Google Updates AdWords Ad Rank Formula: Top Ads Receive Ad Extension Priority

It has been confirmed: Google made an update to AdWords Ad Rank formula, extensions, and bidding on April 4, 2016. This affects:

  • Where your ads show
  • How your ads show
  • Your cost per click

Ads in lower positions will no longer show more extensions than an ad above it. The most prominence will now go to the top ad. Here’s an example showing the change:

google adwords ad rank formula update affects ad extensions

Advertisers in lower positions used to be able to show more extensions than higher ranking ads. Now, ads will no longer be able to show more extensions than one that ranks higher.

Ads in lower positions are limited to the total number of extensions they can show. This gives more prominence to advertisers in the top position.

An ad’s prominence can affect its cost per click. “The cost of incremental clicks from ad formats changes dynamically based on the total amount of prominence your ad receives,” according to Google. “Ad formats” is the name being used to refer to the collection of extensions that show alongside text ads on the search network. This includes dynamic extensions.

Shopping ads are not considered part of ad formats.

How your ad formats are displayed may change over time. “Google will continue to show your highest performing and most useful combination of ad formats that are eligible.”

Your ad’s CTR will be a key factor. “Prominence is primarily measured by the average change in clickthrough rates (CTR) from adding ad formats or moving to a higher position. The unique value of other interactions, such as a call from a click-to-call ad, can also contribute to prominence.” Google will consider your ad’s visibility on the page alongside the number of interactions it receives.

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