This week, Google announced a change to the way they rank ads.

The very short version is:

Our system for ordering ads on search results pages uses a calculation called Ad Rank. Previously, Ad Rank was calculated using your max CPC bid and your Quality Score. With this update, Ad Rank will also take into account a third component: the expected impact from your ad extensions and formats. In addition, we’ve increased the importance of Ad Rank in determining whether your ad is eligible to be displayed with extensions and formats.

(From Google’s Adwords Blog)

To get an idea of the impact, here are a number of useful articles and blogposts by PPC commentators. (Hint: part of the impact, as ever, will be to push organic rankings even further down the page)

If you only read one article, I suggest you start here:

#2: Google Made A Huge Change To Its Search Algorithm To Make Ads More Intrusive

#3: Google’s New Ad Rank Formula: Is the Change to Ad Rank Good or Bad for Small Businesses?