Everybody wants to be on top.
Now that I’ve got your attention, let me qualify that: too many AdWords advertisers want to be in the first position of results either because of their egos or their enthusiasm to spend money without much thought about profitability.
There are a lot of good things about the first position of results. You will get the most traffic, and if your quality score clears the threshold for the keyword you’re bidding on, you’ll get that coveted premium positioning for “sponsored links” above the organic search results.
The two largest drawbacks about the first position are intertwined. The largest drawback is that first position will get you a lot of “looky-loo” clicks from people who are just frenetically clicking around without doing much decision making. The second problem, that first position is not usually the most profitable, is probably because the profitability of your click-stream is being diluted by those same “looky-loos”.
If you want profitability, go for the 7th position according to Adgooroo.com President Richard Stokes.
I have a bit of personal experience to backup Mr Stokes’s assertion, and quite a bit of real data, too, though I’m sure it is laughably dwarfed by what Adgooroo could show you. You can get your own data in Analytics if your AdWords and Analytics accounts are hooked up.
To see the conversion rate for each keyword based on its ad position, log into your Analytics account and go into the Traffic > AdWords section. From there click on Keyword Positions. You’ll see a list of your top keywords. If you click on one of those keywords, you’ll be shown a diagram of a Google search results page with the different ad positions.
It looks like this:
The default setting is to show visits, but if you have a goal set up (a goal is Analytics’s version of a conversion, so setting up a goal in Analytics means you’ve set up conversion tracking in Analytics), then you can see the stats for that by pulling down the menu on the far right. It would look like this:
Here’s a view close enough so that you can really read the percentages. Of course, your reports won’t have your keywords blurred out so no one can read them.
In this example, it looks like 6th position does best, though Top 1 and side 1 are serious contenders, too.
7th position is nice because its close to being at the bottom of the page, which means you can bid substantially less than you would if you were insisting on being at the top of the page. But 7th position is also just high enough to generally keep you on the first page (90% of searchers will never look at the 2nd page and beyond).
If you didn’t know already, your ad’s position will bounce around a little even on the same keyword. For every search, ad rank is re-calculated, and the AdWords system does not show everybody’s ad for every search. In fact, about 5% of the advertisers get half of the ad impressions. But that’s a topic for a different post (because its a doozy).
Returning to ad position, this Analytics data can be extremely helpful for managing bids. Its essential if you’re considering turning on Position Preferences. Please note that those “Top 1″ to “Top 4″ positions count in placement numbers, so you’ll need to translate the Analytics position results to reflect how the AdWords system counts positions. In other words, “Top 3″ in Analytics is position 3, and “Side 3″ in Analytics is position 7 in AdWords. I hate to say it, but if you remember that those Top 4 positions don’t always show, it gives you a good idea why you should be using this data as a guide, not the final word.
While all this data is actionable, don’t get too committed to it. I’ve adjusted bid prices to match this ad position conversion rate data many times, and while the Analytics report is an excellent guideline, don’t get crazy with it. Adjust the bids just a little in the direction that the ad position data suggests, then see how the performance changes. For example, say you’ve got a hot keyword that’s been mostly in position 6, and the Analytics data is telling you that its converts like crazy in position 2. Raise the bids up a bit, so your average position is now 3, then check the analytics data again. That beautiful position 2 conversion rate may be a little different after the bid change. It is not an exact science, and you’ll need to take notes and proceed carefully and not mess with any other parts of the system (ie don’t test adcopy while you’re doing this), or you might seriously mess up the performance.
Before I forget, there’s an interesting fact about quality score that’s related to ad position. Click-through rates tend to rise as an ad moves higher up in rank. And because quality score is so tightly paired to click-through rate, you might imagine that higher-positioned ads would automatically get a little quality score boost. Not so. Google considered this, and has adjusted the quality score algorithm to reflect ad position. So if you wanted to force a better quality score by bidding really high and getting those high CTRs that first position tends to deliver, think again.