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how does ad position effect your conv. Rate?

Discussion in 'Google AdWords' started by guyroz, Aug 5, 2010.

  1. #1
    Hey there
    I am trying to figure out how does the ad position influence my conv. rate.
    I read a lot of articles that claim that the ideal spot is 3-4.
    what do think? which position is the best in your campaigns?
    SEMrush
    another question on this subject - how do you test which ad position gives you the best result?

    thanx :cool:
     
    guyroz, Aug 5, 2010 IP
    SEMrush
  2. Lucid Web Marketing

    Lucid Web Marketing Well-Known Member

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    #2
    First, let's get definitions down. You say conversion rate but I have the feeling you may mean the click rate.

    The click rate (click through rate or CTR) is the percentage of times people click on your ads.

    The conversion rate is the percentage of visitors to your site perform the desire action. Usually, this is a sale but could be anything really: downloading a free report, signing up to a newsletter or anything else you want to track for whatever reason.

    How does position affect the CTR? As with organic listings, the higher up you are, the more people click on your ad, percentage wise. Simple as that. There may be blips here and there or in some industries the top two or three positions not as good but generally, you want to be at the top to maximize your clicks.

    How does position affect the conversion rate? You would think that conversion rate should be fairly steady but it's not.

    My data shows the highest conversion rates in the first position. This data is for all my clients since 2006 that track conversions (quantifiable online preferred response). I'm talking over 6.7 million clicks here and almost 44,000 conversions in all kinds of industries so the data is significant.

    Here's the top three positions and their conversion rates: 2.00, 1.68, 1.00. It goes down from there, not gradually but by the 10th position, the rate is only 0.24%. The second page (positions 13 to 20) are fairly equal but only about half of that, hovering around 0.12%.

    Why is that? I really don't know. I have noticed a trend however. The data since 2009 shows no deviation except for lower rates (recession?) and a bigger drop-off in the third position. The rates are 1.81, 1.49 and 0.76. The 10th shows 0.49%, twice the historical value.

    This year so far shows a far different picture. The positions for which there is statistically enough data vary from 3.76% in 3rd to 2.90% in 5th. The top two are 3.06 and 3.19%. The 7th position has a 4.41% rate but there is not enough conversions and clicks to make this valid, even less so in 10th with a 6.52% rate.

    It doesn't mean that a certain position is better. If you calculate the sales per visitor (multiply click rate by conversion rate), the first position always comes out on top, and not just by a little bit. Historically, my data shows 5.64 conversions per 10,000 impressions in first and 4.91 in second. In 2009, 3.50 and 2.74. For 2008, 9.23 and 5.92. This year so far, 8.31 and 5.93 then 6.87, 7.06 and 5.59. And the CPC is lower too in first place by quite a few cents.

    The conclusion is that you want to be on top. That's where you maximize your sales although 2010 is showing a change in behavior and needs to be tracked longer term.

    The data is somewhat muddled from a lot of clients and many factors. But a long-time client shows the same thing: an overall increase in conversion rates in all positions but the first three positions is where you want to be to maximize sales and profits.First, let's get definitions down. You say conversion rate but I have the feeling you may mean the click rate.

    The click rate (click through rate or CTR) is the percentage of times people click on your ads.

    The conversion rate is the percentage of visitors to your site perform the desire action. Usually, this is a sale but could be anything really: downloading a free report, signing up to a newsletter or anything else you want to track for whatever reason.

    How does position affect the CTR? As with organic listings, the higher up you are, the more people click on your ad, percentage wise. Simple as that. There may be blips here and there or in some industries the top two or three positions not as good but generally, you want to be at the top to maximize your clicks.

    How does position affect the conversion rate? You would think that conversion rate should be fairly steady but it's not.

    My data shows the highest conversion rates in the first position. This data is for all my clients since 2006 that track conversions (quantifiable online preferred response). I'm talking over 6.7 million clicks here and almost 44,000 conversions in all kinds of industries so the data is significant.

    Here's the top three positions and their conversion rates: 2.00, 1.68, 1.00. It goes down from there, not gradually but by the 10th position, the rate is only 0.24%. The second page (positions 13 to 20) are fairly equal but only about half of that, hovering around 0.12%.

