Adword Conversion by Position of Ad

Has anybody done a study

[lgn1]

In theory people who search past the first few pages, are looking for something specific, and are motivated to buy.

So in theory, the deeper your adwords is buried (page 2, 3 and beyond), the greater the conversion rate for targeted search terms.

Of course, you will get less impressions on the deeper you go, so its always a balancing game.

Has a study ever done to see the rate of adword conversion, in relation to position placment ?

[ZenArcher]

If you have Google Analytics set up on your site, then you can access a graphic chart of the position placement for each keyword and the number of clicks for various positions.

For me, it does seem to validate the common belief that ranking 4-8 usually gives an optimal ROI (YMMV).

[CPAguy]

hello lgn1, we have tried to do a statistical analysis of impact on conversion rate of position, and it is difficult to get good data for the following reason: poorly converting keywords naturally fall in in ranking because their bids are taken down, so the proper way to do a study would be to take the SAME keywords and see how they perform in the no. 1 position, then no. 2, no. 3. You would need a large sample to be able to get statistically significant data, and all of this would have to be controlled in the context of changing competitive situation, seasonal conv. rates, or other factors that impact conversion rates over time. With that being said, I think there is some evidence that the conv. rate is actually higher in the no. 2 position than 1, and then falls off a bit after no. 2. There may be a better way to do this and we are thinking through that right now. anyone have any suggestions?

[avalon37]

For strictly best conversion, position 2 or 3. Best profitability - so many factors, but the biggest being the CPC prices. Also also conversion varies greatly on the type of product, but let's say you the user is looking to buy a Madonna cd. The click on the first horizontal paid ad and see that the price is $11.99, they click on the 2nd ad and the price is $11.77, they might click on the the 3rd top paid ad (assuming there is one) and I guarantee you that the price is within a $0.25 and that potential buyer will stop looking and probably purchase from #3.

I've tested this many, many times in the last 6 years. Now, the hard part is that just because you know what position converts the best, unfortunately you have little control over where your ads will actually be displayed. Not just CPC as the main factor; I always want to be #2 or 3 for my clients, but frequently find them at #1 due to such a high CTR.

[JChang]

"I've tested this many, many times in the last 6 years. Now, the hard part is that just because you know what position converts the best, unfortunately you have little control over where your ads will actually be displayed. Not just CPC as the main factor; I always want to be #2 or 3 for my clients, but frequently find them at #1 due to such a high CTR. "
but thats exactly what position preference was created for :)

[avalon37]

JChang are you being sarcastic? Hard to tell, but I'm thinking you are. Position preference - what a failure that concept was/is.

[eWhisper]

Here's another thread about conversion rates by position:
[webmasterworld.com...]

I see large fluctuations of best conversion rate by position depending on the business type (and some other factors).

Using a combination of Google analytics and position preference; you can come up with some nice combos.

If you have offline conversions, make sure you are factoring those into the equation.

[netmeg]

I have some clients who seem to convert much better in the #3-5 position (plus the cpc's are MUCH lower there)

I have others who only do well in #1-3.

And I have a very few clients who are bidding with their ego, and insist on being #1-3 no matter what, so that I can't test other positions. I try to convince them, but in the end, it's their money.

[PPC Consultant]

It is all about the specific KWs. Some well do well up on top, some will do great in the middle, some at the bottom.

The KW position in my accounts are nothing more than a statistical fact. Unless you are using adwords for branding, you should always bid based on ROI - meaning, at what CPC am I getting the best conversion rate that drives most profit.

If they want to be in a position just to be there, they are either "branding" or have way too much money in their marketing budget without return on investment accountability and should donate some to me. :)

[briggidere]

I see what you're saying ppc consultant, but we have a lot of clients who don't care about ROI.

If they are only spending $5 a day to get 50% conversion rate and 300% markup, it's not good for them, even though the ROI is good.

They want volume. ROI can suffer as long as sales are going through. They would rather spend $1000 daily and get a 50% markup on the campaign.

Spend money to make it, that's what it comes down to.

The only thing to do is test, test, test and measure everything. (Then do, what most people don't do - take action on the results)

[mfair]

I completely agree with PPC Consultant. Almost all of my bidding is based on calculations that take into account the keyword performance history, the statistical significance of said history, and the desired target CPA.

However, in a couple of campaigns that I've recently taken over there is little good history, and the history that we have is very low volume due to the keyword having been started in a very low position. I've been experimenting with moving these keywords up into the number 1-3 position mainly to build a better history from which to make optimizations from, but also to see if their fairly decent conversion rates stick with the increased volume that comes with pos. 1-3. So far, the results are promising. Thus proving that whilst formulas can be used much of the time to optimize bids, the human element of reviewing search campaigns is still valuable.

[briggidere]

mfair, for building the account history, you don't need to get the ads in a high position necessarily. The way it works is, they look at the ad position & what CTR is average for that position, for the specific keyword.

Lets say the average is 5% for No1 and 1% for No5

If you are at No1 and have a CTR of 4%, the ad is under performing, but if you are at position 5 and a CTR of 2.5% your ad is performing better than the average for this term, so the latter is better for building the account history.

It's not only CTR, but CTR in relation to position.