Google is changing things up all over the digital marketing landscape. While PPC remained unscathed in the massive Hummingbird update, Google wasn’t going to let the paid search component get away with business as usual. Google’s new AdRank ad algorithm is changing the way it determines where PPC ads are placed.

Extensions Now Influence Placement

Before the change, ad placement relied on just two influencing factors: the Quality Score and the Max CPC bid. But now, Ad Extensions are playing a role in determining where your ads will end up. And that means that for any novice PPC advertisers who weren’t taking advantage of Extensions, now is the time to start.

This change is one of the most significant changes since the AdWords platform was introduced, making it comparable to Hummingbird in terms of earth-shattering news. But how exactly will Extensions influence position? It comes into play, primarily, when two ads are pretty much equal in terms of Quality Score and Max CPC bid. In this case, the ad that has the most positive expected impact from its Extensions will receive the premier placement.

Extensions make ads larger and more prominent, which makes them more visible to searchers. In theory, Google makes money not from its organic results, but from ad revenue. So while it’s making efforts to improve the quality and relevance of organic results, it’s in some ways hurting its own revenue potential. To counteract this potential effect, Google came up with a strategy to encourage the use of ad extensions – creating more robust, attractive and eye-catching ads that can compete with those super-relevant organic results.

You Should be Using Extensions Anyway

Most PPC experts have been encouraging their clients to use Extensions anyway. They have a proven ability to increase click-through rates, although they only appear when the ad is placed in the top two positions. It’s just short of an all-out mandate to use Extensions – there’s still no hard and fast rule that advertisers must use them, but it certainly doesn’t make any sense not to now that they’ll make the difference between ads having premier placement or so-so exposure that won’t produce results. Even if your Quality Score and Max CPC bid are fantastic, advertisers could lose valuable placement by not having Extensions.

Extensions can enhance your ads in multiple ways. Sitelinks, for instance, allows you to include links to specific pages on your site in addition to the primary landing page. This can direct users to other content assets that generate leads or encourage social sharing – both of which benefit your business. Image extensions let you add a visual to ads, making them more eye-catching to searchers and more likely to be clicked.

Ads and Components Have Circular Influence

Extensions as a whole increase click-through rates, which also boosts your Quality Score. Much like the whole realm of online marketing is becoming more cross-dependent on a variety of marketing channels, your PPC success is influenced by a number of factors – each of which carry some weight in influencing the others and your overall success.

Using Extensions means more clicks, more clicks means a better Quality Score, and the combination of a better Quality Score and the use of valuable Extensions means better placement, circling back around to an even higher CTR, more conversions, more leads, and more sales. It’s a success formula that can’t be beat.

Will the New AdRank Mean More Competition?

It’s not all good news for PPC advertisers, however. With Ad Extensions primarily serving as a tie-breaker between two ads of identical quality, one advertiser can outweigh another by having a higher Quality Score or Max CPC bid. It’s tougher to influence your Quality Score as a short-term tactic, so brands with the budget to do so may use increased Max CPC bids to try to edge-out the competition.

This, of course, could lead to bidding wars which would drive up the overall cost of PPC and possibly price out smaller competitors. Still, Google claims it could lower CPC costs for advertisers with super-relevant extensions and formats – but acknowledges the potential for higher costs when it comes to competitors with higher anticipated impacts from Extensions.

Overall, the trend continues on the same path: Google is pushing the envelope for brands, making it necessary to be thoroughly educated on the latest changes and tactics and continuing to place a heavy emphasis on quality.

Extensions don’t add to your CPC costs, so there’s really no excuse not to use them. If you’ve already been using Extensions, you have a bit of an advantage because you can tap into your performance metrics to further optimize them – putting you one step ahead of the competition in terms of knowing which Extensions will have the most impact. And most importantly, place an emphasis on offering value to the searcher.

Source by Nicholas Silver