Google Ad Rank Calculation Update

This week Google announced a major change to its Ad Rank calculation which is used in determining the position and CPCs paid by each advertiser in the Google ad auction.


Historically Ad rank has been calculated by multiplying your Max CPC bid by your Quality Score (Google’s assessment of the relevance of your keywords, ad copies and landing pages). But with this new update Google now also factors in the expected uplift from the ad extensions and extension formats that you are using in your AdWords Campaigns. In addition Google has increased the importance of Ad Rank in determining whether your ad extensions are eligible to be displayed along with your ad. Here are the full details of the update from Google:


  • Ad extensions and formats can now influence the position of your ad on the search results page. If two competing ads have the same bid and quality, then the ad with the more positive expected impact from extensions will generally appear in a higher position than the other.
  • When estimating the expected impact of extensions and ad formats, we consider such factors as the relevance, clickthrough rates, and the prominence of the extensions or formats on the search results page.
  • Because Ad Rank is now more important in determining whether your ad is shown with extensions and formats, you might need to increase your Quality Score, bid, or both for extensions and formats to appear.
  • In each auction, we’ll generally show your highest performing and most useful combination of extensions and formats among those eligible. So there’s no need to try to guess which extensions will help improve your clickthrough rate the most.
  • You may see lower or higher average CPCs in your account. You may see lower CPCs if your extensions and formats are highly relevant, and we expect a large positive performance impact relative to other competitors in the auction. In other cases, you may see higher CPCs because of an improvement in ad position or increased competition from other ads with a high expected impact from formats.
  • For now, this update only affects search ads appearing on Google Search.


Why has Google made this change?

It has been widely known that Ad extensions typically improve CTR which means more ad clicks and more revenue for Google. By making ad extensions a key component in the Ad rank calculation this will likely further encourage advertisers to take advantage of more of these Google features within AdWords.


Also as ad extensions generally only appear for ads in the top 3 positions in the SERPs it is likely that advertisers will compete more aggressively for these top positions in order to see the additional benefits that ad extensions bring to Ad rank which would ultimately mean increasing overall market CPCs.


What does this change mean for advertisers?

The Use of ad extensions will now be more important than ever. To ensure advertisers are getting the best position and lowest CPCs for their max bid they will have to ensure they are using the most relevant combination of ad extensions for each keyword, location, device and time of day. With ad rank now being dependant on the actual performance of these extensions, not just whether they exist, this gives advertisers another element to optimise in addition to ad copies, keywords and max bids which will give an advantage to performance orientated paid search agencies.


The changes will likely have a bigger impact for clients with a high reliance on mobile activity as ad extensions on mobile devices (location extensions, call extensions as well as sitelinks) provide a method of getting mobile users the content or information they want fast. Advertisers not utilising these features will likely see a drop in average position and/or increase in CPCs as a result of the Ad Rank update.


The changes will also mean that some businesses will need to make changes to their web design in order to avoid being penalised by this update.


E.g. Small businesses that have a website with only one or two landing pages will not be able to fully use sitelinks extensions unless they create more landing pages (Google policy states each sitelink must go to a different landing page)


