What's the best position to bid for on adwords?

3rd or 4th If you are looking for ROI. Go for 1st position if you are looking for only clicks. Choice is Yours.

 

Sorry - did I miss something there?

If cost per click is higher in higher positions, and conversion rate is the same, cost per conversion must be higher in higher positions?

Unless the average order value changes (for the same keyword, with the same advert text), then surely the ROI must be lower in higher positions?

In fact, unless the conversion rate is higher in higher positions, the ROI MUST be lower in higher positions, unless something funny happens to your conversion value.

But you don't want to chase ROI, you want to get as much money as possible from your campaign, and there's always a trade-off between traffic and ROI - better to get 100 clicks and make $1 from each, than get 10 clicks and make $2 from each. But you don't want 200 clicks, making $0.2 from each.

Hence my observations regarding finding the sweet-spot...

 

The answer for this question can only be found by testing yourself ... different markets work in different ways so there's no one universal answer.

Generic keywords I would stay away from higher positions based on them being typical words used at the begining of the buy proccess (the research stages) and unless you have the budget to burn are good for brand building and recognition rather than conversion (thought that's not the case in all markets).

 

I think lots of people have summed my thoughts up well here:

- It seems to depend on the market, what keywords you're using how specific they are, etc.
- There's a fine line between max ROI and max profits; the two don't always come from the same position.
- I've found for one of my campaigns that being in spot #1-2 got me great profits, while being in 4-5 got me pretty much 0 clicks, not to mention 0 profits. Why? It was a highly targeted keyword, and the competition all had the same exact phrasing for their ad title. I didn't split test to see if differentiating with a different title would work better, but competition with the same exact ad title can definitely negatively influence your payoff when you slip down a few ad positions. I entered a bit higher bid, and saw positive results in terms of CTR and sales.
- It depends on what you're promoting - is it a product directly? Is it a product review? Is it just a squeeze page?
- It depends on the ad copy. I could probably have the same exact keywords and write an ad copy that would do great in positions 4-6, with less clicks, CPC & sales, or do well in 1-2. with more clicks, higher CPC, but more sales.

For me overall, it's about max profits - how much can I consistently profit (not just gross).

-T

 

You are forgetting about CTR - a major factor in your click costs. The higher your position, the higher your CTR. In my campaigns it is often the case that I am in #1 at a lower cost per click than further down the page, because I am getting 50% CTR instead of 5% CTR.

In some ads I bid $20 but pay 0.01 per click, at #1.

 

Good summary. I agree it is all about profit... it's just getting the right formula to achieve the desired profit, which is not easy. Thanks.

 

Position 3 is best (5 at the lowest)

 

Use your conversion tracking...check what position you are usually in, go with that...for me generally, its 2-5

 

My theory is-

When I'm looking for something, I stop when I find it. If you have the first highly relevant ad on the page, being in a lower position shouldn't matter much. As far as conversions go- your landing page should be as relevant as the ad or most people will hit the back button and move on.

When it comes to competitive keywords where you're up against savvy marketers, your best bet would be to bid for a high ad position. Look at ringtones for example. Search for "50 Cent Ringtones" and you get a SERP where every organic result and every ad's headline exactly matches your search term. Most people will click on the first thing they see. The only way to differentiate your ad is to make it irrelevant; and with all the other relevant ads to choose from, yours will be ignored.

99% of the sponsored ads land on either a page with a list of carriers leading to offer pages, or directly on an offer page. If the person searching clicks an ad and signs up for ringtones, they're done. If not, they may go back and keep clicking, but by the time they get to your ad, they've seen every complimentary ringtone landing and offer page imaginable and they know that the 8pt font on the bottom of the page says $9.99 per month.

If your offer has less fierce competition, but still some competition, your strategy might be different. If I'm paying money for something online, I take the 10 minutes to shop around to find the best price and most professional/reputable website to buy from. In this case, you may rack up a lot of non converting clicks in the first positions and a lower one may convert a lot better. This is why it's good to have opt in pages and/or free information pages as lead ins. Because we're selling online and the old drive across town to your competitor is now just two clicks of a mouse, give people every reason not to leave your site.

 

So, you are saying that you pay a smaller cost per click to appear in position one than position ten??

That's certainly unusual, to put it mildly...

I was under the impression that Google take into account the position of the advert when calculating your Quality Score (and hence adjusting your required cost per click for a given position).

Not sure that I'd take your example as typical of Adwords in general, so I'd still recommend that people work under the general assumption that as a rule, you pay more in Adwords to appear in a higher position...

 

If your ad brings in good roi from 5 th or 6th position will you say no to that ? See its not that only when you are in 1st postion you ill get good roi, ad position is also one among the factors to get good roi and its not the only way to get good roi

 

enginez - you are saying that "In some ads I bid $20 but pay 0.01 per click, at #1.".... That's cool, but I guess you are the only one advertising for that keyword/ phrase!

Nice theory Jundoe0069... makes sense.

 

I agree with Enginez that a higher CTR will lower your bid price, but there are other factors. The reason google makes so much more money than other ppc engines is because of this formula.

You have to remember that organic results are in major competition with paid results. When a searcher clicks a paid ad, Google makes money. When they click organic, Google doesn't directly earn money from that click.

If someone bid $1.00 and their ad gets clicked 1% of the time, google makes $1.00 for every 100 times their ad shows.

If you bid .50 and your ad gets clicked 5% of the time, google makes $2.50 for every 100 times your ad shows.

