Google improves the Adwords Ad Ranking formula
The Ad Rank (Ranking of ads), is the formula that Google uses to order sponsored ads when a user performs a search.
The ad with the highest Ad Rank will be the one with the first position, followed by the ad with the second highest Ad Rank, and so on.
A couple of days ago I found out thanks to a publication of Alan Daitch in the Adwords Community about some important changes that will be being made in the way of calculating the Ranking of the ads.
You can see the original article of the Adwords blog in English at the following link: Improving Ad Rank
What is Ad Rank?
The original Ad Rank formula takes into account only the Maximum CPC bid and the Quality Score of the ad.
By multiplying both values, you get the score that is used to determine the position of the ad.
Example:
Advertiser 1
Maximum CPC: $1
Quality Level: 8
Ad Rank: (1 x 8) = 8
Advertiser 2
Maximum CPC: $0.90
Quality Score: 10
Ad Rank: (0.90 x 10) = 9
In the above example, the Ad Rank of "Advertiser 2" is higher than the Ad Rank of "Advertiser 1", so your ad will have a better position.
What changes will take place in the Ad Rank?
From now on, when calculating the Ranking of the ads, a third component will come into play: The expected impact of the extensions of our ads.
In the event that two advertisers have the same Quality Score and Maximum CPC, the performance of their ad extensions will determine which of the ads will have a better position.
What factors of ad extensions will be taken into account?
1) CTR of ad extensions.
2) Relevance of extensions.
What can I expect from this change?
According to Google, advertisers with good performing ad extensions can expect improvements in their average CPC, however if our extensions perform poorly compared to the competition we may see an increase in our average CPC.
In the same way, in the original article it is mentioned that the Adwords system will determine the most effective combination of extensions for each ad, so our ads will be displayed with the extensions that the system considers most useful.
Why will these changes be made to Ad Rank?
The idea behind these changes is that Google will prioritize the positioning of the ads that provide as much information as possible, since they are usually more useful and relevant to users.
In the same way, Google will automatically decide which extensions to show according to the device the user uses and the location where they are.
For example, a user who is near your business and searches from a mobile device will likely see more ads with call extensions and location extensions.
To get the most out of this change, the ideal is to use all possible ad extensions according to our business objectives, in this way we will obtain better positions and users will see more useful ads.
