So, as you’ve all seen Google has increased the size of text ad space by 50%! This is one of the biggest fundamental changes to adwords in over 15 years. But what does it actually mean for performance?

The BETA only access to using Expanded text ads ended on the last few days of July where the option to create the new format went mainstream across all accounts. Luckily for us we had 10 accounts already using the new ad size for 3 weeks to gain some valuable insights and develop methods of creating these quickly. As a result we managed to roll out 120,000 ads across, over 200 accounts in just 3 days! With the new URL paths, second headline and combined description line this is no mean feat.

If you’ve forgotten the difference in the two here’s a quick recap:

Old:

New:

It’s clear the added text and space taken on the search engine page results is significant however what does that actually mean for performance? Is the change actually benefiting you and your account? Are we seeing higher click through rates and lower CPAs as a result? Because at the end of the day, individually, that’s all we are interested in right?

The Results….

Well, we’ve compared the past three weeks of expanded ads vs text ads across all of our accounts and the results may surprise you.

Key observations:

As you can see we have rolled the new ads out alongside existing to show approximately 20% of the time to ensure the old top performing ads don’t stop serving. However it’s already clear that:

The Good:

• Expanded text ads run at a much higher CTR jumping from 1.27% to 1.98%. This is a massive 50% improvement!
• As the click through rate improves so must the quality score and the Average CPCs have fallen 2p on average across the board. Whilst only 1-2% drop this can be significant for accounts with high levels of traffic.

The Bad:

• Despite a drop in CPC’s the conversion rate has actually dropped significantly by 18%.
• As a result the CPA on average has risen by £4.24 or equivalent to 19.5% despite CPC’s dropping.

And The Conclusion Is…

Sadly, the end result highlights the Expanded ads so far are performing WORSE than text ads. The improvements to CTR and CPC are well overshadowed by the fall in conversion rates and increase in cost per acquisition.
Now we do of course have to consider that the ever changing customer journey is becoming more and more complex due to cross device and multiple session buying which makes direct conversion and CPA metrics not quite the crystal clear KPI it once was. However the size of the shift is very significant at nearly 20% on both metrics so we have to take this seriously.

So, should we just continue using standard ads to avoid the risk of any decline in results?

The answer to that is NO.

On the 26th of October 2016 we will no longer be able to amend any standard text ads. Shortly after this there will be a period of discontinuation where they will be removed and we will have to shift to the new format. So we can’t just ignore the change.

However we can start migration slowly. As mentioned earlier we have not just flicked the switch and moved everything over. We are running expanded ads alongside our top performing text ads on an even rotation. This will allow them to generate history and a good quality score through higher CTRs whilst running our top performing ads. This

1. Reduces Risk
2. Ensures when we do have to switch over we have ads with several months of history and real progress through running split tests on the new format.

Don’t forget we will be fine tuning these ads and testing different messaging with the new size allowances so these figures will improve.

It’s also likely because these ads are so big they are generating ‘interest clicks’ for curious searches too which will slow down. As they become the norm we will be in a much better position to pre qualify clickers. Let’s not forget we will have 50% more content space so with the additional, more specific messaging we will be able to stop someone whom is likely not interested in our product/service and encourage and give more info to those that are. So by October 26th we will of had enough testing time to be saving on wastage and generate the best customers/searchers possible through constant optimisation.

So yes, there may be slight dips now. But there will be improvements. As the saying goes, ‘The early bird catches the worm’ and this shouldn’t  be any different….

 

Charlie