What’s Your Favorite Position?
February 6, 2010 by Pablo Palatnik
NO- I’m not talking about sex positions. When doing PPC, positions can mean a lot, after all, that’s what we’re bidding on, what position our ad will appear. This position is calculated based on bid price, click through rate of ad, quality score of landing page, etc. I’ve blogged about this for years now as I will list some useful links at the bottom of this post that may help you.
Doing some research on this Friday night regarding ad copy and ad CTR, I came across a good piece at EngineReady.com titled, “Observations on How Ad Position Impacts CTR, Conversion Rate and CPA.”
“In hopes of finding some clues to the power of ad position, we compiled pay-per-click statistics from our portfolio of data for over a one-year period. The observations were based on a sample size of over 192 million impressions and over 2 million clicks in Google. Since we wanted the big-picture look, our data is “industry-agnostic” gathered across multiple industries, including B2B, B2C, lead generation and e-commerce.
Please note that this chart is a compilation from our portfolio of data and may not be representative of your products or your industry.”
Ad Position CTR Conversion Rate CPA Conversions per 10,000 Impressions
1.0 – 1.9 3.0% 1.9% $60 5.5
2.0 – 2.9 0.9% 2.4% $38 2.1
3.0 – 3.9 1.0% 1.6% $60 1.6
4.0 – 4.9 2.3% 5.2% $60 12.0
5.0 – 5.9 1.0% 2.8% $84 2.8
6.0 – 6.9 1.5% 3.6% $57 5.2
7.0 – 7.9 1.0% 7.8% $50 7.6
8.0 – 8.9 1.1% 2.9% $78 3.3
9.0 – 9.9 0.6% 3.4% $74 2.2
10+ 0.7% 2.4% $85 1.7
(Sorry if the chart may be off on the post but you can put it together fairly quick with its respective category, the numbers that is)
So, what does this finding tell us for the most part? #1 isn’t always the best position. Ranking #2 in this study actually had the lowest cost-per-action but also had the worse conversion rate. The best conversion rate was the 7.0-7.9 position but with a $50 on average cost-per-action, yet much better than previous positions.
“* CTR – Not too surprisingly, the highest CTR of 3.0% was found at position 1, while the lowest CTR of 0.6% was at position 9. Note that CTR for position 2 dropped significantly, with a slight gain in position 3 and an even higher CTR in position 4, the second highest CTR. We believe that position 4 did so well because many times the search engines show 3 paid listings on the left side of the screen, leaving the 4th position ad to show at the top of the right hand column.
* Conversion Rate – The highest Conversion Rate of 7.8% was found at position 7, while the lowest Conversion Rate of 1.6% was at position 3. The best conversion rates were generally at position 4 and lower.
A possible reason for why the lower positions bring in generally higher conversion rates is that visitors who take the time to read 4 or more ads may be further along in the buying cycle. As they’re at that stage where they are ready to purchase, they’re looking for more of an exact match to their needs.
Many prospects who are in the research mode will probably click on multiple listings higher up on the page to gather more general information on the product or service as well as information regarding differences in brands.
* CPA – The Cost Per Acquisition metric, perhaps the most important statistic, had its best value at position 2, while the worst CPA was found at position 10+.
Note that due partially to its strong conversion rate, position 7 registered the 2nd best CPA in our compilation.
* Conversion Effectiveness Factor: Conversions per 10,000 impressions – Here’s a statistic that shows the likelihood that our ads at various positions ultimately led to a conversion. It depicts the number of conversions we recorded for every 10,000 impressions at that ad position.
Our data showed that the highest rate of conversions per 10,000 impressions of 12.0 was found at position 4. This result was significantly higher than any other positions and likely shows the power of the 4th position in our data. The lowest rate of conversions per 10,000 impressions of 1.6 was experienced at position 3.”
