The Google update, unveiled on October 22, affects how the search engine determines the order of paid search ads. In addition to maximum bid and quality score, Ad Rank now includes a third variable: the expected impact of ad extensions. These extensions add various functionalities to basic text search ads, including geographic locations, social annotations (Google+ followers), ratings, and direct app downloads.
According to The Search Agency's analysis, since the update impressions and clicks have increased 6% and 5%, respectively, for advertisements with ad extensions, whereas impressions and clicks have decreased 6% and 1%, respectively, for paid search ads overall.
The average click-through rate (CTR) has declined slightly for ads with extensions, but average page position has improved 4% and cost-per-click (CPC) has gotten better, dropping 5%.
The Search Agency also looked at the impact of the update on specific types of ad extensions. With the exception of application extensions, clicks for all formats increased after the change became active.
Specifically, location extensions and review extensions appear to be favored by the revised formula.
About the research: The report was based on impression, click, CTR, CPC, and average position data collected in the two weeks following the Ad Rank changes, which were implemented on October 22, 2013.