What’s The Most Profitable Position In Pay-Per-Click?
By Anna Johnson on July 30th, 2008Search engine marketers have long argued about which position in the paid search listings is optimal, taking into account the cost-per-click, click-through-rate, and the sales value per click.
AdGooroo has attempted to measure the exact relationship between cost-per-click and clickthrough rate, and how these critical campaign metrics are affected by the length of the searcher’s keyword phrase, as well as the average position in which the ad appears on Google AdWords.
Based on its research, AdGooroo has developed a proprietary index, known as the “AdGooroo search index”, which shows the relationships between these factors across the spectrum of ad positions on Google.
AdGooroo believes its index can be combined with standard website metrics, such as conversion rate and average order size, to reliably predict the optimal average position for both broad and niche keywords.
Based on the report, some quick generalizations can be made:
1. For short keywords (one to two words) it’s not profitable to bid for the first or second positions, where you’re likely to compete against “brand” marketers who are willing to pay a premium for greater visibility. For direct response marketers, the most profitable positions for short keywords are the fifth and sixth positions.
2. For three-word keywords, you are still likely to lose money in the first position, but will find the most profitable positions to be the second and third positions. (Brand advertisers are unlikely to be as interested in the lower volumes of clicks available on these longer tail keywords). Eric Enge, writing for Search Engine Watch, believes it reasonable to assume that the three-word keyword data would also apply to four- and five-keyword phrases.
Sources: Eric Enge, “When Being First Isn’t Worth It”, Search Engine Watch, July 16, 2008, AdGooroo, “How keyword length and ad position impact CTR and CPC on Google AdWords”, AdGooroo, June 22, 2008