Top Tips/ Recommendations

  • Ensure that you are eligible to use as many types of Google’s ad extension formats that are relevant for your business as possible. E.g. Sitelinks – Requires 1 unique landing page per sitelink
  • Location extensions – Include location information next to your ads via a  Google places account or by enter addresses manually in AdWords
  • Social Extensions – Does your business have a Google+ page linked to their website?
  • Call Extensions – Do you have a phone number that customers can call your business on?
  • Offer Extensions – Can you provide an exclusive offer that can be redeemed online or in store?
  • Review Extensions – Show accolades from reputable third parties below your ads
  • Analyse the historical performance of the extensions formats you are currently running to identify which formats perform the best by keyword category, device, location, time of day etc. Ensure coverage of your best performing extensions is maximised and increase relevancy where possible – E.g. Improve sitelink relevance by using ad group level sitelinks and use sitelink description lines, ensure offers and promotions are kept up to date
  • Look at which of the other available extension formats can be displayed in the SERPS in addition to your current best performing extensions and add these into your campaigns. For example call extensions, location extensions, social extensions and review extensions can all be displayed in addition to sitelinks in the SERPS so will likely have a positive impact on your Ad Rank. Google states that the ad platform will generally show your highest performing and most useful combination of extensions and formats among those eligible. So one option is to upload all extension types available and let Google pick the best ones. However how effective Google will be at picking the best extensions is yet to be seen
  •  Use device preference and scheduling on extensions to further increase relevance. E.g. scheduling call extensions for call centre opening hours, schedule offers between the start and end date
  • Look at what ad extensions and formats your competitors are using and how you can improve upon and differentiate your ad extensions to give you the advantage
  • Monitor changes in ad position and average CPC as a result of implementing different extension formats to see which are the most beneficial to Ad Rank for your activity
  • Monitor changes in ad position and average CPC as a result of implementing different extension formats to see which are the most beneficial to Ad Rank for your activity
  • Expect this to rollout across Display in the near future so start testing ad extensions and formats in Display now


This is clearly an important change from Google Adwords and brands should certainly take note.  Please get in touch if we can help .

Bing It On Google!


It is well known advertisers are more inclined to run their Paid Search campaigns on Bing if they can be easily replicated from Google.


Google have made major updates to their targeting option through the Enhanced campaigns platform and are setting a new industry standard. As a result, Microsoft have had to match this to enable the smooth replication to continue.


Microsoft clearly refuse to fall further behind the front runners Google, by ensuring that the Bing Ads platform has been upgraded to match Google Enhanced Campaign.


We explore the Bing update and see what the new opportunities are for advertisers


Incremental bidding on Bing

Prior to the update, Bing managed bidding on an incremental basis which allowed advertisers to increase their bids to achieve a stronger position on specific keywords when the user’s demographics meet certain criteria e.g. age range, day of week.


The old way:

The image below show the old way of managing bids on Bing:

 Old way of managing bids on Bing


This approach was hugely effective and allowed more precise targeting than the now established Google AdWords Enhanced campaigns platform. On the Enhanced campaigns platform, advertisers are only able to set bid multipliers by region or city based at a campaign level, not at the more granular ad group level possible on Bing.


However, following Google’s introduction of Enhanced campaigns, Bing recognised the need to update the way in which incremental bids are calculated in order to complement Google’s Enhanced Campaigns. So Bing have  mimicked AdWords Enhanced campaigns in order to allow advertisers to simply import their campaigns into Bing.


The new way:

New way of managing bids on Bing

The update will use percentage multipliers instead of adding multiple bid adjustments together as the approach did previously. Percentage bid adjustments will now be multiplied together rather than be summed. This is dependent on whether  your targeting combination reaches users that fit into more than one criterion.


It is perhaps unsurprising to note that the potential maximum bids using the new methodology will likely always be higher than when calculated using the old method.


The new approach in practice:

We have been testing this feature with one client over the past weeks, and have found that:


  • The maximum bids for multiple bid adjustments using the new method will generally be higher than those using the old method.
  • Incremental bids are rounded down to the nearest penny.
  • When you place an incremental bid for geographical location, day of the week, or time of day, you can use targeting to choose whether to display your ads only to target customers or to all customers. When you place an incremental bid for age or gender, your ads are displayed to all customers, but your incremental bid can increase the likelihood of your ad being displayed to the specified gender and age segments. In all cases, you pay the incremental bid only when one or more of the target criterion is met and your ad is clicked.


To sum up:

Microsoft have said that Bing Ads will continue to evolve the new incremental bidding approach with more advanced targeting options. So, we recommend keeping an eye out for more sophisticated bidding functionality coming from Bing Ads to help enhance the platform further. These could include negative bidding for less favourable audiences as well as device specific bidding adjustments. We believe that device specific options will prove valuable for advertisers who see lower conversion rates on either tablet or mobile as it will maximise their return on investment.


