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Web surfers may be more likely to click on search results ranked higher on a web page, but purchase decisions are not so reliant on search positioning, according to Google.

In a post on Inside AdWords today, Google revealed that the position of key words doesn't affect conversion rates very much at all. If your company is spending time or money trying to get to the top of a page's search results. Don't bother.

Google Chief Economist Hal Varian and his researchers have found that while Google ranks ads by their quality combined with the size of a bid, conversion rates are not really beholden to where an ad is placed on a page of search results:

"On average, there is very little variation in conversion rates by position for the same ad. For example, for pages where 11 ads are shown the conversion rate varies by less than 5% across positions. In other words, an ad that had a 1.0% conversion rate in the best position, would have about a 0.95% conversion rate in the worst position, on average. Ads above the search results have a conversion rate within ±2% of right-hand side positions."

Now, it's cheaper for high quality ads to go up in search results, and better ads often have better conversion rates. But looking at the same ad in different positions, it looks like it doesn't really matters where the ad is located on a page.

"Since Google ranks ads by bid times ad quality, ads in higher positions tend to have higher quality and higher quality ads tend to have higher conversion rates... Thus you may see a correlation between auction position and conversion rates just due to this ad quality effect. However, the real question is how the conversion rate for the same ad would change if it were displayed in a different position."

For Google, this fits in with their theory of why increased key word spending sometimes results in lower page positioning (and why advertisers shouldn't mind their results shifting around so much). This doesn't neccessarily make it easier for advertisers to figure out how much to bid on key words, but it should be interesting to know that while higher positioning often results in more clicks, the number of people making purchases related to those clicks remains the same regardless of where on a page your result appears.

Image: Enquiro

Meghan Keane

Published 18 August, 2009 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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Martin Bartle, Global Communications and E-commerce Director at Agent Provocateur

Hmmm, this sounds like bad maths to me. I'm not accountant but, let me work through this one - the higher your rank the more clicks you get... but it doesn't affect your conversion rate so, if I have a good conversion rate... and a high position... more clicks and conversions, and a lower position = ? - this is about site conversion not google positions

almost 7 years ago

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mdailey

Sorry but what a waste of research!! The importace of ad position has got nothing to do with conversion rates, its all about hooking people in to drive volume to your site. If in 1st position you drive 1000 people to your site and in 6th position you drive 100, then even if your conversion rate remains stable then in 1st position you still drive a greater volume of sales. Obviously there is then an ROI issue linked to the additional cost of staying in 1st position vs the revenue but the importance of this depends on your goals...value vs volume.

almost 7 years ago

Jayne Reddyhoff

Jayne Reddyhoff, Director at The Ecommerce Adviser

I also share the concerns raised about the maths (which does not make sense) and the research.

Earlier research that I have seen indicates, across all industries monitored that ads showing in the top 2 positions tend to get higher click through rates and ads showing in positions 4 – 6 tend to get higher conversion rates. As well as being born out on my clients’ accounts, this feels logical – if you are at the early stage of research, you are likely to look at just the top two or three results on Google, but if you are ready to buy, you are more likely to persevere and look at lower results as well.

Bottom line – it is ROI that counts

almost 7 years ago

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Subha Ganesh

Hi,

I feel the research makes good sense. The Clicks through rate is what is affected with the position, you can say the higher you are, the more click through you might get, but for conversion, there are other factors to consider like the landing page and the usability of your site.

I might clicks and get into a site through adwords account, but then i am not able to navigate easily or find what i am looking for quickly enough, I might just get off the site. The important thing to note in this will be the time spend on the site and which page they enter and which page they get off.... this will make more sense for conversion analysis than the position of the ad.

Subha Ganesh

London

almost 7 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Hi Meghan,

Ties up with our experience of PPC conversion - as long as you are on page 1 and can be seen, the conversion is driven by the relevance and quality of your website.

Martin - the info does make sense though it sounds like nice Google PR. The article simply states what most online marketers would consider obvious - your Google position does not determine conversion, your site does. 

