Google has given AdWords advertisers a pretty awesome gift: new dynamic sitelinks, free of charge, for the top three ad positions. That means Google will automatically generate sitelinks for certain ads, and clicks on those dynamic sitelinks won’t cost you anything.
In their announcement this morning, Google said, "This is another example, like selling ratings, of AdWords tools adding value to your ads while saving time and simplifying campaign management." As with Enhanced Campaigns, Google is basically catering to smaller businesses who don’t have the time or expertise to set this stuff up themselves.
When Adoption Is Low, Google Forces Adoption
The big idea behind Enhanced Campaigns was to increase adoption of mobile advertising, since so many AdWords advertisers weren’t doing it on their own. The move to EC made all campaigns “mobile-friendly” by default.
This is a similar move – Google already updated the Ad Rank formula, one of the biggest AdWords changes in the past decade, to include expected performance of ad extensions in addition to Quality Score and max bid. Apparently, that wasn’t enough to get advertisers using site extensions in every campaign. So Google is taking matters into its own hands and making sure your ads have sitelinks if they rank at the top of the page. This ensures that they'll benefit from the improved CTR of sitelinks, even if advertisers are too lazy to implement sitelinks on their own.
The Loss Leader Effect: How Dynamic Sitelinks Improve CTR
Here’s the interesting thing about how sitelinks work: People aren't actually clicking very often on the sitelinks themselves; the typical CTR on a sitelink is just 0.1%.
However, the uplift in headline CTR for an ad with sitelinks is around 10%. For example, an ad in the top spot with an expected CTR of 6% would see a boost to 6.6% CTR with sitelinks enabled, simple because the ad takes up more space and is more noticeable.
That’s why Google is able to offer you dynamic sitelinks at no cost per click: Google isn't really losing anything by offering these free, as hardly anyone clicks on them. What they are doing is increasing the expected CTR of the top 3 ads across the board, which means more revenue for Google (and luckily, more clicks for you as well).
We know the use of ad extensions is important for that very reason – the improvement in expected CTR. That’s why they’re now part of the AdRank formula.
We're also finding that the higher CTR from using the sitelinks ad extension raises Quality Score by 10%, on average.
It's a smart move on their part, to make this automatic for all advertisers. We estimate that only 30% of small business advertisers (companies spending less than $5,000/month on AdWords) use sitelinks. It takes more work to set them up and a lot of advertisers still simply don't understand how or why to do it. With dynamic sitelinks, they don't need to understand it.
More Details on Dynamic Sitelinks
Dynamic sitelinks can appear to searchers on desktop, tablets and mobile with full internet browsers and look like this:
Your ads will be eligible for dynamic sitelinks so long as you have your campaign type set to "Search Network with Display" or "Search Network Only." Google adds: "If you've already set up your own sitelinks, those will always show, except for the few instances when the dynamic sitelink can perform better." (That “always” seems like a hedge, since it’s unclear how they’d determine whether your own sitelinks or their dynamic sitelinks perform better without running tests.)
The new dynamic sitelinks rolled out globally today and are available to all advertisers. If you decide to opt out of dynamic sitelinks on your ads, you can do so using this form (it also allows you to reinstate them later). We think chasing low CTRs is silly, though. If you're worried about getting more unqualified clicks, change your messaging and targeting.