Paid Search Marketing

What's the Best Ad Position in PPC? (Hint: Not Always #1)

By Billy McCaffrey April 10, 2013 Posted In: Paid Search Marketing Comments: 5

#1 Is the Best Ad Position! … Or Is It?

Best Ad PositionA common assumption about paid search is that position #1 is the ultimate goal. Advertisers clamber over each other to ensure their ads make it into the top position, because they think that’s what’s necessary to be successful for their campaigns.

However, I’d like to go on the record and make a bold statement: Position #1 isn’t always going to be the best ad position for your business. Yes, while position #1 certainly can’t hurt from an impression/visibility standpoint, it might not be the optimal position from a conversion/ROI standpoint. Google’s bid auction ensures that the higher you bid, the more likely you are to appear in a higher position. (Notice I said more likely, not guaranteed – the Quality Score system offers discounts for relevance.) But, are you bidding (and ultimately paying) too much to appear in those premium positions? It’s possible. That’s why shooting for position #1 isn’t always the best strategy.

If your business is a mom and pop store selling hardware supplies, and your competition is a big corporation like Home Depot or Lowe’s, chances are they have a much larger wallet and can easily bid as high as you without even breaking a sweat. You don’t want to exhaust your budget trying to compete with the big kids – you’ll never turn a profit!

Just because your ads aren’t appearing in position #1, doesn’t mean they aren’t being clicked on or that potential customers aren’t coming to your website and considering your products or services. Remember that the top of the search results page contains three ad positions, so even if your ads have an average position of 2 or 3, your ads will more than likely receive clicks and you will generate website traffic. Even if your ads appear in position 4 or 5, they will still be close to the top of the search results page; on the side of the search results page. So there is a solid chance your ads will be seen. People using paid search are typically in more of a research stage, so they are probably going to click on more than one ad before making any serious purchase decisions.

(More: When Is 2% Not a Good CTR? The Relationship of Click-Through Rate & Ad Position)

Something else to keep in mind is the industry that you are advertising in. The more competitive the industry, the more expensive the clicks will be (think of the insurance or legal industry). This goes back to my point just above about shopping around. You can feel pretty confident that if your ads are in positions 3, 4, or even 5 in a competitive industry, they will be clicked on.

Ultimately, it comes down to maintaining and hopefully growing your profitability. You don’t want to bid too much, to the point where your ROI is being negatively affected. Only you know where that line is though. It’s important to play around with positioning. If your ads are in a position that is providing profitability, but you still have some budget to spare, try increasing your bids a bit to land in a higher position. Conversely, if you can spend more, but are not seeing the desired ROI, trying decreasing your max CPC bids.

If you are unsure how much to adjust your max CPC bids by, start with 25%. As with any change in paid search, the adjustment should be relatively small, for the sake of monitoring; this applies for bid adjustments as well. Something else to keep in mind is that you can view the first page bid estimate and the top of page bid estimate for each of your keywords. This will also give you an idea as to how much you need to bid for your ads to appear in the desired position of the search results page.

It all comes down to defining the point at which you will become profitable or not.

AdWords Performance Grader




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Comments

Wednesday April 10, 2013

Kristi (not verified) Said:

Do you have any blog posts that shed a little light on the position as it relates to Top vs Side? Or what do they call it now? 'Other'? 

You can bid for a #2 spot but in reality if you have a lower bid, instead of showing in the #2 spot on the top of the results, you are showing at #4, or #2 on the side which is really low down. 

Friday April 12, 2013

Matt (not verified) Said:

Hi Kristi, I wasn't able to find another WS blog post that specifically answers your question, but here's one that might help guide you in the right direction.  

http://www.wordstream.com/blog/ws/2013/02/22/click-through-rate-by-ad-position

I usually pay close attention to CTR as it relates to ROAS.  If CTR is high and conversions are coming through I'm not overly concerned with Ad Rank.  I might experiment with a bid increase or changing ad copy (improve QS) to see if ranking a bit higher will improve both metrics, but like you were saying...there are several different Ad combinations that will show up on Google (side bar, header, footer, below PLA's, etc) but what's important to me isn't showing up in the #3 position at all times.  Doing so isn't going to tell me whether I'm profitable or not.  

Thursday April 11, 2013

Melanie E (not verified) Said:

Hi Billy,

Finally, someone that doesn't think that position 1 is the be all end all! It's funny how normal, logical, intelligent people totally forget little things like ROI in the persuit of position one.

 

Friday April 12, 2013

Shahzad Anjum (not verified) Said:

very nice and informative post, great tips, thanks for sharing.

Friday July 19, 2013

Samee (not verified) Said:

According to my experience. I think 1st position is not always best; because every one wants to make money, and in 1st position you can also get fake clicks.

but 3rd to 5th position is best for everyone because business man clicks on avarage positions. They know; 1st is not always great.

 

Samee Ullah Feroz @ Penguin Fighter

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