Q: We want to get as many calls and leads as possible for our business. Our AdWords budget allows us to be aggressive; however, we still reach our daily budget for most campaigns. We are very focused on the average position metric in Google AdWords. Should we increase our bids even more to ensure we're always in the top position in order to maximize conversions?
A: First, let's define what is actually reported in the metric. Average position means average bid position and not average ad position. So you may average position 1.2 and never appear above the organic search results if no ads qualify for the top positions. Also depending on match type, you may lower your average position by increasing your bids. (Yes that's right; you can lower your positions by increasing your bids! For a full explanation, please see this post from Google's Chief Economist Hal Varian.)
Furthermore, according to extensive research by Google, conversion rates are virtually the same for all ad positions. While that may seem strange, fundamentally users convert based on your landing page, offer, price, etc. not based on your ad position on the Google search results page.
I would encourage you to execute a strategy that is focused on conversions and a bid strategy that meets your desired cost per lead. In your case, since you are reaching your daily budget on most campaigns, you could use Google Analytics to weed out non-performing keywords and then reduce bids on performing keywords in order to maximize traffic and get more conversions at a lower cost!
