening user journeys, improving user experience and positively influencing conversion

- Location extensions: Providing more localised users, typically on mobile devices, with details of your bricks and mortar stores and business locations, positively influencing offline conversion

- Call extensions: Providing users the option to call your business directly from the SERPs on desktop/tablet devices and via click to call buttons on mobile devices, improving the user journey

- Review extensions: Providing users with a 3rd party authoritative review of the products and services you offer thus increasing credibility and trust

- Social extensions: Providing users with positive feedback from other users of your products and services again increasing credibility and trust

- Image extensions: Providing users with images of the products and services you offer that will help inform their purchasing decisions

The significant change to the auction comes in the form that ad extensions like the ones mentioned above will now help determine the position of your ads in the SERPs via a change to the way ad rank is calculated.

Adrank was calculated by taking Quality score and multiplying by maximum cost per click

Ad Rank Calculator Before Update

Adrank is now calculated by adding the impact of your Ad extension selection to the original formula

Ad Rank Calculator After Update

The change means that the “influence of ad extension selection” should be thought of as a tie breaker where QS * Max CPC is even between two advertisers. This is where Google determines the likely positive impact an advertiser would expect to see through their selection of ad extensions and favours the advertiser who is making the best use of ad extensions.

The change to ad rank is not something that directly changes QS calculation though. One key benefit of providing users with useful ad extensions is that click through rates (CTR) typically improve by around 10 – 15%. CTR is a significant determinant of QS thus ad extensions indirectly impact QS calculation in this sense as they did before.

We regularly review the use of ad extensions for our clients with a view to maximising stand out in typically crowded SERPs. For more recent examples read our making the most of your PPC extensions blog post. 

Please read through our PPC case studies or get in contact with us to find out how we can help you best leverage ad extensions and improve your paid search performance today.

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