A paid search algorithm update by Google has led to an improvement in the performance of PPC adverts that include an ad extension.
But overall the new AdWords Ad Rank update actually caused a slight decline in ad performance.
The update, which was announced back in October, altered the way that Google determines the order of paid search ads by adding in a third variable alongside the maximum bid and quality score.
This new variable is the expected impact of ad extensions and formats, and it has apparently had a notable impact on PPC results. So in effect, the use of ad extensions and formats can now influence ad position in the SERP.
The elements that are considered when determining the potential impact of extensions and ad formats include relevance, click-through rates, and the prominence of extensions and results on the SERP.
The results of the study are summarised below, but firstly here's a run through of the ad extensions that Google takes into account.
Google’s ad extensions allow marketers to include additional information in their PPC ads, which can lead to increased levels of engagement.
So for example, marketers could include up to six different sitelinks within the ad unit that lead to important and relevant pages on their website.
Other formats include location extensions which give the business address within the ad unit, click-to-call buttons, social extensions, seller ratings, app extensions, review extensions and automatic offer extensions.
This video from Google gives a simple summary of how they work in practice...
The study conducted by The Search Agency analysed the paid search results for two weeks both before and after the new algorithm update, looking at how it affected impressions, clicks and click-through rates, CPC and average position.
It focused specifically on adverts that included one of the following ad extensions:
- Location extensions.
- Call extensions.
- Review extensions.
- Offer extensions.
- App extensions.
These were then compared against the overall ad performance for the same set of advertisers.
The results showed that adverts that featured ad extensions generally benefitted from the Ad Rank update, while the overall performance showed a decline.
Specifically, impressions and clicks improved by 6% and 5% respectively for those with ad extensions, while the same metrics declined by 6% and 1% for the standard ad group.
While CTR declined slightly for ads with ad extensions, the relative increase in impressions and clicks was substantially beneficial for advertisers.
Finally, CPC declined 5% on ads with ad extensions and average SERP position improved 4% - this growth was twice as large as the overall ads group.
The impact on different ad extensions
Looking at how the update impacted specific ad extensions it appears that, with the exception of app extensions, all formats saw an increase in clicks after the change became active.
Location and review extensions appeared to gain the biggest boost in terms of impressions, with increases of 40% and 58% respectively. This could potentially be due to the increased focus on location-based search, which has become more important recently due to the increase use of mobile search.
Ads with extensions that saw an improved in click-through rate were rewarded with a decrease in average CPC.
While its up to marketers to work out which extensions are most effective and relevant for their own campaigns, it does seem that the Ad Rank update has improved the impact of PPC ads that feature ad extensions.
The Ad Rank update is an indication of the strong correlation Google sees between ad extensions and click-through rate, and their use can lead searchers not only to interact more frequently with the ad, but also to take desired on-site actions.