Can ad extensions increase CPC?

Yes, ad extensions can increase your Cost-Per-Click (CPC) in some cases, but they don't directly increase the base cost. Here's why:

Increased Visibility and Click-Through Rate (CTR): Ad extensions generally enhance the visibility of your ads and can increase your CTR because they provide more information or options to users (like sitelinks, callouts, structured snippets, etc.). This can lead to higher competition for your ad, and consequently, higher CPCs. If your ad is getting more clicks due to the extension, Google's auction may raise the CPC to reflect the higher demand.

Better Quality Score: Ad extensions can also improve your Quality Score, which is a component of how Google determines your CPC. If your CTR improves with ad extensions, this can improve your Quality Score and potentially reduce your CPC in the long run. However, if the increased visibility leads to a higher cost-per-click in the short term (due to competition), the overall impact might vary.

Ad Auction Dynamics: When multiple advertisers use ad extensions, it can make your ad more competitive in the auction, which could influence your CPC. More extensive ad formats might cost more due to increased demand.

In summary, while ad extensions can sometimes increase CPC by attracting more clicks, they tend to improve the overall performance of the campaign by increasing engagement and potentially improving Quality Score, which can lead to a better ROI.