Last month Google made a big change to the algorithm behind ranking ads in paid search: beyond calculating rank using max CPC bid and Quality Score, Ad Rank will also be determined by an ad’s expected impact from extensions and formats. We take a look at the anticipated effect of this update and offer some insights on the logic behind Google’s decision as well as advice for performance marketers going forward.
From a user perspective, we should expect an improved experience as the change will encourage advertisers to improve the quality of their ads in order to have them rank higher. As such, this is a logical move by Google, as it will reward well managed, high quality and relevant ads. Advertisers should expect average CPC to rise at first due to aggressive competition to gain top rank, although it is possible to reduce these costs with the right combination of format and extensions. Going forward, smart performance marketers will monitor their campaigns very closely and optimize ad extensions accordingly.
By: Anna Stoyanova, Search Director, Havas Media UK; and Eleanor Quint, Search Manager, Havas Media UK