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1 smart. uncommon. ideas.

2 EXECUTIVE OVERVIEW In October 2009, Google introduced a new beta feature in AdWords called ad extensions, which allows major advertisers to display additional links - up to four - in their paid search ads. The links serve as multiple points of entry to websites, giving users one click access to more relevant content, products, and services. For advertisers, the added real estate in search results increases exposure, legitimacy, and conversion rates without any additional costs. Essentially, it s five links for the price of one. Brands with multiple product lines and target demographics, such as Sony, Mitsubishi, Honda, Amazon, and the like, will benefit most from ad extensions. In addition to customer segmentation and streamlining the sales funnel, they can also eliminate sibling competition for brand terms between business units that typically surface during paid search campaigns.

3 Qualifications Solidify your brand as a category leader. With potentially twice the real estate and four times as many links presented above the fold in search results, ad extensions provide an effective method for an advertiser to solidify itself as a category leader for brand terms. As a result, the feature is currently reserved for only high profile clients of Google AdWords. More specifically, the prerequisites of ad extensions are as follows: Your ad is in the first position above search results. Your ad is dominant, with a substantially higher click through rate (CTR) than any other ad on the search results page (no hard numbers have been released defining dominant, but ads with a 10% CTR have been successful in implementing ad extensions during research). Your URLs (a.k.a. ad extensions) direct users to pages within your main website and allow them to navigate freely. Implementation Let the data guide you. Implementing ad extensions is a short but detail oriented process. As an advertiser, you should carefully research and identify key landing pages, as well as create appropriate titles for each, which will appear as the additional links in your paid search ads. To narrow down your list, analyze merchandise popularity, conversion rates, and customer demographics. Google s system allows you to add up to 10 links in your queue, but only the top four will appear. Unfortunately, due to limitations, the system cannot rotate links automatically. Google representatives have promised system upgrades, which could potentially optimize your campaign by eliminating the links that perform poorly. However, no improvements have been made at the time of this writing. As such, link testing - manually alternating links based on aggregate data - is the responsibility of the advertiser. Moreover, the AdWords system lacks internal reporting capabilities, meaning each landing page URL must also be coded in order to produce custom analytics. Once your campaign is up and running, test ads with lower CTRs as ranked by Google. This will help identify the threshold for dominant campaigns and improve optimization. Within those remaining campaigns, research multiple keywords based on the type of queries they receive. Case Study Oakley s success story. Abridged. In the weeks following the implementation of ad extensions, Oakley s main branded campaign generated a 14% increase in CTR and a slight increase in conversion rate. The increase in CTR can likely be traced to a combination of the additional real estate in search results and the multiple opportunities to appeal to what the searcher is looking for.

4 While the main link still attracted a substantial majority of the visitors, users clicking on the ad extensions converted more often. This can likely be attributed to ad extensions unique ability to move users through the sales funnel more quickly. The breakdown of where users clicked on the ad can be seen in the chart below. It is interesting to note that while a 14% increase was seen in overall CTR of the campaign, only about 6.5% of those clicking on the ad clicked on the ad extensions themselves. Takeaways Exposure. Legitimacy. Conversions. If implemented and managed properly, ad extensions can increase exposure, legitimacy, and conversion rates of your brand at no additional cost. The AdWords feature is particularly effective if you offer multiple product lines, are targeting different demographics, and are trying to eliminate sibling competition for brand terms between business units. For example, if you re targeting three audiences - men, women, and bargain hunters - directing them to a landing page with relevant content will generate a higher conversion rate than simply linking them to the home page of your website. Ad extensions can act as visual cues to shoppers as well, reminding them that your brand offers the product or service that they re searching for. Similarly, your ad can increase awareness of relatively unknown products or services. At the time of this writing, Google hasn t announced any long term plans for the ad extensions program or how advertisers can determine if they qualify. However, following a full scale launch, you can attempt to enable this feature through your AdWords account. Simply log in, select the campaign with the highest CTR, click on Settings, and then click on Network, Devices, and Extensions. If you re eligible, you should see an ad extensions label on the page with an Edit button nearby.

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