    Why is that? I really don't know. I have noticed a trend however. The data since 2009 shows no deviation except for lower rates (recession?) and a bigger drop-off in the third position. The rates are 1.81, 1.49 and 0.76. The 10th shows 0.49%, twice the historical value.

    This year so far shows a far different picture. The positions for which there is statistically enough data vary from 3.76% in 3rd to 2.90% in 5th. The top two are 3.06 and 3.19%. The 7th position has a 4.41% rate but there is not enough conversions and clicks to make this valid, even less so in 10th with a 6.52% rate.

    It doesn't mean that a certain position is better. If you calculate the sales per visitor (multiply click rate by conversion rate), the first position always comes out on top, and not just by a little bit. Historically, my data shows 5.64 conversions per 10,000 impressions in first and 4.91 in second. In 2009, 3.50 and 2.74. For 2008, 9.23 and 5.92. This year so far, 8.31 and 5.93 then 6.87, 7.06 and 5.59. And the CPC is lower too in first place by quite a few cents.

    The conclusion is that you want to be on top. That's where you maximize your sales although 2010 is showing a change in behavior and needs to be tracked longer term.

    The data is somewhat muddled from a lot of clients and many factors. But a long-time client shows the same thing: an overall increase in conversion rates in all positions but the first three positions is where you want to be to maximize sales and profits.
     
    Lucid Web Marketing, Aug 5, 2010 IP
    manish.chauhan likes this.
  3. pushkin

    pushkin Peon

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    #3
    It's really a difficult question to answer. Pretty much you have to test different positions. Try running your ads in the 3-4 position and see how your conversion rates go. After that, place your ads on the first position and test that way. At the end, compare both test and see which gave the higher conversion rate. Good Luck!!
     
    pushkin, Aug 5, 2010 IP
  4. manish.chauhan

    manish.chauhan Well-Known Member

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    #4
    Thanks Lucid for this great explanation. However, don't you think top position would also attract unnecessary traffic on broad match keywords since everyone who search over Google generally clicks on the first result and hence would increase the overall budget.
     
    manish.chauhan, Aug 6, 2010 IP
  5. Lucid Web Marketing

    Lucid Web Marketing Well-Known Member

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    #5
    Limit your use of broad-matched keywords. In fact, I avoid them like the plague. Only 16% of my impressions fire on broad matches.

    Besides, the stats don't lie. Here's one more for you: sales per 10k impressions in first position this year, on broad=8.84, on exact=14.13. So yes, you're right but also why you need to be very careful with broad. However, even with broad, first is where you want to be.
     
    Lucid Web Marketing, Aug 6, 2010 IP
  6. guyroz

    guyroz Peon

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    #6
    Hey Lucid
    I was asking about conversion rate so thanx for the answer

    I am trying to find out how I can check the stats in my campaigns
    I mean how do you check the conv. rate for a specific ad position across the campaign or campaigns?

    thanx
     
    guyroz, Aug 8, 2010 IP
  7. Lucid Web Marketing

    Lucid Web Marketing Well-Known Member

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    #7
    You cannot check any stat by position in the Adwords interface itself. You have to do what I do: download daily reports (one record for each ad-keyword for each day) and use a database program to compile the data. It's not perfect since the position is reported as x.x for all impressions for that day but it's the best you can do. Unless you have hundreds or thousands of impressions per day for a keyword where an average position of 6.5 could mean ads appeared anywhere between the first and twelfth, aggregating by position will be good enough.

    Looking at your data in many different ways is key to optimizing your campaigns. The interface just gives an overview and is inadquate. So you need a good tool to do your own reporting. For example, how are your campaigns doing on weekends? The interface can't give you the answer easily or quickly. A good tool will in a matter of seconds.
     
    Lucid Web Marketing, Aug 8, 2010 IP
  8. Technosmart

    Technosmart Banned

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    #8
    Get and use rich keywords
     
    Technosmart, Aug 8, 2010 IP
  9. premshanks

    premshanks Peon

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    #9
    For me, only the product/content of your landing page affect your conv rate and not the ad position.

    But ad position has defn., increase probability of sales if your product is good
     
    premshanks, Aug 9, 2010 IP