Ad Positions and Conversion Rates

Gerard Tollefsen - June 22, 2010

Running a Pay-per-Click (PPC) campaign with Google AdWords is not a “set it and forget it” exercise.  It must be managed closely to identify what is working in the campaign and what is not.  The success of any PPC campaign is not in the initial development of the campaign, but rather the optimization techniques applied as the campaign progresses.  One of the best ways to monitor the performance of your PPC campaign is to analyze your ad’s conversion rates based on where the ads appear.

Before you start this monitoring process, it’s a good idea to tweak keyword bids and match types to allow your ads to be placed in different positions within the Sponsored Links.  Ideally, you want to have your ads fall into one of the top 3 positions since most of the high quality clicks come from these locations.  But is it better to always be in the number 1 position?  More often than not, you will have to pay a higher cost per click to lock up the top spot.  Is it possible you can have a better conversion rate when your ads show in position 2 or 3, instead of the top spot?  This is important campaign intelligence to have since those lower positions usually call for a lower click cost.  When you convert those visitors coming in at a lower cost per click you essentially lower your cost per conversion and increase campaign efficiency.

An excellent way to analyze these events is through Google Analytics (GA).  When you first log into GA, click on the Traffic Sources link in the left-hand navigation.  You will see in the sub-navigation under Traffic Sources a link for Adwords beta.  By clicking on this AdWords beta link in GA, it opens up multiple sub-navigations for you to pull reports from your Google AdWords campaign.  One of the options to choose from is Keyword Positions.  Once you are in this section of the GA interface, you can review your top keywords by a number of different metrics, including Goal Conversion Rate (see screenshot below).

As you can see from this particular example, the highest conversion rate is not from the “Top 1” position.  In fact, position 2 on the right hand side of the Sponsored links in Google has the highest conversion rate in this campaign.  This type of business intelligence can go a long way in optimizing your campaign and getting the most out of your advertising dollar.  By readjusting bid amounts and testing different match types, you can zero-in on the right bid and match type combination to land in the desired ad position that has proven to convert at the highest percentage.  You may find after careful analysis, you don’t need to pay as much as you thought for quality visitors and conversions within your PPC campaigns!