tenerifejim - 3:15 pm on Feb 2, 2010 (gmt 0)
I actually noticed this phenomenom about two years ago but never wrote anything down, just played with it. I am sure others have noticed it too and maybe even written it here already.
Basically, I noticed that my conversion rates tended (but not always) to nudged up a little if I upped my CPC bid. I never did any big jumps in bidding and I alway made sure that there were no other potential factors (days of the week, etc.).
Just to clarify - I am talking about a conversion action which is a 'contact us' type request or a lead - not a purchase (which may be different).
All things being equal I figure that traffic gained 'higher up the serps' tends to convert better than the tail enders. Maybe those who have clicked the previous 3-4 results before they come to a landing page are more discerning and so don't bother.
In effect there is a different kind of traffic/ user behviour on your site depending upon where you appear in the results (which is more easy to monitor with adwords than with natural search as it is easier to control). Sometimes my conversation rate doubles if I am one or two places higher.
Sometimes my conversion COST is higher for a lower bid than it is with a higher one.
Anyone else with similar experiences?