Google would rather have your ad show at the top because your ad makes them 2.5 times the money as the other person's ad. Now this goes back to the competition between organic and paid. They know your ad is relevant to what most people who type that keyword are looking for because of your higher CTR. Because of this, they want to put you in a better position to compete with the organic results to make them even more money.

This all relates to my theory above. If you're the first relevant ad on the page, you will usually achieve a higher CTR than the less relative ads above you. This will eventually move your ad up the list without it costing you any more per click. If you're in a highly competitive market with highly relevant ads, it would be smart to bid for a higher position if you want a respectable CTR. As your CTR goes up or at least maintains a respectable percentage, your bid price will come down for that position because you will essentially be outbidding the person below you when it comes to the following formula:

Bid Price x CTR = Per Impression Earnings for Google for that ad position.

$1.00 bid x 1% CTR= Google makes 1 cent FROM THAT AD POSITION per impression for that keyword.

$0.50 bid x 5% CTR= Google makes 2.5 cents FROM THAT AD POSITION per impression for that keyword.

Google would rather make 2.5 cents per impression. They will do that until your daily budget runs out, then the next most profitable ad will show at the top spot.

If enginez has a 50% CTR and the top bidder is bidding $5.00 and has a .5% CTR, theoretically enginez could pay 5 or 6 cents for the top spot.

Like I said though, Google doesn't open their mouth about too much, so there are likely more factors involved. I would be willing to bet that the ad position is a factor in the way CTR's are weighted. If you have a high CTR in the number one spot, your CTR most likely doesn't affect your bid price/ position as much as if you had that same CTR in a lower position. If you're at a disadvantage (lower position) and you score the same CTR as someone in a higher position, your ad is more successful and therefore more profitable to Google.

The end.

 

So Jondoe0069, assuming one achieves a high CTR, from your experience what are the best profitable spots to aim for?

 

Not at all - we commonly have a full page of ads below us.

It's all in getting a much higher CTR than those below you, and a higher CTR than is average for #1. To achieve this you need a CTR of 30%+ - which means your ads have to really, really fit the needs of the searcher.

 

Some great advice on this thread. I'll see if I can give my take without being too redundant to what's already been written

I'd agree with what's been said along the lines of "you can't know until you test". That may seem like a "cop out" but it's the one true answer to give off the top.

Every time I try to set a guideline for "best position" I find cases that contradict it.
As an affiliate marketer, and seller of my own digital products, I work with a lot of different "niches".

And as much as I like trying to find patterns in things, I'd say "best position" is a tricky nut to crack, unless you're talking about just one particular niche/keyword combination.


As a general rule, I'm tempted to say that the higher you're paying per click the less you want to be at the top 2 positions. It's too much "blood letting" competing that high and paying so much for clicks - when a lot of the clickers are "clicky-loos" (adwords equivalent of "looky-loos" - people who just look around and never buy) who just do knee-jerk clicks on ads that are at the top

But with one of my best-performing ads I do better at the top (average position 1.1)
And I've tried all positions on it. If I go lower than position 2, my traffic gets anemic and I make very few sales.


A guideline that may be of more use:

I like to shoot for position 4 as my default, for new keywords, until I find how they perform.

And then play with going up or down, and see the "elasticity" between position and performance.
Or in regular speak: to try going up and/or down a little in position and see if you notice significant performance differences.

And don't get caught in the ROI trap, where you only care about ROI %
I've had keywords that have amazing ROI at a low position, but give infrequent sales (because only a thin trickle of traffic)

Sometimes you need to bite the bullet, bid higher, and get lower ROI in the name of more overall profit.

I don't even look at ROI %, except for low-level analysis.
The real number to look at is overall profit over time (whether by day, month, or whatever time range)

That gets to the real meat of what you want. Other measures are more like indicators.

Okay, I've gotten slightly off topic here. But hope this was helpful overall

-Darrell

AKA "The Adwords Mad Scientist"

 

i have heard that the top of the right hand column is the best which is usually position 3 or 4, depending on whether the blue box is there or how many ads are in it, as you say it is not always position 1

 

I'll give you the same advice everyone else gives for every question ever asked on this forum:

Test, Test, Test. Test some more. Don't stop testing.

I personally don't have much experience actually testing my campaigns besides just generally seeing how things perform, so I couldn't tell you which spot is most profitable. It really depends on what the customer is supposed to do when they get to your site. Enter an e mail address? Spend their hard earned money? Download something for free?

I've been reading a ton of forums, articles, blogs, and books on the subject over the past couple months. My last post is really what I've come away with from everything I've read, heard, and seen.

 

I generally aim for positions 3 or 4. However, this is because such positions are best for my personal circumstances. The optimal position is never cut in stone and will always depend not on a number of factors but every aspect of your campaign. Many questions have to be answered before you can decide which position is best for you.

I can say, however, that in most cases it is best to steer clear of Position 1, as you generally receive too many spontaneous clicks. Those who click through the number 1 ad still have at least a whole search page to investigate, in which case they are more likely to represent "lookers" and not buyers.

In other instances, such as if you were trying to build brand awareness, appearing in Position 1 would be in your best interest.

 

Some great advice on this thread indeed thanks to all the detailed responses & for your detailed response.

Sure teating plus more testing, but it does take a long time specially with lots of keywords.... so it's good to get your suggestions.

Makes sense specially regarding the spontaneous clicks that occur at position no. 1