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Conversion Rates Don’t Vary Much with Ad position – Google’s Chief Economist says

Posted on | August 19, 2009 | No Comments

I was partly confused and a little bit shocked by the latest statement made by Google’s Chief Economist , Hal Varian , on the how conversion rates don’t vary much by position. On the regular Adwords newsletter Inside Adwords:

“We have used a statistical model to account for these effects and found
that, on average, there is very little variation in conversion rates by
position for the same ad. For example, for pages where 11 ads are shown
the conversion rate varies by less than 5% across positions. In other
words, an ad that had a 1.0% conversion rate in the best position,
would have about a 0.95% conversion rate in the worst position, on
average. Ads above the search results have a conversion rate within ±2%
of right-hand side positions. “

Now if this made you feel that all those time checking Google Analytic’s Keyword Position Report was a waste of time, I can’t for sure empathize just yet. However it kind of vindicates my position that the better metric for adcopy testing is still CTR rather than conversion rates. This maybe trying to prove a distant relationship between an effective adcopy and ad position but remember that an effective adcopy triggers a better CTR.

A better CTR with a good Ad Quality (QS) can provide your ad a better ad position/placement. Last time I remembered, the reason why everyone is improving CTR, Bids, and Ad Quality is to get the top ad positions which posits into better CTR in hopes of converting better. Does this mean that we don’t need to chase ad positions anymore? Lets be happy with our current ad position since conversion wont vary much – stop spending more since the results will relatively be the same?

I’m not really sure what this statement means for the existing PPC strategies. Now that given a similar Ad , having 2 different auction positions or ad positions will relatively generate the same level of conversions.

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