Every company wants to be at the front of the pack, leaving their competitors in the dust.
To beat the competition in PPC advertising, your first instinct might be to outbid competitors and get your ad into the top few positions, often located directly above the organic results.
With your ad gloriously perched atop the search results, surely you’re at a competitive advantage compared to all those lowly ads on the right side of the page…right?
Well, not necessarily.
With PPC, you don’t always get the gold for being in first place. While having your ad in higher positions tends to yield more clicks and therefore more conversions than lower spots, it doesn’t always ensure the best return on investment.
If you have to pay twice as much per click to get your ad to the top position but find that it only gets you a few more sales and ultimately cuts into your profits, then you probably wouldn’t want to continue that strategy.
And if you’re thinking that you might be able to boost your conversion rate by getting your ads to the premium positions, Google’s Chief Economist, Hal Varian, shared on the Inside AdWords blog that conversion rates don’t vary much by position. He explained that for the same ad, conversion rate only differs by less than 5% on average across all positions.
This is not to say that you should shoot for 4th position necessarily, or any other specific position for that matter. The important thing is that you test how profitable you are in different ad positions and then bid for the ones that work the best for your unique business.