It makes perfect sense though I do agree this is more about site conversion than Google - anyone can bid on terms and get an add near the top by paying a high CPC to outbid competitors. However, a consumer makes a purchase based on relevance and perceived value - send them to a poor site and the conversion will be poor. That in turn will end up sending you down the ad positions and ruin your ROAS.

Sounds to me though like Google is trying to tell people to spend more on competitive keywords and accept appearing in ads in lower positions because you will still convert the clicks. Not sure why we need Google to tell us this - any search marketer worth their salary will understand the mechanics of search and have used testing & bid rule management to optimise campaign performance and will know that PPC can still be profitable in the lower positions. 

Sounds like a nice sales pitch by Google!!

thanks

james

almost 7 years ago

Julian Grainger

Julian Grainger, Director of Media Strategy at Unique Digital

I think there is a point here that has been missed because it was not really part of the research. 

There has been a long held belief that higher ranked search results are trusted by searchers more than lower ranked results. This is because it is thought users trusted Google to get it right. A valid assumption when it comes to creating brand trust.

As trust is also important for conversion paths you could extend the theory of placement to conversion. They will have more trust going into the website if it is higher placed therefore more susceptible to convert.

Its a pure buyer behavior question that has been debunked so yes, the research was probably misguided but it is still useful in application.

almost 7 years ago

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Panic Away

At the end of the day who cares about position. Conversion rate is the only thing that counts for me. I am happy to covert anywhere on the page but I am working for the highest rate of conversion in every case.

almost 7 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Hi Panic Away,

Nice name! Conversion is not always the sole goal of PPC investment - sound illogical? Some brands invest in top positions as part of an overall PPC strategy to drive brand awareness and promote their website on generic terms that will grab the attention of new customers. 

How you bid, what positions you want to appear in etc depend on the commercial goals. As other posters have pointed out (Richard, Jayne), casual browsers or those at the start of a purchase process are more likley to click on ads at the top because they have the highest visibility. Eye tracking resaearch supports this. Conversion may be poorer but the theory is get people onto your site in the early stages of purchase cycle so that they are more likely to bookmark / come back direct when ready to make a purchase. This brand awareness should also help drive conversion of long-tail keywords. We've found this to be the case with some of our Clients; however, the strategy has to be tailored to each Client.

Is that a sensible strategy? No right answer - depends entirely on your goals. Sometimes it is a case of competitive positioning. That's why testing is so important - you can test hypotheses like these cheaply and effectively and determine the impact on ROI. We don't optimise for conversion per se unless that is the Client's primary KPI: we tend to optimise for return on ad spend and use some budget for pure investment to support the conversion of other campaigns/ad groups. Hope that makes sense!

Thanks

james

almost 7 years ago

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PaulMc

A strange article and especially this quote:"If your company is spending time or money trying to get to the top of a page's search results. Don't bother."  I don't think it's as black and white as that.

Being higher up the listing gets you more visitors, so if I have 100 visitors converting at 10%, I have 10 customers.  By being higher up the ranking I'll get more visitors still converting at 10%, so for completness, 1000 vistors = 100 customers!

Optimising for best click-through-rate position, coupled with a good converting site is key.

PaulMc

almost 7 years ago

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C

What about cpc (cost per click) per position is it pssible to avoid bidding wars by choseing a lower position?

Thus lowering cost per conversion = less conversions but higher profit per aquisition!

Just asking!

almost 7 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Hi C

It's not as black and white as that. The CPC you pay is a combination of how much you are willing to pay as max CPC and the quality/relevance of your landing page. If you can improve your landing page to increase its relevance to visitors and get better engagement and conversion, you will benefit and get a higher ad position without having to necessarily increase your CPC. 

You also need to look at day parting and find out what times of day you can secure good ad positions with lower CPC. Certain peaks will be highly competitive and drive up your average CPC.

Some companies bid high just to get exposure, others settle for lower ad positions and others optimise the entire process to get a balance. 

I would advise using a mix of bid rule management and testing to fine tune your CPC and ROAS/CPA. There is no "one right way" for PPC - again the strategy depends on your goals and targets. Test what lowering your CPC does against a campaign that maintains a higher CPC - what is the effect on conversion, ROAS and CPA?

Hope that helps

james

almost 7 years ago

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