How is The New Ad Rank Formula Impacting AdWords Performance? Reveals the Search Agency Report!

Dec 6, 2013 | 1,164 views | by Navneet Kaushal
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Google made changes in its Ad Rank formula, the determiner of the position order of AdWords paid search ads. As a result, the new formula now provides expected impact of ad extensions and ad formats along with bid and quality score.

After a month and a half, Search Agency has released a report on the latest findings on how the significant change has impacted the AdWords. Search Agency looked at 3,500 campaigns approximately across a varied client set and the isolated pre-existing ads with one of the following ad extensions:

  • Location extensions
  • Review extensions
  • Call extensions
  • Offer extensions
  • Sitelinks
  • App extensions

It was then compared with the overall ad performance of the advertisers. The performance of the two sets of data was looked at for two weeks by the team. The period of observation was two weeks before Google implemented the Ad Rank change and two weeks post implementation.

Search Agency observed that there was a significant improvement of 5 percent and 6 percent respectively in the impressions and clicks for ads with extensions after the Ad Rank change. However, the impressions fell 6 percent and clicks 1 percent when overall performance of the ads was observed.

The Click-through rate (CTR) for ads with ad extensions dropped 1 percent but remained much higher for ads with extension, after the implementation of Ad Rank changes. The overall CTR for ads with extension was 4.07 percent, which was 1.82 percent for control group for ads.

Matt Grebow, Director Search Media at The Search Agency said, "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".

Search Agency1 How is The New Ad Rank Formula Impacting AdWords Performance? Reveals the Search Agency Report!

The report clearly reveals that there was a dramatic improvement in ads with location extensions after the implementation of Ad Rank changes. The ads with location extensions had 50 percent increase in impressions and clicks grew by 95 percent. The CTR saw a rise of 40 percent but CPC fell by 32 percent.

"Overall, ads that include ad extensions garner a significantly higher CTR than ads without. That said, advertisers need to consider which types of extensions make sense for their brand. We always encourage our clients to test, but we also advise them only to opt into search products that are compatible with their marketing objectives," said Grebow.

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Navneet Kaushal is the founder and CEO of PageTraffic, an SEO Agency in India with offices in Chicago, Mumbai and London. A leading search strategist, Navneet helps clients maintain an edge in search engines and the online media. Navneet's expertise has established PageTraffic as one of the most awarded and successful search marketing agencies.
1.thumbnail How is The New Ad Rank Formula Impacting AdWords Performance? Reveals the Search Agency Report!
1.thumbnail How is The New Ad Rank Formula Impacting AdWords Performance? Reveals the Search Agency Report!