This week, Google released a new video outlining the Advertising Auction, which discusses in detail the factors that determine Ad Rank (the value that determines what position your ad is shown). The information in the video isn’t new, so why is this news? Well, it’s the first time since 2009 that Google has released a video discussing how Ad Extensions factor into Quality Score, and Google is actually openly discussing what determines Ad Rank. Granted, it is not a secret to Advertisers about which factors go into determining Ad Rank, but it has historically been something that wasn’t discussed so candidly
In the 8–minute video, Google Chief Economist Hal Varian discusses Ad Formats, such as Sitelinkes and Call Extensions, and the impact they have in determining Ad Rank. Varian also explains how, even with a lower bid, your ad can be in the first position because your Ad Rank is higher than the next highest advertiser. Not only can Ad Rank affect your position, Varian also talks about how ad quality impacts price, explaining that a quality ad format cannot only improve your Ad Rank, but also lower your Cost Per Click.
This new video is not only helpful for current advertisers, but first time advertisers should take note, as well.