What's the best position to bid for on adwords? Is it the 1st, 2nd, 5th, 10th... etc.? I've read that ROI is not necessiraly better with the highest position. Your thoughts?
It depends on the site/keyword, pretty much everything. You can't judge until you test. It is true though, I would say in general, the top positions do not always give the best ROI because there are many times bidding wars going on despite quality score. Depending on the industry, there are often times new advertisers coming in everyday who bid haphazardly to be on top. I have found the 4th position (first on the right) works pretty well, through testing, for one of my clients to get optimum ROI.
Just written a blog on this point (look for the blog on epiphanysolutions.co.uk if you are interested) Really, I have to agree with seostew - it depends on what your conversion rate, clickthrough rate and cost per click in each position in the results would be, your average order value (or income from lead) and margin on that money. And the cost of appearing in each position isn't really under your control, so if your competition are bidding silly amounts, you don't want to 'compete' with them. You're not really in competition with them anyway - it's about making as much money as you can (usually!)
ROI schmoi...that's only one factor. I would rather spend $75 and make $100 profit (133% ROI) than spend $25 and make $75 profit (300% ROI). For me, the best ROI is usually in positions #6-7 and the most profit is in position #3.
I do test, but it appears all over the place. I do notice some just bid crazy amounts to be in number 1 or number 2. Good pointers on your blog. Thanks. Good point & I have to agree about your profit theory. So you figure it is most profitable at 6 to 7th position. I might try that.
One of my ads is in #5 position, and it gets 90% of the sales it was getting in #1 position - because the competing ads are promoting something less focused on the search query. But in general, for very focused keywords, I find #1 is the best, if I can get it to show along the top - because the increased CTR means I am paying less per click than other positions.
I would say it depends on the market and no. of ads competing for a particular keyword. But on an average I have seen 3-4 position best for conversions and ROI.
I agree with GuyfromChicago because it all depends on person to person and their preferences as to which position would suit the best for their needs and requirements. There won't be a definite answer for that i guess.
I can't help but wonder if people who are just shopping around start with the top position ad then move downwards to 2nd, 3rd...etc., while serious people & those who don't have much time will click on the first ad that attracts them (starting from the top)! Any validity of this in the overall equation?
My experience (and from anecdotal evidence, most other people's - correct me if I'm wrong) is that the opposite is true. Conversion rates tend to be higher on lower search results.
Not sure you can really say one position is best for all circumstances. I run PPC campaigns for clients who are best served by being on the second page of Adwords results. It's really a combination of the keyword phrase (it's relevancy to the site), the competition and the budget. Testing is the key to really figuring out what is the best fit... Steve
"spend $25 and make $75 profit" means you spend $25 and earn $100, of which $75 is profit. That's 300% ROI.
As I say, my blog goes into more detail than I can here (see the blog on epiphanysolutions.co.uk). In summary, it depends on a number of factors. If the difference between the cost per click in different positions is small, the penalty for moving up the rankings is less, so it makes more sense, and the benefit of moving down the rankings is less. The difference in the clickthrough rates can be considered the companion to this - if you only get a handful more clicks for moving up, it probably won't justify paying more per click (for all of the clicks, including the one's you'd have got anyway). But the value of a conversion, the conversion rate and the margin (profit if you prefer) on a conversion are all key in calculating how much you can afford to pay for a click. If the cost of a click is higher than the profit, you're too high up the results, wherever you are! You have to find your own sweet spot, by a combination of maths and testing different bids In the long run, this'll pay off, even if it's a pain in the to begin with.
As it for me #3 gets 20ROI while #10 gets 4ROI But they convert the same... so I won't mind #10 ... it cost me half or 1/3 of #3 position.