In the meantime, good luck with your testing of this update, if you have any questions please don’t hesitate to ask our team!

What’s in a picture? Testing the value of image ad extensions

Google has launched a beta version of image ad extensions. This has opened up new creative possibilities over traditional text ads and gives a more visual appeal to search results pages on Google.


Image ad extensions are still fairly new, however we were fortunate enough to gain early access to the beta, and became the first to launch the feature in the UK for the airline industry.


Subsequently, we have been carrying out tests across a number of accounts in order to assess the value of an image to a campaign. Do they simply make search results easier on the eye or can they actually lead to improved performance? We share our results and insights below.


What are Image extensions?

The introduction of image ad extensions enables you to “Show” and “Tell” with images on search ads. This means you can more accurately convey the product being promoted, for example, the colour of a dress, the style of a car or a particular shade of a lipstick. Secondly this provides a great opportunity for a brand to take up more real-estate on the search engine results pages. Overall, your ads become richer, more informative and stand out in a crowded marketplace. An example ad with the image extensions feature is below:


Image Ad Extensions Screenshot


Putting them to the test:

We worked with a client, who operates in the competitive retail space to produce images that would represent the brand appropriately and complied with Google’s policies. Due to the strict compliancy guidelines we had to change the nature of the test, which had originally been designed to coincide with a major industry event taking place during the testing period. Instead, the client selected a number of its top selling products and we tested these terms with images that closely represented the chosen brand.


Following implementation across a number of ad groups, we saw click-through rates improve by +96%. CPCs on average did increase, +60% which subsequently increased campaign costs. However, CPA actually decreased (-34%) due to conversion rates increasing by a significant +135%. Overall, we were able to increase revenue at an improved ROI.


The insights gained:

These are still early days; however our test demonstrated that ads with images can achieve a higher click-through rate than ads without images. Furthermore, the increase in traffic will help to drive more conversions as a result. Certainly, for this major retail brand, image extensions have provided a way to drive additional traffic to the site while still driving a positive return.


Things to consider when implementing image extensions:

  •  Image extensions will only appear if you are at the top of the page. So we would suggest being selective with keywords and bidding more aggressively on the chosen keywords to achieve the top spot to serve an image ad
  • Images must comply with Google’s image ad extensions policies. Take time to learn the restrictions and expect a lengthy review from Google prior to the campaign going live
  • Strategically use dynamic keyword insertion for your text ads. This is due to the feature currently only allowing an advertiser to test  a select number of ad groups
  • Include more call to action images, to drive more conversions


In summary:

Image extensions have opened the door to new and creative possibilities for Search advertisers to set their ads apart from the competition. They provide a more compelling way to promote your brand and engage the consumer.

Yandex Launch CPA Model for Yandex.Market

Last week Yandex announced the launch of a CPA model for their Yandex Market shopping comparison product. From next month customers will be able to purchase directly from Yandex Market, going straight to the checkout without leaving the webpage.


This massively simplifies the checkout process and should lead to a higher conversion rate for online stores. Using the CPA model, stores will pay Yandex a percentage of the value of each order, regardless of the product category.


Yandex say “We are now offering a benefit to stores and shoppers alike – online stores will pay only for tangible results, while shoppers will find it easier to find and buy what they need.”


Sarah, a Yandex Certified analyst at Net Media Planet thinks “the CPA model, offered alongside the normal CPC model, should lower the risk of entering Russia for UK companies.



Join the UK businesses seeing success in Russia with the adoption of Yandex advertising. For further information on the new CPA model or about any other advertising options with Yandex, please get in touch with Luke who will be happy to help.

[email protected] +44 (0) 20 7186 2109


Read the official release statement on the Yandex blog:


Members of Net Media Planet are Yandex Certified.