We’re all aware by now that the past couple of years have been exceptionally busy for the guys at Google. Major algorithm changes have come in across the board with Penguin, Panda and Hummingbird, but did you know that the search giant didn’t stop there, they’ve also added new algorithms to AdRank, the calculation in AdWords that determines PPC and the position your ad appears.
Previously, Google used two key metrics to calculate AdRank - the maximum CPC bid and the Quality Score of the ad - in order to determine how high the ad should be placed. Now, Google has added ad extensions into the mix, so the algorithms use three key factors, rather than two.
Before we look at ad extensions, a quick foray into Quality Scores is necessary, for those of you that don’t know how they work.
Basically, it assesses how relevant your ads, keywords and landing pages are to the person that sees the ad. Essentially, it’s all about how useful the ad appears to the potential visitor, so if your ad and keywords are about gardening, but your landing page is concerned with kitchen utensils, then you would receive a lower Quality Score than if everything was more closely related.
It is of course all geared towards offering the user the best possible experience, as are the majority of the recent Google updates.
To Check your Quality Score:
The score is calculated using various factors, which include:
A higher Quality Score means that it’s easier and less expensive for the keyword to enter the auction and leads to lower click-per-cost (CPC). It also means that your first page bid estimates are often cheaper and makes for higher positioning of the ad itself. Basically, the higher the Quality Score, the less you will pay to get your ad placed higher, so checking it and getting it higher is a worthwhile exercise.
For a more comprehensive overview of Quality Scores from Google itself, check out the video below.
The new player on the block when it comes to the AdRank algorithm is ad extensions. These are basically additional bits of information about your business and can take a few forms. They can be added manually, although some are automated.
App ad extension
Call button ad extension
As you can see, ad extensions essentially give users more options, such as the ability to call you with the press of a button, or download an app. What extensions appear will depend on what devices you’re targeting, as well as the information that you provide about your business online.
According to Google: “Extensions can help improve the click-through rate (CTR) of your ads. More clicks means more customer traffic.”
And of course, we’re all looking to gain more traffic, as these lead to conversions, which lead to sales. You may also see ad extensions that relate to location, reviews, ratings and sitelinks, so it’s worth ensuring that you have put in the work to ensure that these are appearing online. By this, I mean getting reviews and ratings from your customers, ensuring that you’ve claimed your Google Places listing and carrying out local SEO.
According to a study carried out by the Search Agency, the addition of ad extensions to the AdRank algorithms makes a significant difference. The company carried out a study which looked at 3500 campaigns across a large client set, picking out those that used ad extensions in ads that were pre-existing before the new algorithm came into play.
It then looked at how the ads performed both before and after the changes and found that impressions and clicks “improved significantly after the Ad Rank change: up 6 percent and 5 percent respectively.”
However, it also found a slight drop in CTRs: “It’s important to note that our study is not drawing a causation between revisions in Google’s AdRank formula and changes in click-through rate. The decrease in CTR across periods was relatively small—only about 1%. What we found more significant was the large jump in impressions and clicks, which points to ads with extensions possibly being served more often,” said Matt Grebow, director, search media at The Search Agency.
He went on to say that ads with extensions “garner a significantly higher CTR than ads without” but that it’s also a useful exercise for brands to consider which extensions are useful to the brand before implementing them.
It’s important to understand that even if the data is there, Google won’t always show ad extensions. This is more than likely due to the bid amount that you’ve entered and the quality of the keywords. In order to get the extensions shows then, check your Quality Score, ensuring that the keywords have a good value and make sure that your landing pages are all highly relevant to the ad’s content.
Other factors include:
To overcome this, of course you will want to increase your AdRank above all else, so ensure that you’re using high quality keywords that are relevant to your campaign and the landing page, as well as your industry.
The new algorithms came into being last October, so if you run an AdWords account and have seen a drop in CTRs, then it could be that your ranking has dropped due to ad extensions. Every AdWords account is affected by this from the smallest to the largest, so it’s not something to ignore.
With this in mind, if you don’t use extensions, then it’s about time you did if you want to compete in paid search. It doesn’t cost anything to use ad extensions, although it might in terms of how often your ad is served, so it’s time to get on and add yours.
With that in mind, I will be writing my next post on exactly how to set them up for beginners and how to ensure that your AdRank is as good as it can be, so make sure you check back soon.
