Increasing CPC increases Conversion Rate

I think there is a 'natural credibility' about being ranked higher

[tenerifejim]

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?

[Eurydice]

Google's economist Hal Varian said position and conversion rate are not correlated.

You can check this by using two metrics in the graph at the top of your Adwords panel.

Set the metrics to Avg. Pos. (average position) and Conversion Rate.

[LucidSW]

Conversion rates, unlike click rates, have a lesser correlation to position. However, the top positions generally are better. It will depend on your industry and is something to test. The real number you should look at is the product of CTR and conversion rate which will give you a sale per 10,000 impressions. I've found that it will be best in first position with lower CPS. But your situation might be different and in my experience, unusual, based on dozens of clients in different industries.

[RhinoFish]

the relationship sort of "works" in reverse...

it's not how high you get that improves (or degrades) your CR (I agree, there's no direct correlation), but rather how high you get your CR allows you to move up higher.

the move up comes from two sources - more profit to pump back into bids, plus better metrics that will reflect in your quality scores.

improving your ctr gets you eyes (and a bigger ppc spend) - doing that with a relatively poor CR just gets you into deeper trouble.

[tenerifejim]

Google's economist Hal Varian said position and conversion rate are not correlated.

Hmmm - the more I think about people's behaviour in terms of search the more I wonder about whether there is a correlation between position and the performance of the page to convert. Maybe based upon industry.

Specifically in terms of the type of "searcher" you are dealing with vs the term searched.

For example:

Case A: This searcher is less likely to refine-search - they are more likely to click adverts trusting Google to serve and then use the back button and work their way down the page until they find a page that specfically matches their requirements.

Case B: This searcher is may browse the results before then refining their search. May be only click the first or second results before refining the listing.

The questions are:
In an unrefined search is Case A or Case B more or less likely to find what they would like higher up the search results and (in theory) convert better (or worse) than further down the search?

How much does business vertical (e.g. travel versus tech) alter the 'Type' of search that the listing attracts? Does someone searching for "hotels", for example, show a different search behaviour to someone searching for "C++"?

I also wonder how much perceived "authority" Google itself conveys in terms of "user trust" to the results that are higher up? Does this has a relevance on how users treat the page? It's number one in Google, it must be good!

Added: I have the link Hal Varian's work here: [adwords.blogspot.com ]

[briggidere]

We have quite a few clients and we run conversion tracking on probably around 75%.

It's a case of testing and refining with everyone as each niche is different and everyone does better in different positions.

For most clients we found the best positions to be were around 3-5 in terms of cost/conversion and volume. Some clients did best in the top spots, so testing is vital.

If you are in the top positions you can get a lot more tire kickers, which increases volume & CPC and lowers conversion rate which skyrockets the cost/conversion.

The main thing to look into is, what is the acceptable cost/conversion and try to maximise the number of conversions you can get for less than this. I'd prefer to get a conversion at a high but acceptable cost rather than let one of the competitors get it.

[SanDiego Art]

I think if you are in the lead business, where a conversion is simply getting a form submission - it does differ from ecommerce b/c that person can "convert" on multiple sites - where there is only one shot at converting a buyer (they usually don't buy the same thing from multiple websites, but will fill out a lead form on multiple loan sites for example).

So being higher ranked in a lead business will help you get the conversions before the searcher tires from filling out forms. Who really wants to fill out a form 7-8 times by the time you go through all the PPC ads. So being at the top of the list SHOULD get you more conversions.

But the ranking doesn't affect ecommerce conversion as much b/c that searcher is concerned with a lot of other factors (price, shipping, delivery time, etc.) and only converts once...

[tenerifejim]

So being higher ranked in a lead business will help you get the conversions before the searcher tires from filling out forms. Who really wants to fill out a form 7-8 times by the time you go through all the PPC ads. So being at the top of the list SHOULD get you more conversions.

But the ranking doesn't affect ecommerce conversion as much b/c that searcher is concerned with a lot of other factors (price, shipping, delivery time, etc.) and only converts once...

I think there is probably a lot of sense in this - at least it explains what I have been seeing to me.

[wheel]

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).

Given what you've described, in a contact us situation, I'll tell you the single biggest factor in conversion. It's time until you call.

If you're working 'contact us' conversions, you should be set up to call these people in seconds. Not minutes. Not in half an hour. NOW. Get them while they're still at the computer, on your website. Drop everything and call them.

The increase in sales by decreasing the time to respond beats every other thing I can think of.